----------------------------------------------------Business Index & ASAP------ AUTHOR(s): Kinni, Theodore B. TITLE(s): What's QFD? Quality function deployment quietly celebrates its first decade in the U.S. illustration chart Summary: QFD is rapidly gaining popularity in product redesign applications in companies such as Scott Paper Co. The technique helps incorporate customer requirements into the industrial engineering process, cutting engineering charges, design cycles, and warranty costs. Industry Week p31(2) Nov 1 1993 v242 n21 DESCRIPTORS: Quality control_Innovations Industrial engineering_Innovations "SURE, WE USE QUALITY FOR DIRECTORS," DECLARED A confused executive. A typical mistake, says Larry Guinta, president of Auditrol Inc., Scottsdale, Ariz., a consulting firm specializing in quality-function-deployment implementations and coauthor of The QFD Book. Ten years after QFD was first formally introduced to the members of the American Society for Quality Control, as many as two-thirds of American companies still cannot decipher the acronym. "Only 2% are using QFD properly and with a real measure of success," estimates Mr. Guinta. Developed in the late 1960s to help design supertankers in Mitsubishi's shipyards in Kobe, Japan, the name itself is vague and its meaning obscure. The technique involves a complicated-looking series of matrixes, called the House Of Quality, which translates from Japanese in the usual way--poorly. Nor does QFD lend itself to off-the-shelf application, and it may require extensive changes in the traditional corporate modus operandi. Further, it is often mistakenly defined as a "quality" tool and ignored by purchasing, sales, and engineering departments--the very areas in which it shines. Still, QFD is finding a loyal constituency in corporate America--because of its results. A producer of QFD training videos, Technicomp Inc., Cleveland, reports the process generates 30% to 50% reductions in engineering charges, 30% to 50% shorter design cycles, 20% to 60% reductions in start-up costs, and 20% to 50% reductions in warranty costs. Mr. Guinta points to 30% to 50% improvements in time to market and similar reductions in design costs. Theoretical pie in the sky? Not so, say managers who have adopted QFD. "We used QFD to redesign one of our well-known brands and were able to substantially raise the consumer's opinion of it," recalls Roger Hoerl, manager of quality methods and information at Scott Paper Co., Philadelphia. "I can't give you the exact savings, but I can tell you we used to spend millions each year in promotions and coupons for the product, and we no longer have to do that." At Du Pont Co.'s Beech Street Engineering Center Group, Wilmington, Del., where QFD is an integral part of a newly revamped design structure, David Frantz reports product-cycle-time reductions of up to 75% "We reduce life-cycle costs, produce better documentation, and use our people better." QFD seems certain to attract increased attention in the near future. Boston University's 10-year study, the Global Manufacturing Futures Project (published as Benchmarking Global Manufacturing by Business One Irwin), found that American, Japanese, and European manufacturers ranked QFD fourth among 26 programs to receive increased attention in future. The QFD process ranked second in terms of past payoff, in contrast to design for manufacture (DFM), which executives ranked only 21st in payoff. The researchers explain that DFM "is losing ground in popularity because it places the focus of design improvements on manufacturing and engineering issues and not the customer's needs. Quality function deployment achieves many of the same aims as DFM, but puts the emphasis on integrating the customer, marketing, and engineering and manufacturing." Properly used, QFD articulates and ranks customer desires, details the technical requirements needed to fill those desires, and provides an organized plan that serves to focus and guide everyone involved in the project from design to delivery. The House of Quality, so named for its shape, is the principle tool of QFD. Although ~house' designs do vary, all contain the same basic building materials: Whats: The qualities or attributes the product or service must contain, as required by the customer. Whats are compared to competitors' qualities and ranked by importance. Hows: The technical means of satisfying the whats, including the exact specifications (the how-muches) that must be met to achieve them. Correlation Matrix: An evaluation of the positive and negative relationships between the hows, sometimes called the "roof." Used to determine the best use of internal resources. Relationship Matrix: An evaluation of the relationships between the whats and the hows. Identifies the best ways to satisfy the customer and generates a numerical ranking used as a guide throughout the development process. THE ACTUAL PROCESS OF BUILDING THE HOUSE OF QUALITY can be repeated many times in a complicated project. In The QFD Book, Mr. Guinta characterizes the process as a four-phase development cycle, which includes design, details (parts characteristics), process, and production. Mr. Guinta illustrates this process using the example of a power drill: "In phase one, a powertool company finds customers want a more powerful drill (what) and that a larger motor (how) is the best way to accomplish this goal. The larger motor then becomes the what of phase two and an examination of the hows determines that the motor shaft is the key component of the motor. "The motor shaft becomes the what of phase three, the process phase, and the company finds that using a new alloy and heat treating will produce a more powerful shaft. Those processes become the whats of phase four, where manufacturing determines the new production requirements. All this happens before a single design is produced." In addition to the financial rewards, there are other benefits as well. Mr. Hoerl of Scott Paper lists three: "First, it gives us the means to make sure our decisions are based on the common goal of satisfying the customer. Second, QFD is a vehicle for developing cross-functional teamwork. It forces the different functions to work together. Finally, it provides a corporate memory. On occasion, we find ourselves doing the same R&D projects we tried 10 years ago. The original people are gone, and we have no memory. QFD gives us one page of documentation that explains each project and all the thinking that went into it." While the most obvious application for QFD is product development, it can be used in any number of ways. Ford Motor Co., for example, adopted QFD in 1984 and, according to Don Clausing, adjunct professor of engineering at the Massachusetts Institute of Technology, was using it in more than 50 applications by 1988. One of Mr. Guinta's clients used QFD to substantially increase its percentage of winning bids. "The bidding process itself costs almost $200,000 a pop, and this company was winning only 20 out of 100 bids," remembers the consultant. "They used QFD to create a rating system for the sales force that included the top five characteristics of the perfect customer. If they can't get an 85% match, they don't bid the job. By concentrating on the bids that best fit their business, they have been able to raise their win ratio to 50%." Du Pont's Mr. Frantz uses QFD to serve internal customers. "We design processing equipment for our chemical and textile product groups. In one pilot program we reduced design time from 12 months to three months, and the equipment met all the necessary requirements the first time out. We figured savings at $500,000." However, there are a number of conditions and prerequisites to effective quality function deployment that need be considered before adopting the process. Most important is the need to truly capture and prioritize the voice of the customer. Market research, surveys, focus groups, etc. are expensive and time-consuming, but essential. Properly conducted QFD projects may also require the use of techniques such as benchmarking, failure-mode-and-effects analysis, value engineering, and the seven basic quality tools. Training and implementation costs can quickly escalate. Companies unable to develop working crossfunctional teams will probably not be able to effectively utilize the process. The never-ending call for the commitment of top management also rings out in QFD implementations. Finally, the broader the objective, the more complicated the process becomes. The actual team meetings are only the tip of the QFD iceberg--most of the work occurs outside the meetings and often involves people outside the team. "If you start with an eight-member team, you can have over 1,000 people involved by the fourth phase," declares Mr. Guinta. Simply put, QFD is work. On the other hand, its growing popularity indicates that faster and less expensive development cycles, improved quality and reliability, and greater customer satisfaction are well worth the effort.