Capturing the Voice of Customer: The Role of Quality Function Deployment, Lean Six Sigma, and Design for Six Sigma in Achieving Excellence through Baldridge Award

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• Capturing the Voice of Customer The Role of
  Quality Function Deployment, Lean Six Sigma, and
  Design for Six Sigma in Achieving Excellence
  through Baldridge Award

Amar Sahay, Ph.D.
www.realleansixsigmaquality.com
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Baldridge Quality Award an overview

• Award is given to organizations that have
  demonstrated outstanding quality in their
  products, services, and processes.
• Categories
• manufacturing,
• service,
• small business,
• education and health care.

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Baldridge Quality Award Criteria

• Submit an application that details the approach,
  deployment, and the results of quality activities
  under the following seven major categories
• Leadership,
• Strategic Planning,
• Customer Focus,
• Information and Analysis,
• Human Resource (workforce) Focus,
• Process Management (operations focus), and
  Business results.

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Focus of this presentation

• This presentation focuses on one of the major
  categories of the Baldridge Quality Award the
  customer focus.

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Presentation Customer Focus
Source 20112012 Baldridge Criteria for
Performance Excellence
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More than any other program, the
Baldridge Quality Award is responsible for making
quality a national priority and disseminating
best practices across the United States.
Report by Building on Baldridge American quality
for the 21st Century, by the private Council on
Competitiveness
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Meeting Customer Requirements

• We will show how the requirements in the
  customer focus category of the Baldridge Award
  criteria can be met by using the proven tools and
  technologies
• Six Sigma,
• Lean Sigma,
• Design for Six Sigma (DFSS), and
• the Quality Function Deployment (QFD)

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Addressing Customer Issues and Achieving
Excellence 

• The proven tools in meeting and exceeding
  customer expectations
• Six Sigma
• Lean Six Sigma
• Design for Six Sigma (DFSS), and
• Quality Function Deployment (QFD)

These are customer-driven quality approach that
aim at meeting or exceeding customer
expectations.
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Addressing Customer Issues

• The success of companies depend on
• designing, developing and launching new
• products/service of superior quality,
• getting to the market quickly (reduced cycle
  time),
• bringing innovation in products,
• and most important of all,
• understanding the customers needs and
• requirements.

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How Six Sigma and Related Tools have helped
Companies?

• Six Sigma, Lean, Design for Six Sigma, and QFD
  are major tools and technologies that have helped
  companies achieve
• excellence in designing and developing
• products and services,
• meeting and exceeding customer needs and
• requirements, and
• improving their revenues and profitability by
• increasing their market share.

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What is Six Sigma?(1 of 4)
Six Sigma can be described as a business
improvement approach that seeks to find and
eliminate causes of defects and errors in
manufacturing and service processes by focusing
on outputs that are critical to customers and
essential for a clear financial return for the
organization. Six Sigma was pioneered by
Motorola in the mid-1980s and popularized by the
success of General Electric.
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What is Six Sigma?(2 of 4)

• Six Sigma is a customer focused approach to
  create near perfect processes, products, and
  services all aligned to delivering what the
  customer wants.
• It is a project based approach where majority of
  projects are selected for measurable bottom line
  or customer impact majority of projects are
  completed within two to six months.
• Six sigma projects use well defined set of
  statistical tools and process improvement
  techniques by well trained people in an
  organization.

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What is Six Sigma?(3 of 4)

• Six Sigma can be viewed as
• a set of powerful tools for improving products
  and processes
• an approach for improving both the process-and
  people related aspects of business performance
• Six Sigma has turned the companys focus from
  inside to outside, changed the way we think and
  train our future leaders and moved us toward
  becoming truly customer-focused
  organization.Annual Report 2000, GE

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Six Sigma(4 of 4)

• Six Sigma is a business strategy that employs
  well-structured continuous improvement
  methodology and statistical tools to reduce
  defects and process variability.
• Six Sigma has evolved from a focus on process
  improvement using statistical tools to a
  comprehensive framework for managing a business
• Six Sigma has been employed in numerous companies
  to reduce operating cost, eliminate waste,
  increase reliability, incorporate innovation in
  products and services, reduce cycle time, and
  increase productivity.

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Six Sigma and Variation Reduction

• We quickly learned if we could control
  variation, we could get all the parts and process
  to work and get to an end result of 3.4 defects
  per million opportunities, or a Six Sigma level.
  Our people coined the term and it stuck. It was
  shorthand for people to understand that if you
  can control the variation, you can achieve
  remarkable results.
• --Interview with Robert W. Galvin, Chairman
  Emeritus of Motorola, Inc.

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Objective of Six Sigma

• The objective of a Six Sigma program is to reduce
  the variation in the process to the extent that
  the likelihood of producing a defect is virtually
  non-existent. This means improving quality, and
  meeting or exceeding customers expectations.
• The improved quality and reliability in products
  and services leads to higher perceived value, and
  increased market share thereby increasing
  revenues and profitability.

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What does sigma mean?

• The term sigma (denoted by the Greek letter,s) is
  a metric based on the statistical measure called
  standard deviation and is a measure of
  variability in a process. A metric is simply a
  measurement of some quality characteristic for
  example, percentage of defects.
• The term six sigma statistically equates to 3.4
  defects per million opportunities. Thus, a Six
  Sigma process is capable of producing 3.4 defects
  per million opportunities (DPMO).

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Improvement in Quality from 3 to 6 Sigma Levels

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Statistical Basis of Six Sigma

• In a Six Sigma process, a shift in the process
  mean of 1.5-sigma on either side of the mean
  results into 3.4 nonconforming products per
  million.

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Metrics used in Industry
Source Enterprise Strategies, Technologies
Enable Six Sigma, Aberdeen Group, Sep. 2006
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Six Sigma in Industries

• Industry research and current trend shows that
  Six Sigma and related methodologies are
  considered as the most sought after emerging
  technologies and programs by industries today.
• A current industry survey of 600 companies shows
  that approximately 41 are implementing Six
  Sigma, and vast majorities of them (approximately
  87) are implementing Lean Six Sigma and related
  technologies World Class Manufacturing Report,
  2006. The survey also shows that 72 of the
  companies acknowledge that Six Sigma and related
  technologies have increased their profitability
  Quality Digest 36.

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Six Sigma Success

• A survey of 2577 quality professionals by Quality
  Digest on Six Sigma
• In the two years we have been tracking Six
  Sigma usage and perceptions, the predominant
  finding of survey responses is the overwhelming
  agreement on this methodology as a means to
  drastically reduce waste and improve
  productivity. when properly implemented and
  supported by management, the process yields huge
  results.
• Very few of those who utilize Six Sigma have
  anything negative to say about it.
• The down side reported was the difficulty of
  implementing it within small companies.

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Quality Programs in Use
(Source The Lean Sigma Benchmark Report,
Aberdeen Group, September 2006)
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Relative Emphasis on Lean/Six Sigma
(Source The Lean Sigma Benchmark Report,
Aberdeen Group, September 2006)
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Factors Driving Quality and Six Sigma Program
(Source The Lean Sigma Benchmark
Report, Aberdeen Group, September 2006)
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Six Sigma Model
Six Sigma Methodology
Improved Business Performance
Improve Quality, Productivity, and
Perception Reduce Costs, Increase
Market Share, Increase Profitability Exceed
Customer Expectation
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Key Concepts of Six Sigma

• Think in terms of customer requirements, critical
  to quality (CTQ) characteristics, key business
  processes, costs of poor quality, and overall
  strategic objectives.
• Ensure that the identified metrics focus on
  business results and are tied to customer
  requirements, and CTQs.
• Focus on corporate sponsors, project and process
  owners, and internal and external customers.
• Identify and prioritize business impact projects
  according to expected savings and improved
  throughput.
• Help to overcome resistance to change obtain
  the required resources.

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Six Sigma Applications

• Manufacturing reduce waste, improve product
  consistency, reduce variation, improve quality,
  solve equipment problems, create capacity,
  improve productivity
• Human resource reduce cycle time for hiring
  processes, eliminate unneeded steps from the
  process, improve productivity
• Sales improve forecast reliability, pricing
  strategies, pricing variation, market share
• Anyone better understand customer needs and
  requirements tailor service offerings to meet or
  exceed customer expectations

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Second Generation of Six Sigma

• Six Sigma is part of the corporate business plan
  that is key to achieving business objectives,
  with top leadership support and involvement
• Six Sigma must address the voice of the customer
  (VOC)

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Definition of Quality
The quality of a product or service is the
customers perception of the degree to which the
product or service meets his or her expectations.
Six Sigma is a customer-driven quality approach
that aims at meeting or exceeding customer
expectations.

• Transcendent Quality is something that is
  intuitively understood but
• nearly impossible
  to communicate, such as beauty or
• love.
• Product-based Quality is found in the components
  and attributes of a
• product.
• User-based If the product or service meets or
  exceeds customers
• expectations, it has
  good quality.
• Manufacturing-based If the product conforms
  to design
• 
  specifications, it has good quality.
• Value-based If the product is perceived as
  providing good value for
• the price, it has
  good quality.

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Defining Quality
Perfection
Consistency
Fast delivery
Providing a good, usable product
Eliminating waste Variation reduction
Doing it right the first time
Delighting or pleasing customers Meeting or
exceeding customer expectations
Total customer service and satisfaction
Compliance with policies and procedures
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Dimensions of Product Quality

• Based on the definitions of quality, Garvin
  developed the following eight dimensions that
  describe product quality
• Performance
• Features
• Reliability
• Conformance to standards
• Durability
• Serviceability
• Aesthetics
• Perceived quality
• The recognition of these dimensions by management
  and the selection of the dimensions along which
  the business will compete is critical to business
  success

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Dimensions of Product Quality

• Performance Will the product do the job?
• Features/Added features Does it have features
  beyond the basic performance characteristics?
• Reliability Is it reliable? Will it last a long
  time?
• Conformance Does the product conform to the
  specifications? Is the product made exactly as
  the design specified?
• Serviceability Can it be fixed easily and cost
  effectively?
• Durability Can the product tolerate stress
  without failure?
• Aesthetics Does it have sensory characteristics
  such as taste, feel, sound, look, and smell?
• Perceived quality what is the customer opinion
  about the product or service? How customers
  perceive the quality of the product or service?

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Customer-Driven Quality

• Meeting and exceeding customer expectations
• Customers
• Consumers
• External customers
• Internal customers

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Principles of Quality

• Focus on customers
• Participation and teamwork
• Process focus supported by continuous improvement

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Customer Focus

• Customer is principal judge of quality
• Organizations must first understand customers
  needs and expectations in order to meet and
  exceed them
• Organizations must build relationships with
  customers

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Customer Focus in Six Sigma
To meet or exceed customer expectations,
organizations must fully understand all product
and service attributes that contribute to
customer value and lead to satisfaction and
loyalty called critical to quality (CTQ)
characteristics. CTQs represent the important
drivers of Six Sigma improvement efforts.
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Competitive Advantage

• Six Sigma driven by customer wants and needs
• Makes significant contribution to business
  success
• Matches organizations unique resources with
  opportunities
• Is durable and lasting
• Provides basis for further improvement
• Provides direction and motivation

Six Sigma efforts are focused on building strong
competitive advantage
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Six Sigma Quality and Profitability
Improved quality of design
Improved quality of conformance
Higher perceived value
Higher prices
Lower manufacturing and service costs
Increased market share
Increased revenues
Higher profitability
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Six Sigma and Business Results
Considerable evidence exists that Six Sigma
initiatives positively impact bottom-line results
from companies such as GE, Allied Signal, 3M,
Xerox, Raytheon, Citibank, and many others.
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Lean Six Sigma

• Lean is an approach that seeks to improve flow in
  the value stream and eliminate waste. It is about
  doing things quickly.
• Six Sigma uses a powerful framework (DMAIC) and
  simple to advanced statistical tools to uncover
  root causes of the problem to understand and
  reduce variation. It is about doing things right
  (defect free)

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Lean and Six Sigma

• Lean is an approach based on the removal of
  waste from service and manufacturing processes.
  Many companies have reported significant
  improvement through the removal of waste or
  non-value added activities.
• Six Sigma improves quality through defect
  removal and process optimization. The improved
  quality leads to higher perceived value and
  increased market share thereby, increasing
  revenue and achieving higher profitability. Many
  companies have reported significant savings by
  reducing the cost of poor quality.

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Difference Between Lean and Six Sigma (1 of 2)
Lean Six Sigma
Theory Reduce waste Reduce variation
Application guidelines Identify value Identify value stream Flow Pull Perfection Define Measure Analyze Improve Control
Focus Flow Problem
Assumptions Waste removal will improve performance Many small improvements are better than systems analysis A problem exists Figures and numbers are valued System output improves if variation in all process is reduced
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Difference Between Lean and Six Sigma (2 of 2)
Lean Six Sigma
Primary effect Reduced flow time Uniform process output
Secondary effects Less waste Fast throughput Less inventory Improved quality Less variation Uniform output Less inventory Improved efficiency Improved productivity Improved quality
Criticism Statistical analysis not valued System interaction not considered Process improved independently
Source Lean Six Sigma some basic concepts, NHS
Institute for Innovation and Improvement
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Integrating Lean and Six Sigma

• Companies have reported that bringing the two
  concepts- Lean and Six Sigma together delivers
  faster results.
• While the objective of Lean is to create flow and
  eliminate waste from the process, Six Sigma
  improves process capability and reduces variation
  thereby improving quality and reducing cost. If a
  company just applies Six Sigma, it cannot
  maximize the potential of the organization. Lean
  is really an enabler for Six Sigma.
• The Power of Six Sigma, Chowdhury, S., Prentice
  Hall, London.

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Integrating Lean and Six Sigma

• More and more companies are realizing that it is
  possible to achieve dramatic improvements in
  cost, quality, and time by using the above
  techniques.
• Several companies including Toyota, General
  Electric, Motorola, and many others have
  accomplished impressive results using one or the
  other technique. However, using only one of the
  above techniques- Lean, Six Sigma, or Design for
  Six Sigma has limitations.

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Design for Six Sigma (DFSS)
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Design for Six Sigma (DFSS) (1)

• DFSS is a systematic methodology to design new
  products or processes so that quality is built
  into every phase of product design. It is also
  used for improving existing products through
  redesign.
• The roots of DFSS are in systems engineering. It
  combines systems engineering methodology with
  statistical methods to achieve built-in quality
  objectives.
• DFSS optimizes the critical to quality (CTQ)
  characteristics to achieve the best system
  performance. (CTQs are the selected few
  measurable quality characteristics that are key
  to a specific product, process, or service that
  must be controlled to meet or exceed customer
  expectation).

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Design for Six Sigma (DFSS) (2)

• The DFSS methodology has been identified by a
  five-step process DMADV that stands for Define,
  Measure, Analyze, Design, and Verify. These are
  explained briefly.
• Define determine the project need, identify the
  project goals and objectives, determine
  customers needs and requirements, and include
  the voice of customers (VOC)
• Measure determine the characteristics critical
  to quality, prioritize customer needs and
  requirements, and assess customers needs and CTQ
  metrics
• Analyze evaluate the process options to meet
  customers need and CTQs
• Design design product and process to meet the
  customer requirements, include customer
  requirements in the development process
• Verify check the design to ensure that the
  customers requirements are met

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Design for Six Sigma (DFSS) (3)

• Unlike Six Sigma process, DFSS is relatively new
  and not standardized therefore, there are
  inconsistencies in the methodology, tools, and
  models companies employ.

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Design for Six Sigma (DFSS) (4)

• DFSS uses Robust Design (product is designed so
  that small variations in production or assembly
  do not adversely affect the product), Design of
  Experiment (DOE), Design for Manufacturability,
  Simulation and several other tools to optimize
  product design.
• DFSS balances the cost and quality.
• DFSS reduces the development cycle time in the
  long run.
• In DFSS, both engineering methods and statistics
  are used to optimize the design requirements.
• Like Six Sigma, the DFSS also uses a collection
  of tools. These tools must be understood in
  context to the engineering design for achieving
  DFSS objectives.

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DFSS Process

• The process of DFSS can be divided into four
  categories described below. These are very
  similar to the IDOV process described above.

1. Concept Development and Concept Engineering (CE)

2. Design Development
3. Design Optimization
4. Design Verification
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DFSS Process

• Concept Development and Concept Engineering (CE)
• Concept development involves developing product
  concepts and functionality based on the critical
  to quality characteristics (CTQs), voice of
  customer (VOC), technological capabilities, and
  other economic considerations.
• This stage is about bringing innovative ideas to
  the product that do not currently exist. This is
  done through listening to the voice of customers
  that helps determine the critical quality
  characteristics.

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DFSS Process

• Tools available to aid in the product design and
  development process.
• Quality Function Deployment and House of Quality
• Concurrent Engineering
• CAD/CAM
• Robust Design
• Detailed Design and Analysis (Tolerance Design,
  Design for Manufacturability, Standardization and
  Simplification)
• Failure Mode and Effects Analysis (FMEA)
• Reliability Testing

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DFSS Process

• Quality Function Deployment (QFD) is an approach
  used to meet the customers requirements in the
  product design and development phase.
• It helps to integrate the voice of customers and
  critical quality characteristics in the design of
  the products so that the products meet or exceed
  customer expectations.
• QFD helps eliminate the traditional and wasteful
  design/redesign efforts by identifying and
  incorporating customer requirements at the
  earliest stage of design. Other benefits of QFD
  include
• closer interaction between marketing, design,
  manufacturing, purchasing, and suppliers
• reduced product development time,
• faster market entry, and
• customer focus.
• An example of QFD is shown on the next slide

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QFD Concept
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Establishing Relationship between Customer
Requirements and Technical Descriptors
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Six Sigma or Design for Six Sigma?

• Unlike Six Sigma, the Design for Six Sigma (DFSS)
  is not standardized and is not deployed well in
  industry.
• The goal of DFSS is to address and incorporate
  quality issues early in the design/redesign
  process using robust design methodologies.
• Companies who have successfully employed Six
  Sigma program have found that once they achieve
  5-sigma quality levels (233 defects per million
  opportunities), they must design or redesign
  their products, processes and services by means
  of DFSS to surpass this quality level.
• The cost to correct the potential design problems
  to reduce the defect level to achieve higher
  quality level (above 4-sigma) is usually greater
  than the projected cost savings of the further
  improvement effort. It is therefore important
  that the quality must be built in the design
  phase, and the quality issues must be addressed
  early in the design process.
• To achieve Six Sigma quality level the companies
  must determine where the Six Sigma activity
  occurs in the life cycle of the product. In other
  words, the companies must determine when to apply
  the Design for Six Sigma or DFSS approach.

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Six Sigma, Lean or Design for Six Sigma?

• There is a need for an integrated approach to
  achieve the overall objectives.
• It is important for the companies to identify and
  initiate appropriate projects based on Six Sigma,
  Lean, or Design for Six Sigma depending on the
  objectives and priorities.
• Sometimes a combination of these methodologies is
  needed as an integrated approach to achieve the
  overall objectives of improving quality, reducing
  defect and becoming a Six Sigma company, reducing
  cost, eliminating waste, providing speed and
  reliability of delivery, incorporating
  flexibility and innovation in products and
  services, and meeting or exceeding customers
  expectation.

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Baldridge Customer Requirements
How do you listen to customers to obtain
actionable information? How do you listen to
potential customers, and customers of competitors
to obtain actionable information and to obtain
feedback on your products, customer support, and
transactions, as appropriate? How do your
measurements capture actionable information for
use in exceeding your customers expectations and
securing your customers engagement? How do you
determine customer dissatisfaction? How do your
measurements capture actionable information for
use in meeting your customers requirements and
exceeding their expectations in the future?
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Baldridge Customer Requirements
Listening to the voice of the customer might
include gathering and integrating various types
of customer data, such as survey data, focus
group findings, blog comments and other social
media data, warranty data, marketing and sales
information, and complaint data that affect
customers purchasing and engagement decisions -
all the above DFSS, QFD, Six Sigma) How do you
identify and innovate product offerings to meet
the requirements and exceed the expectations of
your customer groups and market segments
(identified in your Organizational Profile)? How
do you identify and innovate product offerings to
enter new markets, to attract new customers, and
to provide opportunities for expanding
relationships with existing customers, as
appropriate? (all the above DFSS, QFD, Six
Sigma) How do you consider customers of
competitors and other potential customers and
markets in this segmentation? (all the above
QFD)  
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Baldridge Customer Requirements
Customer Data Use How do you use customer,
market, and product offering information to
improve marketing, build a more customer-focused
culture, and identify opportunities for
innovation? ((all the above QFD and DFSS) How
do you market, build, and manage relationships
with customers to achieve the following?
acquire customers and build market share, retain
customers, meet their requirements, and exceed
their expectations in each stage of the customer
life cycle increase their engagement with you
(all the above Six Sigma)
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Most of the criteria laid out in Baldridge
Customer Focus category can be met by Six Sigma
and related tools.Six Sigma, Lean, Design for
Six Sigma, and QFD are powerful tools in meeting
and exceeding customer requirements and achieving
excellence.