r1 - customer focus
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8/8/2019 R1 - Customer Focus
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Six Sigma
Customer Focus
Customer Focus
Focusing on the customer is essential to the success of any business. We all recognize this idea.But do we really internalize this idea? Do we really believe that such a focus has the potential todrive business growth and improve the quality of our day-to-day work as well as improve thechance that our business, and hence our jobs, will flourish?
Business growth depends on how well we meet customer expectations in terms of quality, price,and delivery. In turn, our ability to satisfy these needs with certainty is controlled by processcapability and the amount of variation in our processes (and these processes could be any kind ofprocess, ranging from administrative to manufacturing). Variation has a direct impact on ourbusiness results in terms of cost, cycle time, and the amount of defects that affect customersatisfaction.
It is vital that every employee in the company understand the values and philosophy of Six
Sigma. Six Sigma encompasses several things -- it is a metric, it is a problem solvingmethodology and set of tools -- but most important it is a total business philosophy that ourcompany has embraced in order to achieve the growth aspirations of our businesses. It isimportant that we reflect on how the values and philosophy of Six Sigma is different from thebeliefs, values, and priorities we currently emphasize in our organizations. This is vital becausethose things that are truly valued in an organization, those things that get the attention, are thethings that drive everyone's behavior.
A key activity in Six Sigma is understanding (in quantifiable terms) customer needs andtranslating these needs into the measurable outcomes of our processes (what we call a "need-do" pair). In turn, we need to focus on understanding and measuring the inputs to the processand looking at the root causes of variation in our processes.
In summary, if we value customer satisfaction as a prerequisite of business survival and growth,and if we accept that to a customer uncertainty and variation from what they expect is a qualityproblem, then we must focus on the root issues that make our internal processes inconsistentand variable. The only way to ensure that this focus happens is to make sure we place a valueand emphasis on it and this takes measurements, since, as the old cliche goes, "what getsmeasured, gets done". If we don't measure, or don't know how to measure inconsistency,variation, defects, etc. then how will we achieve customer satisfaction?
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4stomer Focus
Recognize
Description of what is valuedP
Priority
Describe and
rank what you
think is really
valued at
Your company
xploring Our Values
Key Questions
What is Six Sigma and how does it relate to our business?
How does Six Sigma help us focus on customer satisfaction and competitivecapability?
How does Six Sigma improve product, technology, and organizational capability?
What type of results can be expected through the adoption of Six Sigma?
What are the global success criteria for implementing and deploying Six Sigma?
What are the initial steps for setting Six Sigma in motion?
4Customer Focus
Rec
ognize
Description of what is valuedP
Priority
Describe and
rank what you
think is really
valued at
Your company
Exploring Our Values
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Exploring Our Values
On a piece of paper, quickly write down the things that you perceive are most valued,emphasized, and get the most management attention -- the things you think our company standsfor. Next, quickly rank them in terms of what you perceive are the priorities of the organization.We will use these as input to a group discussion.
5Customer Focus
Recognize
What Six Sigma ValuesWhat We Really Value
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01_
01_0
04
Comparing Value Systems
Improving business
performance by improving
Quality and consistently
meeting CustomerExpectations
Measurement
Measuring inputs, not just
outputs
Reducing defects, by
improving process and
product, to help achieve
business objectives
Comparing Value Systems
As we go forward in this course we will discuss further the philosophy of Six Sigma, but it isimportant to highlight a few important values of Six Sigma and to compare and contrast thesewith what we as a group feel is currently emphasized in our company.
Quality and consistently meeting customer expectations. Although it may seem obvious, it isimportant to emphasize and re-emphasize that Six Sigma's main focus is to improve quality --
our ability to consistently meet customer expectations. In improving our quality, we will alsoimprove other elements of performance such as cost and delivery.
Measurement. Six Sigma values measurement and the quantification of quality and ourprocesses with data. In short, if you can't measure something with data, you really don't knowanything about it and you have little chance of improving it.
Measuring inputs. Again, it may seem obvious that we should focus on measuring the inputsof a process, but often don't emphasize these measures or even measure them at all.Instead, we often spend more energy measuring the outputs which does not help us inunderstanding the root issues of problems in quality.
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6stomer Focus
Recognize
Behavior is a function of Values
Cutting to the Core
Behavior Values
havior and Values
Reducing defects by improving processes and product design. The identification andreduction of defects is the main engine of quality improvement. The focus of our effortsshould be to improve the processes that produce products and services as well as improvingthe design of our products and services so they can be made and delivered moreconsistently.
An overall message of Six Sigma is that what we value -- what we measure, follow up, andemphasize -- is a vital determinant of how successful a company will be in improving itsperformance.
Behavior and Values
Cutting to the core: What we value drives our day-to-day behavior.
A stating point for any organization on the path to Six Sigma is to reflect on whether it is trulyfocused on quality and the customer.
6Customer Focus
Recognize
Behavior is a function of Values
Cutting to the Core
Behavior Values
Behavior and Values
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7Customer Focus
Reco
nize
stablishing Customer Focus
QualityPerformance to the standard expected by the
customer.
Definition of Quality (ISO 8402)
Totality of characteristics of an entity that bear on its
ability to satisfy stated and implied needs.Entity (or Item): That which can be individually described and
considered: process, product, and organization, a system or a
person or any combination thereof.
CustomerAnyone internal of external to the organization who
comes in contact with the product or output of my
work.
Anyone whose success or satisfaction depends on my
actions.
Source: Total Quality Leadership: A path to Excellence. Allied Signal Inc., Morristown N.J.
Establishing Customer Focus
What is customer satisfaction?
customer, n [O Fr. coustumier, L.L. custumarius, custom.]1. A person who buys, especially one who buys regularly.2. A person with whom one has to deal.
satisfaction, n [O Fr., from L. satisfaction (-onis), from satisfactus,pp. ofsatisfacere, to satisfy.]
1. To gratify fully the wants or desires of; to supply to the full extent.2. To free from doubt, suspense, or uncertainty; to give full assurance to.3. To comply with (rules or standards).
Embedded within these definitions are two key ideas. First, the notion that the customer is a
person, not an organization, corporation, etc. Second, the idea that satisfaction is the extent ofcertainty a person (customer) has that the standard will be met.
Naturally, this would imply that as certainty increases the likelihood of satisfaction would likewiseincrease. Later we will explore in greater detail the concept of certainty and probability -- but it isvital to make special note of this idea.
7Customer Focus
Reco
nize
Establishing Customer Focus
QualityPerformance to the standard expected by the
customer.
Definition of Quality (ISO 8402)
Totality of characteristics of an entity that bear on its
ability to satisfy stated and implied needs.Entity (or Item): That which can be individually described and
considered: process, product, and organization, a system or a
person or any combination thereof.
CustomerAnyone internal of external to the organization who
comes in contact with the product or output of my
work.
Anyone whose success or satisfaction depends on my
actions.
Source: Total Quality Leadership: A path to Excellence. Allied Signal Inc., Morristown N.J.1_
01_
01_
006
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8Customer Focus
Rec
o
nize
What Makes a Good Coffee Service?
Supplier Perspective
(Hotel)
Good Hot Coffee
Fast Line, Especially forRefills
Close to High-CapacityRestrooms
Close to Telephones
Room to Chat
Customer Perspective
(Conference Attendees)
. . . So why do such differences
in perspective exist ?
rry Bebb & Associates - World Class by Design Conference
vember 1993 - Buffalo, New York
ritical to Satisfaction
Good Hot Coffee
Clean China
Clean Linen
Attractive Display
Extras - Snacks
Critical to Satisfaction
It is vital that we understand and are able to quantify what is critical to the customer's satisfaction.We must do this to ensure that we are working on the right things from the customer'sperspective.
We need to ask ourselves how easy it is for our customers to do business with us. We need toask whether we are making assumptions about what customers need. Lastly, we need to ask howoften we ask our customers (internal and external) what they need and whether this is properlycommunicated throughout our organization.
8Customer Focus
Reco
nize
What Makes a Good Coffee Service?
Supplier Perspective
(Hotel)
Good Hot Coffee
Fast Line, Especially forRefills
Close to High-CapacityRestrooms
Close to Telephones
Room to Chat
Customer Perspective
(Conference Attendees)
. . . So why do such differences
in perspective exist ?
Barry Bebb& Associates - World Class by Design Conference
November 1993 - Buffalo, New York1_
01_
01_
007
Critical to Satisfaction
Good Hot Coffee
Clean China
Clean Linen
Attractive Display
Extras - Snacks
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9Customer Focus
Reco
nize
ariation Is the Enemy
Uncertainty
Unknown
Disbelief
Risk
Defect Rate
Variation
Variation Is the Enemy
As you will recall, the following assertion was made:
"As certainty increases the likelihood of satisfaction would likewise increase."
Variation is the enemy of certainty and therefore, is also the enemy of customer satisfaction.Variation drives the unknown, it adds to customer (and employee) disbelief and lack ofconfidence in the ability of processes to deliver customer satisfaction. Variation increases risk --the risk that a result will not meet expectations. Lastly, variation is a driver of defects.
9Customer Focus
Reco
nize
Variation Is the Enemy
Uncertainty
Unknown
Disbelief
Risk
Defect Rate
Variation
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01_
014
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10Customer Focus
Reco
nize
Certainty +
Known +
Belief +
Confidence +
Yield +
Uncertainty
Unknown
Disbelief
Risk
Defect Rate
= 100%
= 100%
= 100%
= 100%
= 100%
onsequences of Variation
Consequences of Variation
The greater the variation, the less certainty, belief, confidence, and yield. In short, the morevariation in our business processes (and hence in our business itself) then the less we know.
10Customer Focus
Certainty +
Known +
Belief +
Confidence +
Yield +
Uncertainty
Unknown
Disbelief
Risk
Defect Rate
= 100%
= 100%
= 100%
= 100%
= 100%
1_
01_
01_
015
Consequences of Variation
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11Customer Focus
Recognize
Measure of variationand quality Measure of capabilityof our processes
ow Do We Measure Variation and
Quality?
How Do We Measure Variation and Quality?
Unless we can measure something, we cannot improve our performance. "Sigma" is a unit of
measure that gives us a way of measuring variation and the capability of our processes to meetcustomer expectations consistently. We will discuss Sigma in more detail as the courseprogresses.
What is a Sigma? It is a Greek letter that represents a measure of variation. It could beinches, volts, pounds. How do you measure variation, such as product variation? This iswhere we can use Sigma. In the same way that we describe something as six inches long orweighing 3 pounds, when we say that something is 6 Sigma, we are saying that there is anextremely small amount of variation.
The term "Sigma" is used to designate the distribution or spread about the mean (average) ofany process or procedure in manufacturing, engineering, services, or transactions.
For a business, engineering or manufacturing process, the sigma value is a metric thatindicates how well that process is performing, the higher the Sigma value, the better. Sigma
measures the capability of the process to perform defect-free-work. A defect is anything thatresults in customer dissatisfaction.
To calculate Sigma, we will use a common measurement index: "Defects Per MillionOpportunities" (DPMO), where an opportunity can be virtually anything -- the dimensions of acomponent, a line of code, a blank line on an administrative form, etc.
The Sigma value indicates how often defects are likely to occur. The higher the Sigma value,the less likely a process will produce defects. As Sigma increases, costs go down, cycle timegoes down, and customer satisfaction goes up.
11Customer Focus
Reco
nize
Measure of variationand quality Measure of capabilityof our processes
How Do We Measure Variation and
Quality?
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01_
016
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12Customer Focus
Reco
nize
Do we have a customer focus?
Do we have a quality focus?
Do we have an input focus?
What Do We Measure Now?
What numbers get the most attention in your area?
What quality measurements do we have?
How do we use these measures?
What Do We Measure Now?
12Customer Focus
Reco
nize
Do we have a customer focus?
Do we have a quality focus?
Do we have an input focus?
1_
01_
01_
017
What Do We Measure Now?
What numbers get the most attention in your area?
What quality measurements do we have?
How do we use these measures?
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13Customer Focus
Rec
o
nize
Maximizing the Customer Supplier
Relationship
Deriving value from the Need - Do interaction
Need Do
Customers and Suppliers Exchange Value
Through Need-Do Interaction
Customer Supplier
Maximizing the Customer Supplier Relationship
The customer/supplier relationship is focused on a need-do pair relationship. Maximum value,both to the customer and to the supplier, is achieved when needs and dos have maximumoverlap.
If we do things that customers don't need, then we are not adding value; an organization existsonly to supply value to customers.
13Customer Focus
Reco
nize
Maximizing the Customer Supplier
Relationship
Deriving value from the Need - Do interaction
Need Do
Customers and Suppliers Exchange Value
Through Need-Do Interaction
Customer Supplier
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008
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14Customer Focus
Reco
nize
Delivery
Price
Quality
Need
Do
Cycle Time
Cost
Defects
Maximizing the Interaction
Supplier strives for performance on Cycle Time, Cost and Defects to meet
Customers increasing expectations on Delivery, Price and Quality.
Maximizing the Interaction
Specifically, value is generated for the customer via quality, price, and delivery. But in meetingthese customer needs, there is also a benefit for the supplier in terms of fewer defects, lowercosts, and reduced cycle time. We emphasize once again that the reduction of defects is a majordriver of cycle time reduction (that is, reducing all the time we take to fix problems) as well as amajor driver of reducing total cost (by reducing all the resources tied up in inspecting andreworking defects).
14Customer Focus
Reco
nize
Delivery
Price
Quality
Need
Do
Cycle Time
Cost
Defects
1_
01_
01_
009
Maximizing the Interaction
Supplier strives for performance on Cycle Time, Cost and Defects to meetCustomers increasing expectations on Delivery, Price and Quality.
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15Customer Focus
Reco
nize
inking Customer Needs
nd What We Do
Need Do
Critical to Satisfaction Critical to Quality
Customer Supplier
How the customer
measures qualityThe result our
processes must
consistently produce
CTQCTS
Linking Customer Needs and What We Do
The idea of the "need-do" interaction runs throughout Six Sigma. Later, we will discuss suchterms and concepts as "Critical to Satisfaction" or CTSs and "Critical to Quality" or CTQs. Themain message is that all of this leads back to the idea that we must understand the customersneeds and translate this into what we must do internally.
Of extreme importance is the idea that unless we satisfy customer needs through processes thatare consistent, we may satisfy the customer on quality, but disappoint the customer in anothervital area, namely price, since, as we shall see, achieving quality with inconsistent processes isvery costly.
15Customer Focus
Reco
nize
Linking Customer Needs
and What We Do
Need Do
Critical to Satisfaction Critical to Quality
Customer Supplier
How the customer
measures qualityThe result our
processes must
consistently produce
CTQCTS
1_
01_
01_
010
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16Customer Focus
Reco
nize
he Overall Perspective...
Customer
Requirements
ProcessCapabilities
Material
Capabilities
RobustDesigns
PredictableFactory
Consistent
Performance
Superior
Reliability
High Quality
On-Time
Delivery
Lower Costs
CustomerSatisfaction
BusinessResults
Customer Satisfaction is a Business Issue
The Overall Perspective
The overall perspective is that customer satisfaction is a business issue.
By focusing on well-defined customer requirements and by utilizing known processes andmaterial capabilities, we can create designs that are insensitive (robust) to variations.
Robust designs remove uncertainty and lead to predictable performance with all the resultantbusiness benefits.
The end result and driving force of all our efforts in Six Sigma will be to improve customersatisfaction and therefore business results.
16Customer Focus
Reco
nize
The Overall Perspective...
Customer
Requirements
Process
Capabilities
MaterialCapabilities
Robust
Designs
Predictable
FactoryConsistent
Performance
Superior
Reliability
High Quality
On-Time
Delivery
Lower Costs
Customer
Satisfaction
Business
Results
Customer Satisfaction is a Business Issue1_
01_
01_
011
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17Customer Focus
Reco
nize
If we are so good at X, why do we constantly test and inspect Y?
s X1 . . . XN
s Independent
s Input-Process
s Cause
s Problem
s Control
f (X)Y=
he Focus of Six Sigma
Y
Dependent
Output
Effect
Symptom
Monitor
The Focus of Six Sigma
If consistency of our internal processes is a key to satisfying customers, then it raises thequestion: what should we measure?
Six Sigma emphasizes the measurement of inputs. Let's emphasize this point. Sigma is not onlya way of measuring the output or result of a process (the "Y"), but also to measure theconsistency of the inputs (the "X's"). If we truly want to achieve consistency of what we "do," if wewant to satisfy customers, then we must measure and understand the X's.
The phrase Y equals a function of x comes up again and again in Six Sigma so it is important totake note of this concept.
Lessons Learned What we currently value in our organization as compared to the things a Six Sigma
organization values.
Behavior is a function of values.
The definition of "customer satisfaction" and how customer satisfaction is negatively affectedby variation and uncertainty.
The need to quantify customer needs as well as our performance in meeting these needs.
Variation is the enemy of customer satisfaction.
Sigma is a measure of process variation and quality.
17Customer Focus
Reco
nize
If we are so good at X, why do we constantly test and inspect Y?
s X1 . . . XN
s Independent
s Input-Process
s Cause
s Problem
s Control
f (X)Y=
1_
01_
01_
018
The Focus of Six Sigma
Y
Dependent
Output
Effect
Symptom
Monitor
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The importance of translating what is Critical to Satisfaction (the customer's need) to what isCritical to Quality (what we need to do).
Improving our ability to consistently meet customer needs leads to bottom-line businessresults.
In order to improve our internal processes, we need to focus on the inputs to processes, the"X's."
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