D05 Define VOC, VOB and CTQ

Define VOC, VOB and CTQ

Deliverable 1D

Define Module Roadmap

Define1D – Define VOC, VOB, and CTQ’s2D – Define Project Boundaries3D – Quantify Project Value4D – Develop Project Mgmt. Plan

Measure5M – Document Process6M – Prioritize List of X’s7M – Create Data Collection Plan8M – Validate Measurement System9M – Establish Baseline Process Cap.

Analyze 10A – Determine Critical X’s

Improve12I – Prioritized List of Solutions13I – Pilot Best Solution

Control14C – Create Control System15C – Finalize Project Documentation

Green11G – Identify Root Cause Relationships

Deliverables – Define# Deliverable Deliverable Concept & Tasks

Primary Tool(s)

Secondary Tool(s)

1D Define VOC, VOB and CTQs

A project is started because a customer needs some problem to be solved. Deliverable 1D obtains customer input to understand the problem(s) that the customer is experiencing so that a project can be started. In addition to defining the problem, we also need to understand how the customer defines acceptability (specifications).

• VOC Worksheet

• Affinity Diagram• Stratification

tools (Pareto and other basic graphs)

2D Define Project Boundaries

Once we understand the defect that needs to be improved (project Y), define the project boundaries and components of the project. This includes a well written problem statement, identifying what process produces the defect, how much improvement we will make, when it will be done, etc. This information is summarized in the project charter. Portions of deliverables 3D and 4D will also be on the charter.

• Project charter

• SIPOC

• Included / Excluded

• Elevator Speech

3D Quantify Project Value

Determine the benefit to the customer and to JEA for improving the process. Internal customer benefits are typically hard or soft $ savings, productivity improvements, and employee satisfaction. External customer benefits are typically customer satisfaction, and price. Deliverable 3D documents these benefits.

• Project Benefits

4D Develop Project Management Plan

To effectively manage a project, the GB/BB needs to identify team members, effectively interface with the project stakeholders, plus develop and manage to a project plan (milestones and timelines). This plan should be developed and shared with all stakeholders.

• ARMI• Project

plan

• Faces of resistance

• Stakeholder analysis

• Influence strategy

1D - Define VOC, VOB and CTQ

# Deliverable Deliverable Concept & TasksPrimary Tool(s)

Secondary Tool(s)

1D Define VOC, VOB and CTQs

A project is started because a customer needs some problem to be solved. Deliverable 1D obtains customer input to understand the problem(s) that the customer is experiencing so that a project can be started. In addition to defining the problem, we also need to understand how the customer defines acceptability (specifications).

• VOC Worksheet

• Affinity Diagram

• Stratification tools (Pareto and other basic graphs)

Steps to Complete Deliverable: 1. If a defect has not been already identified for improvement, obtain VOC and VOB to determine where

process improvements are needed and to define the project defect.• If historical data is present and if the project scope is not clear or appropriately sized, use the

historical (baseline) data to stratify and/or segment the data (i.e.: Affinity Diagram, Pareto, etc) in an effort to better focus the defect, e.g.: Instead of “overtime” as a defect, stratifying the data may show that most of the overtime is in operations. In this case, “operations overtime” could be the project defect.

• Once defect has been clarified, obtain detailed VOC and VOB information to clarify the customer CTQs.

• Review the results of the above with the champion to confirm the project is supported by the business (placing this information in the project charter of deliverable 2M will usually facilitate this discussion).

Objectives – Define VOC, VOB and CTQ

Upon completing this module, students should be able to:• Discuss why the Voice of the Customer (VOC) and Voice of the Business

(VOB) is critical.• Create a VOC Worksheet to identify customer/business Critical to Quality

(CTQs). • Demonstrate the use of stratification tools:

o Pareto charts o Stratification & Segmentation of Customerso Affinity diagrams

• Identify gaps (potential Belt projects or improvement opportunities) between CTQs and current process performance.

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VOC and VOB

• The term Voice of the Customer (VOC) is used to describe customers’ needs and their perceptions of your product or service.

• The term Voice of the Business (VOB) is used to describe business’ needs and perceptions of your product or service.

VOC / VOB data helps an organization…• Decide where to focus improvement efforts• Get a baseline measure of customer satisfaction

to measure improvement against• Decide what products and services to offer• Identify critical features and specification for

those products and services• Identify key drivers of customer satisfaction

Understanding the VOC

• The “Voice Of the Customer" is the term used to describe the stated and unstated needs or requirements of the customer.

• The “Voice Of the Customer" can be captured in a variety of ways: Direct discussion or interviews, surveys, focus groups, customer specifications, observation, warranty data, field reports, complaint logs, etc.

• This process is all about being proactive and constantly innovative to capture the changing requirements of the customers with time.

Voice of the Customer

Voice of the Customer is a disciplined, cyclical approach to obtaining, understanding, and prioritizing customer wants and needs (requirements). VOC is an element of, and derives from Quality Function DeploymentWhen do you use it. Whenever there is a need to identify, understand, and prioritize customer requirements.Desired Outcome.• Greater understanding of customer requirements.• Increased/improved communication with customers.• Identification of what your customer believes to be the most

important, least satisfying attributes of your products/services.

Deliverable 1: DefineDefine VOC, VOB

• Voice of the customer

• Voice of the business

• Include any operating definition on this or a separate chart

For this and all subsequent phases, add charts as appropriate to show “the story” for that phase. Example – a descriptive statistics chart is not listed with any specific deliverable, but it would probably be appropriate to show in the Define section.

Customer CTQ Tree

• .

Need Drivers CTQ’s

Q1=

p2 =

p1 =

Q2 =

KPI =

Driver 1

Driver 2

Driver 3

GeneralHard to measure

SpecificEasy to measure

Q2 =

Voice of the Business

• Our business at JEA is about balance.• Our mission is “To improve the quality of life in the

communities we serve by being the best electric, water and wastewater utility in the nation.”

• Delighting the customer must be accomplished while operating a financially viable and stable utility.

• Often, the VOB and VOC may seem to be or may be at odds.

• Each project must focus on a MEASURABLE outcome (Y).

• We call those outcomes CTQ’s (Critical-to-Quality) or Q’s on a Process Map

Significant Few

• A project must focus on significant opportunities• We must separate the significant few from the trivial

many• How many $100 bills do you have?• How many pennies?

Pareto

• Vilfredo Federico Damaso Pareto (vēlfrĕ'dō pärĕ'tō) (b. July 15, 1848, Paris -- d. August 19, 1923, Geneva) was an Italian sociologist, economist and philosopher. He made several important contributions especially in the study of income distribution and in the analysis of individuals' choices. He introduced the concept of Pareto efficiency and helped develop the field of microeconomics.

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The Pareto Principle

• The Pareto principle was actually popularized by Joe Juran in the 1950’s about 30 years after Pareto’s death. This rule says that, in many situations, roughly 80% of the problems are caused by only 20% of the contributors.

The Pareto principle implies that we can frequently solve a problem by identifying and attacking its “vital few” sources.

OSHA Recordables at JEA

• Actual experiences summarized for a year

Back 17Hand 6Feet 12Torso 5Head 3

A Bar Chart

A Pareto Chart

What to Look For: Relative Heights of the Bars

Pareto Principle applies: one or a few categories account for most of the problem. Focus improvement effort on top one or two bars

If you see this…

Pareto Principle does not hold: bars are all about equal height. Not worth it to investigate tallest bar. Look for other ways to categorize data, or look for different kind of data on this problem.

Interpretation & Action

Day of the Week

Cause Analysis

• In response to a corporate mandate to “improve customer satisfaction,” the senior manager at the state headquarters for an insurance agency decided to look at customer complaints from the previous year. The data are shown below in a table and a chart.

• How does looking at data in a chart aid your interpretation? What would you do next?

Type of Complaint1996

Tally Service 126 Fire 42 Agent 21 School Insurance 2 Underwriting 2 TOTAL 193

Service Fire Service Service Service Agent Fire Service School Underwriting Agent Service Agent Service Service Service Fire Service

• • • • • • • • •

0102030405060708090

100110120130140150160170180190

Count

ServiceFire

AgentSchool Ins.Underwriting

Target

Types of Complaints 1996

(193 complaints total)

Case Study: Insurance Complaints

0

10

40

50

60

70

80

90

100

Pareto Chart

Height of vertical axisshould represent the sum of

all occurrences

Bar height showsrelative importance;

arranged indescending order with

tallest bar on left

Data are dividedinto categories

0

5000

10000

15000

20000

25000

Amount of Spoilage ($$)

ProduceMeat Dairy Bakery Other

Category

Grocery Store Spoilage by Department

October- December 1997

“Other” categoryis always lasteven if not the

shortest

Unitsclearlylabeled

• A Pareto chart is a graphical tool that helps you break a big problem down into its parts and identify which parts are the most important.

Exercise: Creating & Interpreting a Pareto Chart

Instructions: Open Minitab (refer to the following slide) and create a Pareto Chart in Minitab using this dataStat > Quality Tools > Pareto Chart

Department Number of Complaints

Banquet 8

Bell stand 3

Front desk 22

Health club 3

Housekeeping 14

Maintenance 12

Restaurant 7

Room service 67

Other 8

Total 144

5 Min

To Create a Pareto Chart in Minitab, Select:Stat > Quality Tools > Pareto Chart

Enter your data categories and number of defects here

Enter the label, frequency information, and chart title, then click on OK

Creating & Interpreting a Pareto Chart Exercise Answers

• Look at the Pareto chart you’ve just constructed and answer the following questions.

• Which categories account for most of the problem? Complaints about room

service and the front desk• What would you do next to

solve this problem?• Choose one of these two areas

to focus on (i.e.: room service). Make another Pareto chart to analyze the reasons that people call to complain about room service.

• Be prepared to discuss your answers with the class.

Chi-Square Goodness of Fit

Ho: Proportion of all groups are equalHa: Proportion of at least one group is

different

Chi-Sq Goodness of Fit

• The Chi-square Goodness of Fit test is a one variable test that determines whether the proportion of counted items in each category fit a hypothesized distribution.

• This is the statistical test used with a Pareto chart to determine which groups are statistically different from others.

• The Goodness of Fit test is not available in Minitab, but is available in: Chi-sq GOF Calculator.xls

Chi-Sq Goodness of Fit Example

• Enter the following injury related data into the Goodness of Fit calculator

• Is there a disproportionate number of injuries in any of the categories?o Assume that the proportion of injuries are equal for all categories

Back 17Hand 6Feet 12Torso 5Head 3

What’s Statistically Significant?

• Back injuries are statistically significant

What’s Statistically Significant?

• Everything else is statistically the same

Who Are Your Customers?

• What are the outputs of your process? Who are the customers of that output?

• Are there particular groups of customers whose needs are especially important to your organization?

• You’ll learn about the SIPOC in the upcoming D2 Module.

S U P P L I ER S

C U S T O M E R S

OutputsInputs Process

Market Stratification & Segmentation

• Often there is no single voice of the customer. Different customers or types of customers usually have different needs and priorities. The different types of customers are often referred to as market segments.

Market

• Do You Have Market Segments?o If your customers seem to have similar needs

across the board, you don’t necessarily have to divide them into segments

o If you suspect that different groups will have significantly different needs and that these differences will influence how you structure your process, product, or service, then it will be worthwhile to think in terms of segments

Market Segment Examples

Common Market Segments include:• Customer status: Former Customers, Current Customers• Type of product or service they buy from you • Quantity of product purchased: High, Medium, Low• Geographic location• Where they are in the “customer chain”

Internal user Distributor End user• Reason for buying• Industry, Division or Department• Demographics, such as gender or age

Customers as Bill Payers

• A - Pay when bill is received• B - Pay one week after bill is received• C - Pay when payment is due• D - Pay to avoid late fee• E - Pay to avoid cutoff• F - Pay to restore service• Most customers' payment behavior can be predicted . • Customers whose behavior is changing warrant

attention.

Customers as Financial Forces

• A - Top 700 or 40% of Revenue• B - Next 1,300 or 10% of Revenue• C - Balance or 50% of revenue

Customers as Political Voices

• A - Elected officials and staff• B - Political activists• C - Vote in elections• D - Non-participants in political processes• E – Future Customers

• Most customers' political behavior can be predicted.

JEA Receivables History

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Receivables Case Study: Introduction

• A company that sells both products and associated services is trying to improve its billing process and payment of accounts receivables.

• A study of how long it takes customers to pay their bills shows the average at about 48 days, but many are extending to 90 days and more.

Frequency Plot of AccountsReceivable Payments

0-1011-2021-3031-40

41-5051-6061-7071-8081-9090+

(days to pay)

10

20

30

40

50

60

count

Receivables VOC Plan: Who

Customers and Segments

Who

Position in organizationAccts. Payable vs. Purchasing Agentsvs. End usersType of businessGovt. & people who work with govt. vs.Non-govt. vs. Foreign vs. Distributors Type of paymentCredit card vs. Purchase order vs. invoice vs. pre-pay by checkPayment history on-time vs. late Organizations vs. Individuals

Deciding the “What and Why”

• What is the purpose of your project?• How does your purpose relate to customer and business

needs?

What do you need to know about the needs of the customers you’ve identified to make sure your project’s purpose stays on track?

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Sample Questions

For all customers, you should ask questions such as: 1. What is important to you about our product/service? (Ask them

to rank each of these needs in order of importance.) 2. What do you think of as a defect? 3. How are we performing on the areas you consider important? 4. What do you like about our product/service? 5. What can we improve about our product/service?

What can we do to make your job easier? 6. What specific recommendations would you make to us?

Receivables VOC Plan: “What & Why”WHAT & WHY

What are your invoice requirements?For each requirement, follow up with: Does that mean you won’tpay if ______? How well do our processes and policies currently meet yourrequirements? How do our processes and policies compare with other vendors?What do you like about our invoicing processes and policies? What don’t you like? What specific changes you would like to recommend?

Indicate specifically what you want to know about your customers.Develop customized versions of the following questions, which you canask during face-to-face interviews.

• What’s important to you?• What’s a defect?• How are we doing? How do we compare to our competitors? • What do you like? What don’t you like?

Basic VOC Systems

1. Reactive systems• Information comes to you

whether you take action or not

2. Proactive systems• You need to put effort into

gathering the information

Typical Reactive Systems

Typical Reactive Systems…• Customer complaints (phone or written)

• Problem or service hot lines• Customer service calls • Claims, credits, contested payments• Major Accounts reporting• Web page activity

Reactive systems generally gather data on:

• Current and former customer issues or problems

• Current and former customers’ unmet needs

• Current and former customers’ interest in particular products or services

Proactive VOC Systems

Proactive VOC Systems tend to focus on:1. Surveys– Interviews– Direct customer observation – Data gathering during sales visits or calls – Focus groups – Market research, market monitoring – Benchmarking – Quality scorecards– Comment cards

Face-to-Face Interaction

• Face-to-face interaction with customers can provide a wealth of data and knowledge that is unobtainable by other means.

• A good first step in proactive data collection is customer observation1. Get them to show you, in detail, how they use your product or

service. Talk with them peer to peer, onsite.• Ask “What are three things we could do to improve our product or

service to you?” or conduct a lengthier interview if time permits.• Ideally, you should have face-to-face interviews prior to

any other data collection or extensive phone interviews.

Guidelines for Interviews

Note: Prior to conducting any external interview or survey it’s required per MD140 “External Corporate Research” that JEA’s Research group review your questions.

• Be clear about the purpose of the interview and write a standard introduction for all interviewers to use

• Organize your questions• Ask simply worded questions open-ended, unbiased questions

• Avoid questions that start with “are” or “do” or “can” since they can usually be answered yes/no

• Test the guide before using it with actual customers • Let the interviewee do most of the talking and listen actively

Question Starters ExampleWhat “What _____?”How “How does that work for you?”Could “Could you give me an example of ____?”

Interview Flow

5.Ask to berated ona scale

1.Describe

background and purpose

2.Establish

the context

3.Ask

open-endedquestions

4.Summarize

and rankthe issues

6.Close

theinterview

7.Summarize

yourinterviewfindings

VOC Plan: Final Touches

• The last step to finishing your data collection is to decide specifically how you will obtain the information, within what time frame the data gathering should take place, and how you will record the data. You must train everyone who will be gathering the VOC data

• Practice the interviews before talking to customers• Periodically monitor the data collection; make adjustments as

necessary

SUMMARY: WHICH, HOW MANY, HOW & WHEN

On the back of this form or a separate sheet, summarize your plans to gather and use both reactiveand proactive sources. Indicate how much data you will get, how you will get it, and when. Include,for instance, when you will start and end the data collection, how you will record the data, and so on.

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Receivables VOC Summary PlanSUMMARY: WHICH, HOW MANY, HOW &

WHENOn a separate sheet, summarize your plans to gather and use both reactive and proactive sources. Indicate how much data you will get, how you will get it, and when. Include, for instance, the number of interviews or surveys you plan to use, which customers you will contact, when you will start and end the data collection, and so on.

Example:Will look at five different segmentation characteristics. Try to do at least 20 face-to-face interviews first, then follow up phone interviews and/or surveys for additional data. Work with statistician to identify appropriate sample size needed from base of 5,000 customer organizations. • Carlos and LaShawn will pull together current reactive data we already have.• Tina will work on the bookstore angle. • Maury will work with customer service on adding info to customer contact

calls.• Work to begin this Friday and extend for three weeks. Deadline is July 26.

CTQ Definition and Elements• CTQs are the translation of customer

needs into quantified requirements for our product/service.

• CTQs are critical requirements placed on the product/service

CTQ

Product/Service

Characteristic

Measure

Target/Nominal Value

SpecificationLimits

AllowableDefect Rate

CustomerNeed

BusinessGoal

QuickLab Tests

Six SigmaPerformance

PatientWait Time

Arrival toDeparture(Minutes)

60 minutes

90 minutes

<3.4 DPMO

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Translating VOC into CTQs

• (CTQ = Critical to Quality)

need

VOC CTQ Tree

I want

CTQ

CTQ

CTQ

CTQ

CTQ

CTQ

CTQ

CTQ

Why Create a CTQ tree?

• Translates broad customer requirements into specific critical-to-quality (CTQ) requirements

• Helps the team to move from high-level to detailed specifications

• Ensures that all aspects of the need are addressed

• Use a CTQ Tree for…o Unspecific customer requirementso Complex, broad needs

Example: CTQ Tree

GoodCustomerService

Knowledgeable reps

Answers given by reps are correct

Reps can answer questions asked by customer without further research

Researched information returned quickly

Friendly reps Customer greeted by name

Customer not interrupted

Short wait Time on hold

Customer transferred immediately to the person who can help them

Need Drivers CTQs

General Specific

Hard to measure Easy to measure

How to Create a Tree Diagram

1. List the customer needs.2. Identify the major drivers for these needs (major means those which will ensure that the need is addressed).3. Break each driver into greater detail.4. Stop the breakdown of each level when you have reached the level of detail where you can measure whether you meet the customer need or not.

Worksheet Exercise

• CTQ Answers are correct Reps can answer questions Information returned quickly Customer greeted by name Customer not interrupted Time on hold Transfers immediate

• Potential Specification Method

Worksheet Exercise: Answers

• CTQ Answers are correct Reps can answer questions Information returned

quickly Customer greeted by name Customer not interrupted Time on hold Transfers immediate

• Potential Specification Method Customer answers “yes” to “Will that

solve the problem?” Customer question answered on first

call Calls completed within 3 minutes Customer name used at least once in

conversation No interruptions of customer in calls

monitored by supervisor No more than 30 seconds on hold No more than 15 seconds to connect

to party

Instructions: Use the blank tree diagram to translate a customer need from your project into a CTQ requirement. Be prepared to discuss your work with the class. Identify gaps between CTQs and current process performance.

Project Worksheet Exercise:Generating CTQs

5 Min

CTQ Tree ExerciseNeed Drivers CTQs

General Specific

Hard to measure Easy to measure

Affinity Diagram

Affinitizing VOC

• VOC and VOB can come in several formso Complaints, about the defecto Compliments about the service/producto Solutions for how to fix the problem

• Regardless of what form the feedback comes in, it must be affinitized into common groups/topics in order to define the project correctlyo Service problem?o Product quality problem?o Cycle time problem?o etc.

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Affinity DiagramGoal: • Generate a list of key customer

needs in their language.• Encourages breakthrough

thinking• Helps to gather and identify

patterns in mountains of data• Can be used to organize ideas,

issues, and opinionsUse an Affinity Diagram when…• Analyzing qualitative customer

data• Dealing with complex problems

or issues• Organizing ideas, issues, and

opinions

Timeliness

Need 1 Need 2

Defect-free

Need 3 Need 4

Need 5

Need 6

Need 7

Need 8

Statementswritten on

individual cardsor notes Notes are clustered

based on intuition, notlogic

Title notes identifythemes

OK to haveclusters ofone note

Can be severallayers of

clustering

Affinity Diagrams

Tools

Program Change

Spare Parts

Maintenance

Not able to change the program

No training in setting parameters

Programs not available

15% of the time no spare parts are available

Everybody has his own supply

Only first operator can order

No maintenance plan

Wrong intervals

Machine

More Staff

Different screw sizes

Clamping

Missing rails

Access Operation

Central control panel

Test program not integrated

How to Create an Affinity Diagram

1. Prework: select theme2. Prework: collect verbal data; share with team3. Write the issue in clear view of all participants4. Generate and record ideas5. Transfer data onto index cards or self-stick notes6. Group the cards to find the “affinity”7. Label the groups of cards8. Optional: group the clusters9. Draw the diagram

Pizza Delivery Affinity Diagram Example

I want the pizza to have lots of toppings

Why is it the delivery person never has correct change?

Our last pizza was hot

They always get my order mixed up with the other Barnes family 2 blocks down

The last Pizza we got was great. Best ever!

They promised 45 minute delivery and it got here in 35. I’m impressed!

They promised 30 minute delivery and they were late. It was 35 minutes.

At least the delivery person was friendly.

The last time they mixed up our order, they gave it to us for free.

Delivery

Service

Quality

Pizza Delivery Affinity Diagram Example (cont’d)










Delivery

Service

Quality

Pizza Delivery Affinity Diagram Example (cont’d)










Pizza to be xxOF upon arrival

Order is correct or it is free.

All pizza’s delivered within 30 minutes of it’s order.

Learning Check – Define VOC, VOB and CTQ

Upon completing this module, students should be able to:• Discuss why the Voice of the Customer (VOC) and Voice of the Business

(VOB) is critical.• Create a VOC Worksheet to identify customer/business Critical to Quality

(CTQs) / Interview Forms. • Demonstrate the use of stratification tools:

o Pareto charts o Stratification & Segmentation of Customerso Affinity diagrams

• Identify gaps (potential Black Belt projects or improvement opportunities) between CTQs and current process performance.

D05 Define VOC, VOB and CTQ

Education

Transcript of D05 Define VOC, VOB and CTQ