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0000

Evaluating QFD's Use in US Firms as a Process for Developing Products

Abbie Griffin

Quality Function Deployment (QFD) is a process that originated in Japan for managing product development. In this article, Abbie Griffin presents results of a field-based, scientific study of US firms' efforts to implement QFD methods. Her research goals were to understand the QFD process as it is used and implemented, to begin to estimate US product development improvements attributable to QFD and to identify factors linked to QFD's successful use. Based on a study of 35 projects, she found that QFD demonstrated only relatively minor, short-term, measurable impacts on product development performance. Yet, the process may have the potential to improve the development climate in the long term, possibly leading to future, measurable improvements in development performance. Successful projects differed in several ways from those projects that failed in their implementation efforts. Finally, the results suggest several characteristics of product development processes that improve the way products are developed in US companies, including structuring the decision-making processes across functional groups, building a solidly organized, highly motivated team and moving information efficiently from its origin to the ultimate
user.

This article outlines a relatively new process for developing products, Quality Function Deployment (QFD), and presents the results of a field research study of QFD's use in American firms. Although using QFD produces some major benefits and has the potential to provide even more, it is not the panacea that some proponents would have managers believe. Implementing QFD requires significant up-front investment in training, project facilitation and frequently, market research. Most tangible benefits (speed to market, cost to develop) become visible only through repeated use of the process in one product family. In the short term, however, QFD may provide significant intangible (unmeasurable) benefits, such as reducing cross-functional barriers and aiding changes in corporate culture. In deciding whether or not to implement QFD, managers must trade-off whether the impacts of these intangible benefits will be strong and visible enough to allow them to keep investing in using the process until measurable effects on shortening speed to market can be realized.

The Problem: Shortcomings in US New Product Development

Developing new products is a complex managerial process [4] that involves multiple functional groups, each with a different orientation [8,20]. Commercializing successful new products requires melding customer needs to technical solutions and manufacturing capabilities, and shepherding the result through the corporate
0737-6782/92/$5.00

Address correspondence to Professor Abbie Griffin, The University of Chicago, Graduate School of Business, 1101 East 58th Street, Chicago, IL 60637. 1992 Elsevier Science Publishing Co., Inc. 655 Avenue of the Americas, New York, NY 10010

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BIOGRAPHICALSKETCH
Abbie Griffin joined the University of Chicago's Graduate School of Business as an Assistant Professor of Marketing and Production Management in 1989. She earned a B.S. in Chemical Engineering from Purdue University in 1974, an M.B.A. from Harvard University in 1981 and a Ph.D. from the Massachusetts Institute of Technology in 1989. Her research interests in improving new product development and technology commercialization arose from participating in several new product commercialization failures in the years she worked as a plant engineer and business development manager.

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infrastructure. Because customer needs and technological solutions change over time, repetitively developing successful products is very difficult. Although many US industries depend on new products for significant amounts (50% or more) of their total sales [23], over one third of 13,000 consumer and industrial products commercialized between 1976 and 1981 failed to meet companyspecific financial and strategic performance criteria [2]. In a more recent study, Page [24] found that 45% of the products introduced to the marketplace did not meet their profitability goals. Additionally, US companies find that they take longer to shepherd projects into the marketplace than their foreign competitors [14,17,26]. Several studies place the blame for poor product development performance on the development p r o c e s s e s corporations now use [12,14,26]. Scott [26] concluded that US firms have a serious inability to convert new technology into the products desired by the marketplace and manufacture those products reliably and inexpensively, a problem leading to declining market shares, profitability and manufacturing incomes for most major industrial sectors. A 1987 Department of Defense (DoD) Task Force on the Industrial Base Initiative also concluded that multifunctionally oriented foreign firms take products and processes from R&D into production more effectively than many US firms [16].

I !

Process Design Commercial Production

- ~'-Haivest -

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Figure 1. Product development: phase review process. Adapted from I25] and [ 3 4 ] .

Current Processes for Developing New Products

If you walk into almost any US corporation and ask how they develop new products, the reply would most likely be " W e use a phase-review process." Phase-review processes divide devel-

opment into a series of phases, with tasks to be completed in each phase, and a management review and approval step before the next phase can be started (Figure 1) [34]. Development proceeds sequentially, with different functional groups participating in different development phases, then passing their results on to the next functional area [25]. Indeed, the DoD Task Force found that US firms generally follow this sort of "over-thewall" design process. Design engineers rarely, if ever, communicate directly with manufacturing engineers, marketing personnel or others involved in development [16]. Using a phase-review process for product development can easily lead to undesirable development results. A sequential process has no early warning system to indicate that planned features are not manufacturable. Commercialization cycles lengthen as the project iterates back through design to correct the problem. The DoD study found that sequential processes also lead to lower conformance quality and market appeal [16]. Some research [4,8,12,28,29] suggests that corporations might improve new product development performance by integrating the process across the functions involved. Other writing offers evidence that treating new product develop-

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l
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Design Attributes

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merit as a holistic process produces products successful in the marketplace and reduces time to market [14,33]. Several processes stressing cross-functional integration have been experimented with recently by US firms, including C o o p e r ' s stage-gate process [5] and QFD [9,13]. This article focuses on Q F D ' s use and results in US companies.

Figure 2. QFD's interaction matrices.

Quality Function Deployment: A Development Process From Japan

QFD is one new formal m a n a g e m e n t process [32] for product d e v e l o p m e n t that US companies are implementing. Q F D is an industry-initiated process, whose primary aim is to capture and convert the " V o i c e of the C u s t o m e r " [11] into the product and process requirements that profitably deliver the identified c u s t o m e r needs and wants. QFD manages a c r o s s individual functional aspects of new product d e v e l o p m e n t (market research, engineering design), providing mechanisms that weave the individual functional tasks into a coherent process [13,32]. It allows develop-

ment teams to bring together and manage all the elements needed to define, design and deliver a product that will meet or exceed customer needs [7]. In QFD, cross-functional teams use a series of interaction matrices to translate from customer needs to process step specifications, as shown in Figure 2 [9]. QFD matrices explicitly relate the data (assumptions) produced in one stage of the development process to the decisions that must be made at the next process stage. US users are most familiar with the " H o u s e of Quality," QFD's first matrix [13]. As shown in Figure 3, the House of Quality relates data generated from market research on customer wants and needs (the " V o i c e of the C u s t o m e r " ) to proposed performance characteristics of the product (engineering design inputs). The House of Quality can be thought of as the negotiated protocol containing the record of agreement as to exactly what the design will achieve [6]. The second QFD ma-

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Design Attributes Customer Needs

( 2 0 0 - 3 0 0 in h i e r a r c h y )
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Customer Perceptions

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Importances
Figure 3. House of quality.

"Engineering"
Measures
the more traditional US phase-review approach to product development. The cross-functionally developed matrix nature of QFD leads to several specific processrelated benefits [7]. First, the matrices bring together all the data required to generate good product definition, design, production and delivery decisions in a highly visual and compact form. Assumptions behind each decision are linked back to expressed customer wants and needs. Second, building the charts quickly high-

trix relates potential product features to the delivery of performance characteristics. The third and fourth matrices bring process characteristics and production requirements into the engineering and marketing relationships. The series nature of the charts allows team members to trace the impact of any proposed project change across all functional areas. Table 1 shows how QFD differs from

Table 1. Contrasting QFD and Phase Review Processes

Characteristics of QFD Simultaneous development across functions All functions participate from start Team empowered to make decisions Tasks shared across functions Consensus decisions about trade-offs Working meetings to develop results jointly

Phase review process elements Sequential, iterative development Function involvement by phase Management approval after each phase Tasks assigned by function Functionally led trade-off decisions Presentation meetings to present results

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lights any areas where the development team needs to acquire additional information to bolster the validity of the decision-making process. Third, the matrices store the plan so that none of the details are lost over time. Finally, the charts quickly communicate the plan and its assumptions to management, new team members and those responsible for implementing the results later in the development process. Mitsubishi's Kobe shipyards are credited with developing QFD in 1972 [18]. In 1978 Toyota adopted QFD. Fuji-Xerox initiated QFD to decrease their product development cycle time in 1983. Ford also adopted QFD in 1983 as a defensive move against Toyota. Since 1983, major US firms including Cummins Engine, Digital Equipment Corporation, General Motors, HewlettPackard, Procter & Gamble and Polaroid have adopted QFD. Much of QFD's US acclaim comes from articles describing Toyota's success with the process [9]. Toyota claims that QFD virtually eliminated all warrantee problems associated with rust. It also has allowed them to reduce development costs and time to market by as much as 40% [9,31,32].

specific process, this study compared outcomes from implementing and managing QFD across projects and firms.
Research Methods

The Research
Much has been published on QFD. Articles provide specific instructions on QFD process steps [3,17]; of what the matrices consist and how to calculate the numbers. Others pose potential benefits for implementing QFD [7,31] and present US case studies [21]. However, several issues pertinent to managing the process are not addressed in the literature, including: 1. Does QFD really work in US companies? 2. Why/how does QFD improve new product development performance? 3. What factors (product type or context) affect QFD's utility? 4. How is QFD successfully managed in corporations? Are there pitfalls? The field-based qualitative research reported here investigates these four questions. Because the research of Lorsch and Lawrence [20] suggests that environmental or contextual factors may affect product development success for any

Several contextual factors affecting successful new product development have been identified previously [8,12,28,29]. Lawrence and Lorsch [19] also identified some factors associated with successfully implementing integrated management processes. While these studies provide direction, additional factors may affect implementing and managing new product development projects employing QFD approaches across various situations. This research is an exploratory study using two qualitative research methods, participant observation and in-depth retrospective interviewing, whose combined purpose was to cast the broadest possible information-gathering net to identify success- and failure-related factors. Participant observation has been used to investigate how groups form and function [15]. QFD teams were observed to develop a dynamic view of how the process works and how QFD teams function. In an inductive process, a participantobserver researcher starts with data, generating hypotheses and a theory from the ground up [10]. Participant observation allows a researcher to mold his own frameworks and hypotheses without respondent bias. Nine projects were studied using participant observation. In-depth retrospective interviewing (focused interviewing in [23]) delves into what others think about a situation; why things did or did not happen, what was and was not successful, how the person felt, and why. It accesses frameworks, conceptual structures and hypotheses developed by others with experiences not had by the researcher [15]. It also allows a researcher to acquire information about aspects of the investigation s/he has not observed, either because they occurred before the researcher arrived, or they were not visible (i.e., judgments, thoughts). Focused interviewing allows a researcher to test interpretations of previously observed situations. Interviews with leaders and members of 35 new product development teams using QFD covered a broad range of project- and environmentrelated topics and gathered project histories 7 Sen-

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Table 2. Major Business and Codenames for Research Sites

Business category Consumer package goods Complex durable products consumer durables high-tech durables Components for complex durables

Number of firms 2 2 2 3

Firm codenames Goods A, B Durables A, B High-tech A, B Parts A, B, C

ior managers evaluated the differences between QFD and other processes for developing new products, such as the traditional phase-review processes frequently found in corporate policy manuals. Senior managers also discussed general corporate characteristics, and why and how QFD was initiated at their company. Over time the interview structure changed as hypotheses formed from the observed groups and an analytical framework coalesced. The research in the field extended across a year. Several introductory interviews were used to develop a list of issues, then groups were observed. Both observation and interviewing continued throughout the year in the field. Field data are captured in (extensive) notes of each interview and observed team meeting. Data analysis integrates the findings across projects into a coherent framework that could be used in the future for more quantitative investigation.

conference speaker listings or as referrals from other contacts. Seven sites evolved from cold calls to project leaders. One site contacted John Hauser (of M1T) after reading his article on QFD [13]. One site resulted from a consulting contact.

Project Characteristics
Three dimensions of project characteristics that one might expect a priori to impact the difficulty of successfully developing products or the speed with which a product could be commercialized are summarized in Table 3. These characteristics, specifically tracked in the projects investigated, vary independently of each other and may correlate with Q F D ' s ability to improve new product development. A n u m b e r of other project characteristics also were tracked that did not lead to any discernable differences in development outcomes. J Goods and services in the sample differ in levels of inherent project complexity. Managers of complex projects must manage inputs from multiple functional groups and worry about subsystem interfaces. One would expect higher levels of project complexity to lengthen commercialization time and increase the need for a formalized process that manages across functional interfaces. The sample runs the gamut from simple-tomanage c o m p o n e n t - t y p e products such as shampoos and c o m p u t e r m o d e m s to very complex systems like computers and trucks. Projects differed by type of manufacturing process. Manufacturing processes for physical goods

The Sample
The research investigated projects whose goals were to develop new products, and which used QFD as the development process rather than the more traditional phase-review process. As identified from trade journals, conference agendas, other literature and word-of-mouth, around two dozen US companies were using QFD to some extent as a product d e v e l o p m e n t process by 1987. Nine of these companies, representing a wide array of corporate contexts, provided information for this research (Table 2). The particular research sites were chosen because they had significant experience in implementing QFD (they had already used QFD in multiple projects) and because they agreed to cooperate. Firms with significant experience in QFD were identified from published reports of QFD use and success, QFD and Total Quality Management

t Two additional characteristics are the number of customer groups from which market research information must be obtained, and whether the products are dependent (they become part of or work only in concert with another product or service) or not. A priori, one would expect dependent goods and multiple customer groups to increase the complexity of managing the product development.

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Table 3. Project Characteristic Summary

Total number Percent of 35 20 40 40

Inherent Project Complexity

Complex system Subsystem Component 7 14 14

Project Type
Physical good Service Software 20 7 8 57 20 23

Projects coalesce with different levels of project-based characteristics. The combinations of variables add up to impact the time to and/or success of commercialization. For example, one would expect that less complex projects with only incremental changes made to a currently used design (developing a " n e w and improved" shampoo) would be much easier to manage and faster to develop than complex systems designed from scratch (Ford's original Taurus program, for example).

Change in This Project

Incremental (~25%) Major change (~50%) Next generation (-~75%) Clean sheet (~100%) 3 6 8 18 9 17 23 51

Implementation Characteristics
As Lorsch and Lawrence demonstrated [20], how companies implement different processes also may affect its use success. Table 4 shows how a number of characteristics associated with QFD implementation varied across the projects. These characteristics were investigated for correlation

are generally hidden from customers. These processes can be designed to operate successfully given semiskilled and skillled workers. Services are experiential in nature. Manufacturing processes for services involve customers in service delivery. Service manufacturing processes must be designed to operate despite perturbations from the "unskilled" customers who form a part of the process. "Manufacturing" for computer software is really the software development p r o c e s s - each software product is unique, and the "line workers" in the process are software engineers. Physical goods-producing firms generally have a formal process by which they design their manufacturing processes. In general, they understand the role manufacturing plays in new product development, and most have developed some specific protocols for process design. Service firms, on the other hand, tend to use more ad hoc methods for service delivery process design. They are less sophisticated in designing their delivery processes than they are in outlining the service benefits package. Service firms might benefit greatly from a process that helps them design both the service and its delivery. Finally, projects in the sample varied in the amount of change incorporated into the product, compared with the last generation of the product. The projects ranged from ones embodying only incremental changes to a current product (less than 25% different) to designing completely new products (100% change, or clean sheet developments).

Table 4. Implementation Characteristic Summary

Number Percent of 35

Who Pushes QFD Use

Top-down Bottom-up Neutral other 8 10 17 23 29 49

Level of Team Buy-In to QFD

High Moderate Low 10 12 13 29 34 37

Team Orientation
Process-oriented Result-oriented 20 15 57 43

Corporate Attitude to QFD

Investment Expense 21 14 60 40

Number of Functions Involved

1 out 2 out 3 out 4 out of of of of 4 4 4 4 2 8 15 10 6 23 43 28

Team Familiarity
High Moderate Low 3 14 18 9 40 51

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with outcomes (success and failure of QFD) across the projects. QFD was introduced via one of three corporate sources: management (top-down implementation), one or more persons on the project team (bottom-up) or some other neutral party, frequently the quality assurance group. Team commitment, or buy-in, to the QFD process ranged from high, with everyone on the team and their management fully backing its use, to low, where one functional group was dragging the rest of the functions into reluctantly using QFD. Less than half the projects u n d e r t o o k QFD as a means to an end (affective goals). Most teams implemented QFD for process-oriented reasons ( " I f the Japanese are using QFD, we should too."). One proxy for upper m a n a g e m e n t ' s c o m m i t m e n t to QFD was whether QFD was treated as an investment (high commitment), with time, space and money set aside for the process or as an expense (low commitment) to be minimized. The team's familiarity with each other ranged from high, where the whole group had worked together on a previous generation of the product or on some other project, to low, where the team was assembled from people who had never previously worked together.

Table 5. QFD Process Success and Failure Summary"

Tactical success strategic category Tactical success No change Mixed results QFD failures No information TOTAL Number of projects 7 7 8 4 9 35 Percent of total b 27 27 31 15 -Number with benefits 7 7 8 2 5 29

" This table presents success/failure results for the p r o c e s s of QFD. While all products generated by these projects were commercialized, this study does not m e a s u r e or report on commercial success rates for the products in the marketplace. ~' Percent of the 26 with known tactical outcomes.

necessary because many US managers have promoted Q F D use in their firms based on these immediate benefits. Unfortunately, these measurable improvements do not seem to be readily obtained through QFD. As indicated in Table 5, the distribution of projects across the four outcome categories outlined below does not statistically differ from a random assignment of projects across the categories. 2 "Tactical" outcome categories include: successful; QFD produced project improvements, measurable

Field Research Results

This article presents three sets of results from the research. First, Q F D ' s overall impact on product development performance is summarized. Then a number of differences between successful and failed QFD projects are presented. Finally, the article puts forth several generic characteristics for new product development processes that perform, in the eye of development-process users, better than current processes.

no change; projects exhibit no difference from expected performance, mixed; some performance aspects were worse, others improved and failed; the QFD process is abandoned or rejected.

QFD: Relatively Little Measurable Short-Term Improvement

Industry practitioners claim QFD decreases the cost and time required to develop new products [9,31]. These effects, if realized, are quantifiable and visible. They are the "tactical" benefits made possible by implementing QFD because measurable results show up in the short t e r m - "in this project." Identifying QFD's impact on tactical product d e v e l o p m e n t improvements is

Q F D success. A project is " s u c c e s s f u l " if it demonstrates i m p r o v e m e n t in any of the possible indicators of tactical success, without worsening any other facet. Increased product performance,
2 1 a s s u m e that a r a n d o m distribution would produce an even distribution of projects across o u t c o m e categories. A chi-square test of the Q F D o u t c o m e distribution does not detect a difference (P > 0.1) from an even distribution across o u t c o m e categories. This finding holds for the four outcome-category case as well as for the three outcome-category case (combine mixed plus failed categories into one grouping comprised of all projects with any worsened performance aspects).

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quality levels, or customer satisfaction indicate product improvement. Process improvements include decreased commercialization time or cost. QFD also may affect profits directly through changing the product in ways that increase sales volume or decrease product cost? Just over a quarter of the projects were "successful" by these definitions. No change, About a quarter of the projects exhibited no measurable difference from expected product or development process performance. Each project, however, found that other benefits associated with QFD warranted its continued use in product development, even though expected project improvements were not realized. Mixed performance. Mixed performance occurs when overall benefits outweigh penalties associated with worsened facets. For example, in one software development QFD lengthened the project's development time. However, the manager supported continued QFD use because he was convinced the process had forced the team to come to a more explicit and detailed understanding of customer needs and how they might best be translated into product features. The product met customer needs better and produced higher sales than the product the manager believes would have been developed using another development process. In mixed result cases, management chooses to continue using QFD or tries to modify it to eliminate performance problems. Nearly a third of the QFD projects produced mixed outcomes. QFD process failure. No project in this data set had failed in the marketplace or due to technical difficulties at the time of analysis. Thus, indications of QFD's failure are process abandonment before project completion or design rejection by management. When QFD was abandoned, the team reverted back to a phase-review development process. Four (15%) of the projects failed by these definitions. Because a development project may take 5 or 6 years to complete, some projects (nine of 35) cannot yet be categorized. All analyses are therefore based on the results from the project subsets for which data are available.
3 The real measure of interest is increased profits, but so many other variables intervene between process change and profit that decreased cost is the measure used to infer profit increase.

The Good News: QFD Produces Significant Intangible Benefits

QFD seems to be a better tool for producing longterm development benefits than for obtaining short-term "this project" improvements. In addition to short-term, tactical benefits, teams identified a number of benefits attributable to QFD that are not quantifiable in terms of improving specific project results. Benefits were identified from responses to two open-ended questions posed to project members and leaders: "What did QFD do for this project?" and " What benefits did using QFD produce?" Because respondents were not prompted, the benefits gathered and reported (Table 6) for these projects should be only the largest of the strategic effects for each project. Intangible benefits, like better understanding customer needs and building cross-functional bridges, accrue very slightly in initial process applications and may produce little or no measurable impact on specific outcomes. In following projects those benefits may spread across the organization until they have instituted sweeping changes in the way product development is performed. In the long run these benefits may be more instrumental in advantageously changing the culture and environment for product development than the tactical project-related benefits. I call these the strategic benefits of implementing QFD because of their potential long-term impact on product development. With the exception of two QFD failures, all completed QFD applications provided strategic benefits to the development process (Table 5).
Table 6. Strategic Benefit Summary
Number

Process Benefits
M a k e rational d e c i s i o n s I m p r o v e i n f o r m a t i o n flow Solidify d e s i g n early Meld t e a m t o g e t h e r 18 16 13 9

Non-Specific Value
W o u l d / d i d use Q F D again Produced a change " L i k e d i t ; " saw v a l u e

Long Term Corporate

Captures knowledge Forge cross-functional relationships

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Benefits/Project

3.5 7I

2.5 2 1.5 1 0.5 0

Success

No Change

Mixed

Failed

Tactical Success Categories

Process
F i g u r e 4.

Non-Specific Value

Corporate

Strategic benefits by tactical success category.

Almost two thirds of the strategic benefits cited by the groups related to product development process improvements that helped the team complete its task. Interestingly, team members for the projects with " m i x e d " and "no change from expected" outcomes cited more strategic benefits from QFD, and especially more process-related strategic benefits, than the "successful" teams cited (Figure 4). 4 These teams consistently cited merit in the process changes brought by QFD even though they couldn't claim that QFD measurably improved product development. Perhaps the successful teams did not recognize as many strategic benefits because they were already focused on QFD's measurable benefits.
What Project Characteristics Contribute to Success and Failure?
Contributors to Q F D successes. As Table 5 in-

proved upon expected outcomes. Table 7 illustrates that there are few discernable patterns between outcomes and project characteristics. QFD improved product outcomes for two physical goods (10%) and five service projects (71%), resulting in increased performance levels (at the same product cost), higher sales or higher customer satisfaction. QFD also improved the development process by decreasing the time or cost to commercialization in only the two projects developing products. Service developers were unable to judge whether QFD helped or hindered their development process? Both successful product projects were for the least-complex " c o m p o n e n t " category. QFD did not improve outcomes for any of the more complex-to-manage subsystem or complex system product-developing projects. The QFD success rate, even for the component projects, was low. Of nine component-type products in the sample for which results are available only two (22%) showed measurable improvements. These
That service developers m a y not be able to judge whether Q F D helped or hindered their process is not unexpected. Very few service c o m p a n i e s have more than an ad hoc s y s t e m for developing new services. T h u s , they have no basis against which to judge Q F D ' s process capabilities.

dicates, only seven QFD applications (27%) ira4 The incidence of strategic benefits differs across tactical outcome categories, but as with overall project o u t c o m e s the distribution does not differ +ignificantly from an evenly distributed sample (chi-square test, P > 0.1).

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Table 7. Summary of Project Characteristics

Total number
Inherent Project Complexity
C o m p l e x system Subsystem Component 7 14 14 20 40 40 1 3 3 2 2 0 2 3 3 2 2 3

Percent of 35

Number successful

Number failed

Number mixed

Number no changes

Project Type
Product Service Software 20 7 8 57 20 23 2 5 0 2 1 1 4 l 3 5 0 2

How Much Change in This Deuelopment Project

Incremental Major change N e x t generation Clean sheet 3 6 8 18 9 17 23 51 0 1 6 0 0 0 1 3 2 0 0 6 1 1 0 5

two projects are associated with two differentiating implementation characteristics (Table 8): they are the only c o m p o n e n t teams that undertook QFD with specific affective goals in mind and with high levels of team buy-in to using QFD from both the m e m b e r s and their managers. QFD did not produce tactical improvements for only two service-developing projects in the sample. The only difference between these two projects and the five successful service projects is in the level of buy-in to QFD. E v e r y b o d y was committed to using Q F D in the successful projects. While the managers of the other two service projects were committed to using QFD, the groups developing the project were not. Contributors to QFD failure. The four failed QFD projects had a n u m b e r of similar context and implementation factors (see Tables 7 and 8) including: low team or m a n a g e m e n t QFD commitment, attitude toward Q F D as an expense, not an investment, low to moderate team familiarity, low levels of functional integration in the corporation,

personnel m o v e m e n t primarily within function and high levels of planned product change.

QFD was a failure in four of the five projects in this sample with all these characteristics. The two most important contributors to failure are the top two: four of the seven projects with low QFD c o m m i t m e n t and for which Q F D was treated like an expense were implementation failures. Obtaining high levels of team c o m m i t m e n t and treating QFD as an investment in people and information seem crucially linked to preventing QFD failures. Characteristics of mixed result projects. Overall, eight QFD projects ended up with mixed results. In each case, the worsened outcome was a slower time (compared with that expected from the "traditional" process) to commercialization. The eight teams with mixed results had several factors in c o m m o n (Table 8). None of the eight were highly committed to QFD. Personnel on the teams were not highly familiar with each other nor had they worked together prior to this project. The level of cross-functional integration also was low in each of the companies with a mixed-result project and people were promoted predominantly within their own functional area. That all the " s l o w " teams had these c o m m o n factors leads to speculation that perhaps the rea-

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Table 8. Summary of Implementation Characteristics

Total number Percent of 35 Number successful Number failed Number mixed Number no changes

Who Pushes QFD Use

Top-down Bottom-up Neutral other 8 l0 17 23 29 49 0 4 3 I 1 2 2 ! 5 3 1 3

Level of Team Buy-In or Commitment

High Moderate Low l0 12 13 29 34 37 7 0 0 0 0 4 0 5 3 2 4 1

Project Orientation
Process-oriented Results-oriented 20 14 57 43 1 6 2 2 5 3 5 2

Corporate Attitude to QFD

Investment Expense 21 14 60 40 7 0 0 4 7 1 3 4

Number of Functions Involved

1 out 2 out 3 out 4 out of of of of 4 4 4 4 2 8 15 10 6 23 43 28 1 3 1 2 0 2 2 0 1 I 5 I 0 0 5 2

Team Familiarity
High Moderate Low 3 14 18 9 40 51 0 5 2 0 2 2 0 4 4 2 2 3

son QFD lengthened these projects was because the unfamiliar members of the team first had to be built into an integrated group. Because the firms' functions were not well integrated, forging the cross-functional relationships needed to make QFD work took significant amounts of time. Five of the mixed-result teams (63%) specifically cited "better, stronger t e a m s " or " i m p r o v e d crossfunctional relationships" as a strategic benefit of using QFD, which seems to provide support for the above speculation. A total of 14 projects in the sample have the characteristics that are c o m m o n across the eight mixed-result projects. Of those 14, almost three quarters (ten) resulted in longer development time with QFD. 6 This research suggests that in companies where the functions are not well integrated, using QFD is quite risky and may take
Of the ten slower projects, two failed and were abandoned and eight were continued. The other four projects fell in the "no change" category.

longer to complete than the traditional product development process, especially when team members and their managers are not highly committed to using QFD. These analyses of the impact of project characteristics on QFD application success and failure lead to several hypotheses that future work should investigate further: 1. Process-related improvements are more difficult to achieve than product-related improvements. 2. QFD may benefit service developers more than product developers. 3. I m p r o v e m e n t s are more difficult to achieve for more complex products than for simple ones. 4. I m p r o v e m e n t s are more difficult to achieve for projects that seek radical product redesign or are developing a clean sheet product. 5. Implementation characteristics may significantly affect project outcomes. This last hypothesis will be examined next.

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QFD Implementation Affects Success

Throughout the analysis of the project-related characteristics, variables associated with how QFD was i m p l e m e n t e d seemed to affect whether or not the Q F D application was successful at least as m u c h as did the project variables. However, of all the implementation variables traced, only two cleanly differentiate between QFD successes and failures (Table 8). Firms always treated successful Q F D projects like investments in people and information. They spent money and provided facilities for the groups to work as a team. Additionally, all involved management and team m e m b e r s of the successful projects were highly c o m m i t t e d to using QFD as the development process. They attended and actively participated in meetings, completed any betweenmeeting assignments and worked toward breaking down cross-functional barriers. Failed projects were always treated like expenses. M a n a g e m e n t was loath to spend money on additional market research, provide facilitators to smooth process implementation or even release personnel from their " r e a l " jobs to participate on Q F D teams. Ultimately, only one functional subset of the d e v e l o p m e n t team was committed to using Q F D in the failed projects. Champions cannot implement QFD by themselves for developing new products. An additional implementation variable that seems necessary but not sufficient for project success is the goal orientation of the project. QFD is unlikely to produce measurable development i m p r o v e m e n t s when undertaken as a " d e m onstration" project to gain expertise with the

m e t h o d or when implementing the process is the goal of using Q F D instead of the means to an end. Affective goals can take multiple forms, including "faster to m a r k e t , " "best p r o d u c t " and " c h e a p e r to p r o d u c e . " Six of the seven successful QFD projects were undertaken to affect a specific change in some aspect of the product or development process. All five successful service projects used Q F D affectively, to either drive service offerings based on c u s t o m e r needs (two) or change the service-providing operations (three). However, an affective goal did not ensure success. Two of the failed QFD projects had affectire goals. One can hypothesize that project goals contribute to QFD c o m m i t m e n t . Perhaps buy-in to QFD was high in the successful projects because the team was targeting a goal they believed QFD would allow them to reach, but that they could not foresee reaching using any other means. The findings of this research suggest that to be successful, QFD projects should not only have specific goals the team wants to achieve, they also must be committed to the idea that QFD is the most appropriate means to achieve them. When project members are the ones pushing for QFD, the effort is almost always at least partially successful. Dictating QFD's use from the top of the division or corporation seems to be associated with fewer cases of successful or partially successful implementation. Table 9 summarizes the project and implementation characteristics associated with producing more and less successful applications of QFD. From the research it appears that these factors are not always independent; for example, stretch

Table 9. Factors Leading to QFD Application Success and Failure

Factors increasing success Service projects Less complex projects Incremental change Factors leading to failure Apply to physical goods More complex projects Clean sheet designs

Project Characteristics

Implementation Characteristics
Treat as an investment High commitment to QFD Project members champion QFD use Team members familiar to each other Q F D as a means to achieving an end Goals that stretch capabilities High cross-functional integration Treat as an expense Single function champions QFD Management dictates QFD use Team members are strangers Using QFD is the goal Goals attainable with current processes Isolated functional groups

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goals may lead to QFD buy-in. It also appears that higher probabilities of success with QFD are achieved by simultaneously attaining more of these favorable factors.

Suggestions for Improving Product Development Processes in General

While analyzing the short-term QFD benefits leads to relationships between project and implementation characteristics and success and failure, analyzing the strategic benefits that teams attribute to QFD leads to identifying three characteristics of a product development process that may be superior to most currently used processes. Characteristics of an improved process include the ability to: structure decision-making processes across functional groups, build a solidly organized, highly motivated team and move information efficiently from its origin to the ultimate user.

tiffed is a method of structuring the development group's thinking across functional areas, QFD explicitly lays out decision steps across all functions simultaneously through a series of relational matrices, reducing or eliminating the previously sequential and functionally isolated nature of decision making. The assumptions supporting the decisions are clearly exposed to all participants. Anyone not agreeing with an assumption has the opportunity to contest it and understand how it was derived. While QFD uses matrices to structure group thinking, other structuring tools could achieve the same purpose. Simple structuring tools include checklists and root cause diagrams. More sophisticated methods include Pugh Concept Analysis [17], Crawford's "Protocols" [6], and stage-gate systems [5]. The important factors are to ensure that the right information is developed and that all the needed information is developed.
A process needs to meld people into a team.

These three generic characteristics were identified by the majority of teams as the major process improvements provided by QFD. Identifying these process characteristics is important because this research suggests that Japaneseoriginated QFD does not produce consistent immediate product development improvements in US applications. Given that Japanese firms are managed very differently than American firms and have vastly different organizational structures and corporate cultures [l], it is not really surprising that QFD achieves somewhat different results in American firms than it does in Japan. However, QFD did consistently improve some aspects of development for US firms. The improved process aspects US teams attribute to using QFD may be a desirable set of characteristics for any new product development process. US firms should then be able to construct product development processes that are more appropriate than QFD for the way they are managed, based on these desirable characteristics.
A process needs to struclure thinking across functional areas. One process improvement iden-

The QFD data suggest that an improved development process builds a solidly organized, highly motivated team. QFD melds the individual "thought-worlds" [8] of the functional groups (e.g., marketing, engineering and manufacturing) into one joint thought-world encompassing all project facets by developing a common language, broadening functional understanding and introducing new ways to resolve disagreements. In executing QFD, the project team develops their own language--a language all participants speak, which contains numerous project-specific connotations for otherwise ordinary words. Some teams even compile dictionaries of the special meanings they develop. As nomenclature develops, working relationships form between individuals participating in the process. Understanding grows about how other functions work, what task functions have traditionally been assigned in product development and how each function goes about completing their tasks. Although QFD's language-building creates links between team members, conflicts between team members still arise because of the natural differences in their orientations [19]. To maintain a team over time, these conflicts must be constructively resolved. QFD provides a mechanism for effectively resolving conflicts between people with different perspectives concerning a decision. in QFD, setting priorities and making complex

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trade-offs results from straightforward calculations based on a rather large set of relatively simple assumptions. If team members find the results of the calculation unexpected or disagree with them, they can go back and check the assumptions. People stop arguing among themselves about which way the overall, difficult-to-analyze, trade-off should be made and together start scrutinizing specific assumptions that go into the analysis. QFD thus changes conflicts from interpersonal in nature (and inherently destructive) to fact-based (and more logically resolvable) by explicitly laying out decision assumptions in numerical terms. A process to move information efficiently. The teams indicated that, as a process, QFD provided efficient ways to: explicitly define the information required to make good product development decisions, identify information sources, quickly obtain needed information and transmit information directly to the users without an intervening filter.

customers than obtained in the past and the active participation of all the functions of the organization in product development from project inception through commercial production. Resolving these problems will require many managements to change ingrained operating procedures (sequential functional involvement) and corporate cultures (fire, then aim; cross-functional barriers), very difficult tasks, before QFD's benefits can be obtained. However, other processes providing these same benefits also can be imagined. Instead of choosing only between implementing QFD and a traditional sort of phase-review process, product development groups can use the above precepts to evaluate the strengths and weaknesses of other product d e v e l o p m e n t processes (for instance, stage-gate) or develop new product development processes attuned to the particular needs of their own firm, environment or product type,

Closing Remarks About QFD's Apparent Utility

Project-related results across the 35 new product development projects in this sample suggest that QFD is not a short-term panacea. QFD does not consistently deliver the measurable development process i m p r o v e m e n t s cited by Japanese users. Furthermore, the way QFD is implemented may greatly impact a firm's ability to see any measurable benefit at all from the process. When all team members in all functional areas and their managers are committed to QFD as the means to achieve a specific affective goal, and when they and upper m a n a g e m e n t treat the time, energy and money spent on implementing the process as an investment in the product and team, QFD may provide at least some of the tactical benefits touted by QFD proponents. QFD is a crossfunctional investment in people and information. As with other corporate assets, expecting to recoup the investment over just one project may overestimate Q F D ' s ability to affect new product development. On the other hand, QFD may have the potential to drive long-term i m p r o v e m e n t s in the way new products are developed in the United States. Over 82% (29 out of 35) of the projects believe that using Q F D provided definite strategic product d e v e l o p m e n t benefits. The teams specifically identified three major development process ira-

QFD uses team meetings to develop and directly diffuse a large a m o u n t of the information used in decision making verbally, on line and in real time, from sources to all potential users. Questions are asked and answered until all implications of the information are understood by the group. The group identifies and agrees on what information is required but currently unavailable. Individuals publicly commit to responsibility for sourcing the information. The group also agrees on assumptions about what it believes the obtained information is and uses those assumptions in the development until the information is available. Use Q F D m o r build your own process? While QFD seems to exhibit the three general product d e v e l o p m e n t process improvements outlined above, some of Q F D ' s inherent drawbacks may make it especially difficult for some US firms to implement effectively and secure substantial benefit. These drawbacks include an enormous upfront planning effort before the "real w o r k " of product design can begin, a need for market research data that are more detailed and direct from

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provements that the QFD process provided them over their previous development process. However, judging from the number of unimproved QFD projects, guiding implementation is not easy. Implementation can be hampered by a lack of support from any one of the four functional areas involved in new product development or by granting inadequate time for going through the process, especially early in the development effort. In companies with poorly integrated functional staffs, QFD may actually lengthen development time as personnel learn to work together. Indeed, before realizing any tactical benefits from QFD in one of these companies, it may be necessary to increase the company's level of cross-functional integration. Perhaps QFD could even be a useful change agent in moving the company toward higher levels of cross-functional integration. In conclusion, QFD is probably one technique corporate managers who want to improve the way new product development is done would want to have available for development teams. However, managers promoting QFD use have a fine line to walk; they should make the technique available and support its use with time and money, but should not push it on teams without their consent and commitment. Managers also probably need to guide projects with little chance of using QFD successfully (clean sheet, complex, strictly process-oriented groups) away from QFD. QFD needs to be one technique in an arsenal of methods available to groups for developing new products.
Financial s u p p o r t for this r e s e a r c h was p r o v i d e d by the Industrial R e s e a r c h I n s t i t u t e , the M a r k e t i n g S c i e n c e Institute, an A m e r i c a n F e l l o w s h i p of the A m e r i c a n A s s o c i a t i o n of U n i v e r s i t y W o m e n a n d v a r i o u s of the c o m p a n i e s studied in this r e s e a r c h . I t h a n k all nine participating c o m p a n i e s for p r o v i d i n g me with v e r y o p e n a c c e s s to t h e i r Q F D efforts. I also t h a n k J o h n H a u s e r , H a r r y R o b e r t s , G e o r g e E a s t o n , Torn H u s t a d a n d t w o a n o n y m o u s r e v i e w e r s for their suggestions on i m p r o v i n g this m a n u s c r i p t .

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