Logistics%20Decision%20Analysis%20Methods

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Logistics Decision Analysis Methods

• Quality Function Deployment Part III
• Presented by Tsan-hwan Lin
• E-mail percy_at_ccms.nkfust.edu.tw

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Construction of the HOQ

• The first section of the HOQ to be constructed
  will almost always be the Customer Needs/Benefits
  section.
• Sections are also referred to as rooms.
• The Planning Matrix (also, Preplanning Matrix) is
  often the second section to e constructed.
• The third section of the HOQ to complete is the
  Technical Response (also, Corporate Expectations)
  section.
• The fourth step is to complete the Relationship
  section of the HOQ.
• The fifth and sixth steps in completing the HOQ
  are Competitive Benchmarking and Target Setting.
• The seventh and usually final step in completing
  the HOQ is to fill in the Technical Correlations
  Matrix.
• This part is also referred to as roof.

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Q A
4
Technical Response - 1

• Just as the Voice of the Customer had a
  qualitative and quantitative component (entered
  into the Customer Needs/Benefits section and the
  Planning Matrix section), so does the translation
  of the VOC into the Voice of the Developer.
• The translation (SQCs) will be placed in
  qualitative form on the top and in quantitative
  form at the bottom.
• In QFD parlance, we use the term Quality
  Characteristics to denote the customers needs
  (the VOC).
• The translation into technical term is called
  Substitute Quality Characteristics because it
  represents a translation from the customers
  language into the organizations technical
  language.
• Most commonly, developers call this language the
  Product Requirements (????) or the Design
  Requirements(????).

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Technical Response - 2

• The nature of Product Requirements varies widely.
• Many organizations describe products and services
  in more than one language, or more than one set
  of terms (such as, Customer Requirements, Market
  Requirements, Top-Level Specifications, Detailed
  Specifications, or Technical Specifications, to
  name but a few).
• There is often much confusion about the
  boundaries between various product description
  languages, and there is little or no
  standardization of the vocabulary of each
  language.
• The ideal relationship between various product or
  service description languages is one in which the
  languages are defined and ordered according to
  how abstract, or solution-independent, each
  language is.
• If one product description allows for many
  possible implementation, it is more abstract than
  another which clearly describes or implies one
  and only one implementation.

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Technical Response - 3

• One way that QFD practitioners describe various
  levels of abstraction is with Whats/Hows
  metaphor.
• The language that appears on the left side of a
  QFD matrix represents What is desired. The
  language at the top of the matrix describes How
  the developers will respond to the What.
• To get the most out of QFD, the language of the
  Whats should be distinctly more abstract than
  the language of the Hows.
• Given a term that describes some aspect of a
  product, it is not always easy to decide what
  language it belongs to.
• Examples VOC tinted glass in an automobile gt
  Needs privacy
• (tinted glass gt What? How?)
• A practical method for dealing with the problem
  of placing product requirements in the right
  place in QFD is to use the Voice of the Customer
  Table (VOCT).

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Technical Response - 4
How
How
How
deploying
(more detailed)
What
What
What

• Some generic formulation of SQC exist, notably
  one by Stuart Pugh.
• Such formulations can be used as starter kits
  to get a set of SQCs established rapidly, and to
  aid teams in arriving at a complete set.
• The generic formulations must of course be
  modified to meet the needs of the teams specific
  project.

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Technical Response - 5

• Main categories of VOCT Part 2 (Review)
• Customer Needs (??????)
• Substitute Quality Characteristics (???????????)
• Functions (??)
• Reliability Requirements (?????)
• Target Values(???)
• Languages for Substitute Quality Characteristics
• (Top-Level) Performance Measurement(??????)
• Product Function (????)
• Product Subsystem (?????)
• Process Steps (????)

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Relationships

• The Relationships section provides a mapping
  between Substitute Quality Characteristics on the
  one hand, and Customer Wants and Needs on the
  other.
• Each Relationship cell represents a judgment,
  made by the development team, of the strength of
  the linkage between one SQC and one Customer
  Need.
• The strength of linkage is called the impact of
  the SQC on the Customer Need.
• There are four types of impacts.
• Judging impact of performance measures
• Judging impact of other SQCs
• Meaning and choice of impact values

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Determination of Priorities of SQCs

• Once the development team has determined all the
  impacts or linkages, some simple arithmetic
  provides one the key results of QFD the relative
  contributions of the SQCs to overall customer
  satisfaction (the priorities of the SQCs).
• Relationship of technical response X to customer
  satisfaction performance on need A Impact
  (value) of technical response X to need A
  Normalized raw weight for need A
• Contribution of the SQC to overall customer
  satisfaction Sum of Relationships over all
  needs
• The larger the contribution, the more influence
  the SQC has on customer satisfaction performance,
  and therefore the more important it is for the
  product or service to do well in the
  implementation of that SQC.
• If the SQCs and their contributions are to be
  transferred to the left side of another matrix,
  it is useful to convert the contributions to
  normalized contributions.

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Negative Impacts - 1

• It happens occasionally that a SQC is found to
  have a negative impact on customer satisfaction
  performance for a certain attribute.
• Such negative relationships can happen when an
  SQC has been selected for its positive impact on
  one or more attributes, but the attribute with
  which it is negatively linked has not yet been
  considered.
• Example SQC (wider range of services) vs. Needs
  (transactions processed from a single source
  ltpositivegt simple of use ltnegativegt)
• Negative impacts complicate QFD computations.
• One way to solve this is to take negative value
  in computation.
• Compute two sums algebraic (signed) sum of
  relationships and sum of the absolute values of
  the relationships
• If the difference between the two is small,
  disregard the negative impact. If the difference
  is large, the team is being challenged to define
  one or more Technical Responses that provide
  positive impacts only to replace the one that
  contains negative impacts.

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Negative Impacts - 2

• An alternative way is,
• Express all impacts on customer satisfaction
  performance as positive.
• Study the negative impacts as they are reflected
  in the Technical Relationships (the roof) section
  of the HOQ.

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Q A
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Performance Measurements

• Probably the most valuable language for SQC is
  the language of Performance Measurements.
• These are measurements that the development team
  derives directly from customer needs.
• They should be general enough to be applied to a
  product or service regardless of the specific
  implementation.
• They may provide ideal measurements (1) for
  benchmarking competitive products or services and
  (2) for providing a solution-independent starting
  point for developing new concepts.
• The standard method for developing Performance
  Measurements is to begin with the customer
  attributes (i.e., customer needs). For each
  customer attribute,
• Define measures
• Define measurements

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Define Measures - 1

• Defining measures is the process by which the
  development team establishes the relevance and
  the relationship between its measurements and
  customers perception.
• In a nutshell, the team translates (or deploys)
  each customer need into a technical performance
  measure.
• For each customer attribute, define one or a few
  technical performance measurements. Write these
  along the top of the HOQ. For each measurement,
  be sure that,
• It can be measured while the product or service
  is being developed, and before it is shipped or
  deployed (i.e. it can be used as a predictor
  rather than a lagging indicator of customer
  satisfaction performance).
• It can be controlled by the development team
  (i.e. the team should be able to make decisions
  that would effectively adjust the measurement up
  or down to meet expected customer satisfaction).

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Define Measures - 2

• To be properly defined, each performance
  measurement should be characterized in a few
  ways.
• First, the units of the measurement(????)should
  be defined.
• Examples voltage (in volts) time (in minutes)
  process complexity (number of steps) accuracy
  (defects per thousands of transactions)
• Second, the direction of goodness(??????)should
  be defined.

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Define Measures - 3
Desired Quality (Customer Need) Performance Measurement Direction of Goodness
Capacity Cubic feet of storage Larger the better
Price Dollars Smaller the better
Reliability Mean time between failure Larger the better
Speed Transactions per second Larger the better
BACK
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Direction of Goodness - 1

• The More the Better
• The implied target is infinity.
• Examples reliability (mean time between failure
  MTBF) fuel efficiency (miles traveled per
  gallon) bonding strength (pounds supported per
  square inch of adhesive area)
• Development teams need both the aggressive
  objective (infinity) and an acceptable value for
  the measure.
• If we view targets as infinity (instead of an
  acceptable value or tolerance(??)for the metric),
  we may see possibilities for increasing
  performance that we have not seen before.
• Examples secondary storage capacity (1.4Mb
  floppy gt 125Mb USB gt 40Gb USB HD)
• On the other hand, arbitrarily high numerical
  objectives are usually impossible or very
  impractical to achieve.

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Direction of Goodness - 2

• The Less the Better
• The implied target is nominally zero.
• Examples service quality (number of defects per
  thousands of transactions) process simplicity
  (number of steps) startup speed (time to launch
  a software application)
• Sometimes in a case where the target is minus
  infinity, the measurement can be shifted so that
  zero become the lowest possible value.
• Example refrigeration (absolute zero Celsius
  273o)

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Direction of Goodness - 3

• Target Is Best
• The target is as close as possible to a nominal
  value with no variation around that value.
• Examples exactness of fit (diameter of a steel
  rod) constancy of ideal temperature of a food
  freezer container is 4oF (-16oC).
• The majority of top-level performance
  measurements in service applications will be one
  of the More the Better and Less the Better
  types.

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Define Measurements

• In this step, describe how each measurement will
  be performed.
• Also, document all assumptions and comments about
  each measurement.
• The omission of this step leads to much time lost
  during planning and later on during development.
• This step operationalizes the definition of the
  measurement.
• Measures without measurement cause confusion,
  because one person will inevitably have in mind a
  different measurement process than another.
• Examples how to measure the startup time of a
  software (existing application, operating system,
  and RAM configuration assumptions may be
  different)
• The detailed description of the measurement may
  guide developers about what to optimize. It also
  makes all discussion involving the measurement
  clearer and more efficient.

BACK
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Product Functions - 1

• It can be appropriate to use (product or process)
  functions (instead of performance measures) under
  the following circumstances
• The product or service concept has already been
  established.
• Especially, breakthrough ideas, at least at the
  strategic level, are not needed or are already
  incorporated into the concept.
• In such a case there may be a list of possible
  extensions already expressed as features(??)
  that need to be prioritized.

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Product Functions - 2

• The development team lacks either the time or the
  interest to develop and prioritize performance
  measures.
• Since prioritization of performance measures does
  not define a products or services features, the
  QFD process must be used at least once more to
  translate prioritized performance measures into
  prioritized features. This extra step is
  time-consuming and may not always be worth the
  effort.
• Some development teams, especially software
  development teams, are unaccustomed to using
  performance measures in their product definition
  process.
• While translating customer needs directly into
  functions lowers the chances for breakthrough
  ideas, teams that dont normally use performance
  measures may be better doing just such a
  translation.

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Product Functions - 3

• Many products and services have large numbers of
  capabilities or functions.
• Depending on the level of detail the developers
  use to describe the functions, the OQ could be
  correspondingly small or large.
• The developers can use the Affinity Diagram
  process to decide what level of functional
  details they want to work at.
• The affinity diagram hierarchy of product or
  process function will have several levels.
• Analyzing at the higher levels will present the
  advantage of quicker analysis and disadvantage of
  less depth in the analysis.
• The HOQ at the strategic analysis level (i.e.,
  higher level) will indicate which few critical
  functional areas require more detailed planning.
  These areas can then be singled out, and the
  development team can analyze only those areas in
  a subsequent HOQ.

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Product Functions Function Tree

• As is true of all Affinity Diagrams, functions
  are organized from the bottom up.
• Another approach, the Function Tree method (by
  Don Clausing), uses the Tree Diagram method and
  organizes the functions from the top down.
• In this approach, the primary functions of the
  product or service are identified first. Each
  primary function is then broken down into
  subfunctions. Each subfunction is elaborated
  into finer detail until the development team has
  reached the level of detail it needs.
• This top-down approach creates a function tree
  that helps the development team to focus on the
  most important functions of their product or
  service.
• A Function Tree may be indistinguishable from an
  Affinity Diagram of functions, once it has been
  completed. However, the method creating it and
  the associated points of view are different.
• To get the best of both methods, the team may
  consider first brainstorming functions and
  affinitizing them, then completing the structure
  with the Tree Diagram method by working from the
  top down.

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Product Subsystems

• Most commonly the QFD process translates from
• the Voice of the Customer, to
• Performance Measures, to
• Functions, to
• Product design.
• Each successive pairs of topics (1 to 2, 2 to 3,
  3 to 4) represents the left and top,
  respectively, of a new matrix.
• While the design elements of a product are not
  normally chosen to be the Substitute Quality
  Characteristics, there are occasions where the
  choice is appropriate.
• Development team have also created Voice of the
  Customer to Product Design Matrices (1 to 4).
• Such a matrix shows the development team how
  various components of the product design
  influence various customer satisfaction
  attributes.

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Product Subsystems Tree Diagram

• The most common method for representing the
  design is by use of the Tree Diagram.
• First, identify the primary subsystems of the
  product.
• Each of these subsystems and components can then
  be described at several levels of additional
  details, thus providing the development team with
  the multiple-level Tree Diagram it needs for QFD
  analysis.
• Examples camera gt imaging, film management,
  viewfinding, and exposure time management
  subsystems gt lens, film plane, and lightproof
  compartment between lens and film (components)
  (for imaging subsystem)

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Process Steps - 1

• For teams developing new processes or services,
  the following choices for SQC are as applicable
  as for products performance measures and process
  steps.
• Performance measures for services are much the
  same as for physical product.
• Their values are generally under the control of
  the team that designs or lays out the processes
  underlying the service.
• Each process will have one or more clearly
  defined inputs and outputs. Development teams
  can define performance measures of these
  processes, based on time, cost, or quality of
  result (i.e., inputs or outputs).
• In QFD, the service development team can evaluate
  different process performance measures to
  determine which ones drive customer satisfaction
  performance most strongly.

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Process Steps - 2

• Services are delivered by processes. These
  processes may be conceived of at various levels
  of abstraction (just like a product).
• While product subsystem analysis may not apply to
  services, a closely related method of analyzing
  services and processes (i.e., process steps) does
  apply.
• Example telephone customer support
• Anyone who has analyzed the telephone customer
  support will know that beneath the simple
  (high-level view) process lies an enormously
  complex structure for handling customer requests.
• This structure includes many decision points and
  subprocesses at each of the three main steps. It
  also includes tools and technology to support
  these decision points and steps.

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Process Steps vs. Performance Measures
Performance measures Process steps
Advantages Advantages
Generally solution-free, providing stronger likelihood of creative solutions. Measurements can be used to manage the processes. Concrete, easily envisioned. Can be used in the HOQ at the level of detail appropriate to the teams needs.
Disadvantages Disadvantages
Difficult to understand or to create in organizations where measurement is not the norm. (i.e., service) Expensive to implement (cost-benefit issues aside). Incomplete definitions of process steps can lead to confusion during QFD. Focus on concrete process steps too early reduces the chances for breakthrough solutions.
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Telephone Customer Support - 1
High-level view of the Process
Route incoming calls to Customer Service Associate
Classify customer request
Respond to customer request
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Telephone Customer Support - 2
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Relationships
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Types of Impacts - 1

• For most QFD activities, the linkage is
  considered to be positive, that is, if the SQC is
  moved in the direction of goodness, customer
  satisfaction is assumed to increased.
• Customer satisfaction performance with respect to
  the need is not linked to the SQC.
• For changes of any sort (, large or small, in the
  amount or degree) of the SQC, no noticeable
  change in the customer satisfaction performance
  of that need is predicted (by the development
  team).
• Customer satisfaction performance with respect to
  the need is possibly linked to the SQC.
• For relatively large changes in the amount of the
  SQC, little or no change in customer satisfaction
  performance of that need is predicted.

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Types of Impacts - 2

• Customer satisfaction performance with respect to
  the need is moderately linked to the SQC.
• For relatively large changes in the amount of the
  SQC, noticeable but not major changes in customer
  satisfaction performance of that need are
  predicted.
• Customer satisfaction performance with respect to
  the need is strongly linked to the SQC.
• For relatively small changes in the amount of the
  SQC, significant changes in customer satisfaction
  performance of that need are predicted.

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Types of Impacts - 3
Symbol Meaning Most common numerical value Other values
(or, ?, b) Not linked 0
? Possibly linked 1
? Moderately linked 3
? Strongly linked 9 10, 7, 5
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Judging Impact of Performance Measures

• The Performance Measure is the ideal SQC for
  making impact judgment.
• The impact can be represented as the mathematical
  relationship between the two variables
• Customer Satisfaction A f (Performance Measure
  X)
• The Performance Measure can be thought of as a
  independent continuous variable, whereas customer
  satisfaction performance of any need is a
  dependent continuous variable.
• This assumes a monotonic relationship between the
  two variables.
• It often, also assumes that the relationship is
  linear.
• The disproportionate, nonlinear behavior (SQC)
  type cannot be easily modeled in QFD. The way to
  handle it is to treat such SQCs as if they were
  linear (until setting Target Values in section F).

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Monotonic and Linear Relationship

• Monotonic As the performance Measure moves in
  the direction of goodness, customer satisfaction
  performance continues to improve.
• Its a good idea to try to define Performance
  Measures that do provide a monotonic relationship
  with customer satisfaction performance.
• Linear As the Performance Measure moves in the
  direction of goodness, customer satisfaction
  performance continues to improve as the same
  rate.
• With Kano model, the relationships for Delighters
  and Dissatisfiers are not linear.

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Judging Impact of Other SQCs

• It is generally more difficult for development
  teams to judge impacts when the SQCs are not
  measurable.
• Typically development teams think of
  nonmeasurable SQCs as either present or
  absent.
• That is, try to judge whether customer
  satisfaction performance will be high if the SCQ
  is present, and low if the SQC is absent.
• In fact, it is generally unrealistic and
  counterproductive to think of product features or
  service elements in this binary fashion.
• Example SQC (File OPEN command) vs. Need (Can
  mix material from many documents) gt refined SQCs
  (stripped down OPEN command deluxe OPEN command)

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Impact Values

• Over time, QFD facilitators felt the need to
  create a stronger contrast between strong and
  the other impacts, so that strong impacts would
  have more influence on the final prioritizations.
• Some early QFD applications in the U.S. used 5,
  3, 1, 0 for the impacts from strong to none.
• The greater the ratio between the values assigned
  to strong and moderate, the less likely it is
  that an SQC with only moderates assigned to it
  will have a technical importance greater than an
  SQC with at least one high. (i.e., 9, 3, 1, 0)
• There is no specific basis for any of the
  choices.
• The impact values simply provide a way for the
  development team to express its judgment on the
  relative impacts of SQCs on customer needs.
• The SQCs can then be differentiated in terms of
  their overall contribution to customer
  satisfaction performance.

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Priorities (Contributions)
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Contribution Calculation
Technical Response X Technical Response Y Raw Weight Normalized Raw Weight
Need A 15 .43
Need B 20 .57

Contributions 5.6 0.4 35
Normalized Contributions .93 .07 6.0
?
3.9
0.4
?
?
?
1.7
0
?
?
Raw Weight Total
Contributions Total
?