Quality function deployment (QFD) is a matrix method for helping NPD managers and designers to make decisions, typically based on the trade-off between cost and performance, or other design parameters.
QFD provides a graphical means for relating customer requirements to attributes that the product/service provider understands. Convey-ing this information is a vital part of the strategy process; without it there are too many assumptions made by project staff in relation to the needs of the customer.
An example of a basic QFD grid, which was used in a project to develop a new international MBA programme, is shown in Figure 3.7.
It was vital that the faculty understood the needs of the market (the customer attributes), the characteristics of the course that they could control (number of staff, etc.) and the relationship between these.
They would then be in a position to make design decisions regarding the degree. Before they did this however, they needed three more pieces of information. The first was the relationships between the different course characteristics. These are shown at the very top of the grid. The second concerns customer perceptions of the current programme offered by the faculty (marked by a B on the right hand side of the figure) relative to their major competitor (marked A).
These are given on a 1–5 scale in the box on the right. The third piece of information concerns the measures that are included at the bottom of the figure. These are measures of actual characteristics of the courses from the existing programme and their competitor.
The customer attributes were derived through a two-stage process.
The first determined the main features that were pertinent to prospective customers of the programme. The second phase required them to rank them in order of importance on a 0–10 scale. These results were then used to show the average relative importance of the attributes. As shown in the figure, the reputation of the school was the most important, achieving a relative importance of 10. ‘Location’ was the next highest factor, with ‘cost of the course’ way down in seventh place.
Considering the relationship between the course characteristics and the customer attributes, the grid shows that the higher the percentage of visiting faculty, the better the reputation of the school. However, it was not clear what the relationship between the ‘number of students in the group’ and ‘reputation’ would be. One view was that the more students in the group, the more successful the course appeared.
Another view stated that small groups improved the quality of the
Key: Indicates that the customer ✗ ✗
attribute is positively influenced by that aspect of the programme
Indicates that there is a relationship between these two factors, but it needs further investigation
Indicates that the customer attribute is negatively influenced by that aspect of the programme Reputationofschool
Measures Relativeimportance Reputationoffaculty Students’experiencelevel Students’qualificationlevel Numberofstudentsingroup Priceofcourse
B A
% publicationsAveragenumberof (average)Years education) Numbers Euros(post18Years Staff
43 58
64 2.6 3 3 46 10,000 22 3.4 5 3 30 14,000
contact between the students and the staff, and that this would improve the reputation. The relationship is therefore marked as
‘requiring further investigation’.
Considering the relationships between course characteristics, there is a negative relationship between ‘student qualifications’ and ‘number of students in the group.’ Put simply, the higher you set the entry requirement for the course, the fewer students you have to choose from, hence the smaller group.
From this exercise, the course designers had a much better picture of what would make their course successful. They now had some priorities to work from and could see the impact of different factors under their control.
Figure 3.7 The QFD matrix.
Suppose you have just come up with a brilliant idea for the latest must-have gadget, which will improve the life of everyone who buys it (the bath plug that changes colour with the temperature of the bath water has already been done!). The only way to ensure that you get any financial benefit from your idea is to patent it. A patent is the sole right to exploit your idea, granted by a National Patent Office, which gives you legal redress should someone infringe your idea. You have 20 years to exploit the idea, which may involve granting a firm the right to make your product. The person who invented the original ring-pull for the drinks earned 0.01 p every time someone somewhere in the world made a can using his design. This may not seem like a lot of money, until you consider the hundreds of millions of cans that are made every year!
The requirements of a patent are that the idea must have an inventive step (sufficiently different from previous ideas in a demonstra-ble way), be commercially exploitademonstra-ble, and not be excluded (your new design for a nuclear warhead would not be allowed!). Once you are sure that you meet these criteria, the next step is to contact a patent agent, who will guide you through the process. This can be costly but, given that 95 per cent of patent applications are not granted (usually for fairly straightforward reasons), you need to ensure that you have the best chance of success and that your legal protection against infringement is as wide as possible.
Other forms of intellectual property include copyright (as protects this book), design right and trademark protection. Currently, in the UK copyright (and the © symbol) are natural laws – you do not have to apply for copyright. If you publish something and someone else uses it without accrediting it to you, you are entitled to legal redress (read money, if proven).
There are no patents for software in the UK as yet; it is covered under copyright and design right law (which protects the look of a product – most famously the Coca Cola bottle design). However, in the USA patent law has been extended to software.
The other form of protection is trademark registration (Bass’s red triangle was the first to be registered in the UK). Due to the value of branding this is a vital area for firms, and great care must be taken to ensure that you do not infringe another firm’s brand.
Given the volume of published information available at Patent Offices throughout the world, this is a major source of design information for firms. As stated above, 95 per cent of patents are never granted. This means that their details are available on the shelf for others to use, should they so wish.
For further information, see http://www.patent-office.gov.uk/
SUMMARY
NPD is an economically important value-stream to most organiza-tions, and the way that it is managed can have significant con-sequences on the ability of the organization to compete. It covers the invention of new products, which occurs relatively rarely compared to the introduction of products new to an organization and the improvement of existing ones. The process involves the transforma-tion of informatransforma-tion from a concept to a completed product, and involves much cross-functional and cross-organizational activity.
Customers are at the heart of the process, and suppliers have a vital role to play from the early stages of NPD onwards. At the outset of the process, the NPD manager needs to create a degree of chaos to encourage the development of a large number of new ideas. In the latter stages, the rapid filtering and development of the remaining ideas is vital. Ideas that do not contribute immediately to new products may provide an important source of revenue for the firm by being exploited in other ways. Good design is vital to customers and the organization alike, and modern best practices to assist in providing good design include concurrent engineering. Like other process in operations management, NPD has a significant strategic element. The outcome of the information transformation process is termed intellectual property, and this can be legally protected through patents, registered designs, copyright and trademarks in many countries.
Case study
Triumph Motorcycles
Triumph Motorcyles was a great name in bikes until the mid 1980s, when the firm finally went out of business. The reason was an inability to compete with predominantly Japanese bikes that were more sophisticated and generally better made. This was somewhat ironic, as the bikes that the Japanese firms (Honda, Yamaha, Kawasaki and Suzuki) had originally made were virtual carbon copies of the British bikes of the time. They had used the process of reverse engineering – or dismantling products to see how they worked – to minimize their own development time, and had made gradual improvements to
the products over time. In 1985, the Triumph name was bought out and a team of developers started work on developing a range of bikes that would compete with the best Japanese and European products. The budget was miniscule by global automotive standards – £50 million to develop three bikes (Ford at the same time spent £500 million developing one engine). The bikes (the Trophy, a sports-touring bike; Daytona, the sports machine; and the Trident, a retro-styled street-bike) were launched to some acclaim in 1991, and the firm has gone from strength to strength since.
How did they manage to develop three different machines on such a relatively small budget? They used a number of tech-niques, including reverse engineering (which ironically had been used on the original Triumph so effectively 20 years previously) and modular design.
Modular design in this case meant that instead of designing every part for every bike specifically, a high degree of common-ality existed between the parts (86 per cent of the parts were common across all three bikes). In doing this, the firm saved significantly on manufacturing set-up costs and minimized the inventory required of each. Whilst this standardization of parts can lead to some design compromises, in this case the designers appeared to have been able to accommodate these and still produce products that performed well.
Key questions
1 Why is NPD considered to be ‘an economically important activity’?
2 What are the limitations of box and arrow models of the NPD process?
3 What can the NPD manager do to ensure the best chances of success of a new product, and how would you determine success?
4 What are the limitations of using reverse engineering?
5 Why might modular design and the use of standardized components compromise the performance of the end product?
6 How would using modular design be applied to other industries?
For example, would it be appropriate for other vehicle design, construction, aerospace, services and computer software design?
Key terms
Concurrent engineering Cross-functional teams Filters
Intellectual property Process integration Product life cycle Product platforms
Quality function deployment Time-to-market
References
Andersen Consulting (1992). The Lean Enterprise Benchmarking Report.
Andersen Consulting.
Carroll, P. (1993). Big Blues: The Unmaking of IBM. Crown.
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Further reading
Booz, Allen and Hamilton Consultants (1982). New Product Manage-ment for the 1980s. Booz, Allen and Hamilton Consultants.
Clark, K. B. and Fujimoto, T. (1991). Product Development Performance:
Strategy, Organization and Management in the World Automotive Industry.
HBS Press.
Tidd, J., Bessant, J. and Pavitt, K. (1997). Managing Innovation:
Integrating Technological, Organizational and Market Change. John Wiley.
Ulrich, K. T. and Eppinger, S. D. (1999). Product Design and Development, 2nd edn. McGraw Hill.
Von Hippel, E., Thomke, S. and Sonnack, M. (1999). Creating breakthroughs at 3M. Harvard Bus. Rev., Sep–Oct, 47–57.
The business of the organization
The needs and wants of the organization’s
customers or clients The transformation process