L3 Define GB VOC, Goals Metrics Ladder

5/7/2015
(DEFINE)
VOC & Metrics
Lean Six Sigma Green Belt
(LSSGB-Ladder)
Strategic Management and Business Analysis - 2014 1 -1
1
Six Sigma Methodology

1. 0 2. 0 3. 0 4. 0 5. 0
Define Measure Analyze Improve Control
Opportunities Performance Opportunities Performance Performance
What is How are we What is What How do we

important? doing? wrong? needs to guarantee
Work Breakdown be done? performance?
Structure.
SMART Method
Project Charter
Pareto
Flow Diagram
SIPOC
Strategic Management and Business Analysis - 2014

2 1 -2
1
5/7/2015
Six Sigma Orange Belt (SSGB)
Measure
(VOC & Metrics )

31 -3
Who Are Our Customers?
• A customer is any person or organization that receives

a product or service (out put) from our work activities
(process).
• Internal customers are colleagues or departments who

receive products, services, support or information from
your process.
• External customers are individuals or organizations

outside of your business who are usually associated
with paying money for your products and services.
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What Do Customers Want?

The challenge is to understand how your customers define and
prioritize the various needs and expectations they have of your
products and services.
Product or Service features, attributes, dimensions, characteristics
Quality relating to the function of the product or service, reliability. Availability,
test, effectiveness – also freedom from defects, rework, or scrap.
Cost Prices to customer (initial plus life cycle), repair costs, purchase price,
financing terms, depreciation, residual value.
Delivery Lead times, delivery times, turnaround times, setup times, cycle times,
delays.
Service & Safety Service requirements, after-purchase reliability, parts availability,

Service, warranties, maintainability, customer-required maintenance,
product liability, product service safety
Corporate
Ethical business conduct, environmental impact, regulatory and legal
responsibility
compliance.

51 -5
Determine what to measure: listen to customers

Effective process improvement means that the measure we use in
our business is directly tied to our customers.
• Step 1: Develop a customer–Focused • Step 3: Translating voice of the customer

business strategy (VOC) into critical customer
requirements (CCRs).
• Assess the business needs.
• Organize and verify customer
• Identify customer segments. needs data into CCRs.
• Determine CCR priorities.
• Identify CCR measurement and target.
• Step 2: Listening to the VOC • Step 4: Developing measures and indicators

• To obtain useful and valid • Translate the CCRs into output
customer information and feedback: indicators:
• Select research methods to • Identify and select output
gather customer information. indicators.
• Probe for complete • Establish output performance

understanding. targets.
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Step 1:
Develop a customer-focused business strategy
Step 1: Develop a customer-focused business strategy

Not all customers create equal value. In order to discover growth
opportunities, gain a competitive advantage, and build loyalty into the
business strategy, it is helpful to segment customers. Customer
segmentation will also play a role in step 2, listening to the VOC.
Total customer Total value

Typically, various customer segments deliver disproportionate value: i.e.,
the greatest value can from a small potion of your customer base.
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5/7/2015
Step 2:
Listening to the voice of the customer

9
1 -9
Step 2: Listening to the voice of the customer (VOC)

• Select sources of customer information
Sources of customer information
Internal & Listening Research

External data post methods
• Existing company information. • Complaints. • Interviews.
• Industry experts. • Customer service representatives.
• Focus groups.
• Competitors. • Sales representatives. • Surveys.
• Billing. • Observations.
• Accounts receivable.
• Collection.
When gathering VOC data, help the customer translate vague and
sometimes emotional statements into specific and measurable
customer requirements.
Strategic Management and Business Analysis - 2014 10
1 -10
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VoC sources ~ Reactive & Proactive

Credit notes / Returns
Customer Interview
Customer exit survey
Customer Surveys,
Customer Complaints
Sales Reporting
Customer Voices
(Raw Data)
Special Order Inquiry Industry News /

Information
Customer Support Centers Customer Suggestion
Customer Requirements
Overview of the VoC to CTQ process & tools
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5/7/2015
CTQ Tree – should Detailed Specifications

look like this Response Performance to
(Y) Schedule
Deviation from schedule in

Measure completed units
Customer
Requirement
100% of committed ships
Customer Product
Target prior to 5:00 pm as received
Needs arrives on-time on Customer receiving dock
Common mistakes:
Specification LSL = 0 hours late
• Not measurable Limit(s) USL = 6 hours early
• Problems or
solutions stated
Allowable
instead of defect < 3.4 DPMO
requirements Rate
Structure for this session

• Introductions & your experience with VoC
• Background: what is VoC?
• Planning & preparing for VoC collection
• The interview sequence, questions & questioning techniques
• Interview analysis & follow-up
• Summary, questions, plus & delta

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• Consider Planning VoC collection
– Existing (reactive) data before going ‘proactive’

– Segmentation
– How to ensure representative samples
– Costs (budget) and planning / availability
• If interviewing, plan for multiple interviews, with perhaps a
follow-up interview for certain customers
– Choice of location & time for interview
– Interview structures & techniques (see later)
– Prepare an outline with questions; do a rehearsal
– Expect to deviate – “No plan survives it’s first use”
• Plan time for data analysis afterwards
Interviewing fundamentals
• Use interviews to better understand an area
– Gather information
– And the «feelings» which go with it,
– On a given subject,
– According to given objectives and a finality (result)
• It’s a social situation which sets a relationship and is part of a context
– One interviewer and one interviewee

– A dialogue with an objective
• Based on the interviewer’s ability to listen
– With a constant effort to reformulate the interviewee’s answers

– Avoiding asking questions which would induce the answers
– Not orientating or influencing the interviewee
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Preparing an interview guide

• Determine the topic : in this case, it’s ‘gather the VoC
• Clarify the desired outcome for each topic. You need:
– From Kano model, must be’s, more is better, delighters…
– Customer value calculation
– Measurable specifications (CTQs)
• Design a process to reach each outcome
• You want to ‘get into the mind’ of your customer as much as possible,
(see next slide)
• Consider a ‘gemba visit’. This means ‘observing how people use your
offering in its natural environment’.
– The more you can understand your customer’s situation, the more likely your
offering will meet their needs.
– Tell your customer that you want to see the offering ‘in action’
– Don’t talk to buyers only, also talk to users
Interview attitude is important

Empathy Enter in the other person’s intimate perceptual world
– Feel the interviewee ideas, sentiments, sensations and reflect
them.
– It’s like putting oneself on the same “wavelength”.
Unconditional Involve yourself in the relationship
Acceptance
– Be really present as a person. The interviewee feels that (s)he is
listened to and accepted.
– It reflects « authenticity », « transparency ».
Do not judge or evaluate what the interviewee says and the way (s)he
behaves
– Accept and grant any immediate feeling expressed by the
interviewee (confusion, resentment, fear, hesitation).
– Accept that the interviewee has a “different” logic and/or
behaviour, culture from you
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5/7/2015

Interview sequence
• Opening
• Collect data
– Be aware of the common ‘traps’
• Customer complains
You (incorrectly) write down complaints as needs
• Customer suggests solutions

You (incorrectly) write down solutions as needs
• Confirm data
• Close
• Follow-up (confirm requirements)
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Types of interview & sequence
• Structured
• more or less fixed sequence of pre-formulated questions.
(Iterations (tests and feedback) during design of interview
guide)
• Semi-structured
• You want to cover some areas, but the sequence is not
important.
• Adjust the wording of the questions and ask follow-up
questions as you go along
• Open (non-structured)
• Maybe a pre-formulated starting question, but thereafter the
interviewee steers
Basic interviewing techniques
• Open questions. Set the scene, collect background data

• Importance of Active Listening
– The listener provides feedback, (verbal and/or non-verbal), to the
speaker on the extent to which the speaker’s message has been
understood, and will be retained.
– Using encouraging words and reassuring sounds to convey interest (“I
see.”)
– Restating in your own words what the person said.
– Repeating exactly what the person said (“Mirroring”).
– Reflecting to show you understand how they feel (“You were pretty
upset by this…”).
• Confirm data – use ‘closed’ questions
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5/7/2015
The 6 barriers to active listening
• Not keeping an open mind by letting biases interfere

• Jumping to conclusions
• Interrupting or debating the interviewee:
– seek understanding first!
• Monopolizing the conversation (70/30 rule)

• Thinking ahead to your next question
• Not taking notes (can be seen as a lack of interest)
– But also record the interview for ease & completeness
More advanced ~ ‘scaling’ questions

• Ask your customer to rate their performance on a scale
– On a scale of 1 to 10, how do you rate your current
performance on this issue?
– What would you have to do, to go from say, 7 to 9?
Good Numeric Scale
1 2 3 4 5 6 7 8 9 10
Strongly Disagree Neutral Agree Strongly
Disagree Agree Don’t forget to
check
Poor Numeric Scale
your “R&R”
1 2 3 4 5
(Minitab)
Disagree Neutral Agree
Choose ‘1’ if you disagree, 3 if you are uncertain, and 5 if you agree.
Scales with greater than 7 levels behave like continuous variables
-
this gives more information when analyzing the data. 1 -24
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Affinity Diagram Definition
• Affinity Diagram: a method for organizing ideas into

related groups. Useful for summarizing VoC interviews
Product Service
FUNCTION COLOUR DELIVERY SUPPORT
TRIPS VOLTAGE
PRICE
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Creating a VOC Affinity Diagram

• Assemble the VOC data from your collection process
• Analyze, then transfer the major themes onto sticky notes
• Post the ideas on a wall or flip-chart, in no special order
• Ask the team members to move the notes into groups (‘clusters’), that they
think ‘belong together’
– Observe people, don’t do the work yourself
– No talking, encourage people to work quickly
– Allow people to move ideas back and forth
– Allow clusters within clusters
• After 10 minutes, stop the team, and review
– Are patterns emerging?
– What logical groups can you create? (‘product’ & ‘service’)
• Then, add a sticky note to give a name to each group
Example: CTQ Tree

Need Drivers CTQs Specification for
each CTQ
Time between arrival at hotel,
and assignment of room <5 mins
Timeliness Time to access business e-mail
is less than 1 minute
Additional electrical outlets are

available, without climbing under
“Quality” desks or moving furniture
Accessibility
accommodation
on business trip Access to internet is available anywhere
in room or hotel
Performance
Room reserved should be room assigned
What other CTQs are important to you?
General Specific
Hard to measure Easy to measure

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End of presentation ~ Thank you
Questions
Feedback
What did you learn in this session?
How would you summarize this session?
• Plus? • Delta?
________________________ ________________________
________________________ ________________________
________________________ ________________________
___ ___
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5/7/2015
Appendix 3 – A simple VOC Data Collection Process
Reactive
Cover Kano
Analyze Must Be’s
Existing Data
Quantitative Qualitative
Proactive
Collect Latent Collect Stated Clarify Pending

Needs through Needs through Issues in Focus
Detect Kano Gemba visits Interviews Groups
Delighters
Conduct
Proactive
Surveys to
quantify needs
– Going to Gemba is the preferred approach to VOC.

However relying on it as the only source of VOC may be
insufficient or impractical. Quantify Kano
Satisfiers
– Voice of Customer data collection for may be a multi-step process.
A VOC Plan is a commonly used tool to develop
and implement this process.
Process approach – what ‘creates’ Customer Satisfaction?

What drives customer satisfaction?
What do we do differently in order to improve?
% production
on time perfect
Order Fulfillment on-time delivery order rate
order fill rate

ease of
doing
business
Demand Production Sourcing & Manufacturing
Warehousing Order Entry Shipping
Forecasting Planning Purchasing and Assembly
billing
accuracy
Receive
Sub- Sub- Final
raw Test Packaging
Assembly 1 Assembly 2 Assembly
material
product
performance
packaging
cycle time1 cycle time2,3 cycle time4 performance
cycle time5
raw materials
cycle time6
quality
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5/7/2015
Process Tree Diagrams – A way of getting to key process measures

Effectiveness or Efficiency Goal Effectiveness or Efficiency Drivers
A measure used to evaluate the extent to which a The characteristics or attributes of the process that affect the
process meets a customer expectation or a ability to meet process effectiveness and efficiency objectives:
business efficiency objective: measures activities or steps inside the process
measures that describes the outcome of a are enablers of process success or failure
process
are the upstream causes (x’s) of process outcomes (y’s)
big enough to be seen by customers and
are derived and validated through measurement
business leadership
are statistical “predictors” of process outcomes
is the effect (y) of the process causes (x)
are the focus of well-defined improvement projects
can be analyzed by looking inside the process
can only be affected by adjusting the process
Example Key Drivers (Customer Goal)

accuracy of customer usage data
(effectiveness drivers)
demand variability
forecast frequency
forecast
# of line changeovers per shift
materials availability
cycle time line downtime

(process (Where?
effectiveness goal) Which Step?) changeover cycle time
100%
process interruptions
on-time delivery
rework
productivity
equipment availability
indicates drivers that are considered key (predictors of process effectiveness)
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5/7/2015
KANO ANALYSIS: Classifying customer needs

Satisfaction +
Delighters
service Primary Satisfiers service

dysfunctional Fully Functional
Must be
-
dissatisfaction
Kano Analysis (Continued)
• Requirement Types:
– Must – Be (Dissatisfies): Requirement that can dissatisfy,

but cannot increase satisfaction.
– Primary (Satisfies): the more of these requirements that are

met, the more one is satisfied.
– Delighters (Attractive Qualities): if the requirement is absent,

it does not cause dissatisfaction, but it will delight clients if
present.

36
1 -36
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5/7/2015
Step 3:
Translating VOC to CCR’s

1 -37
Step 3: Translating VOC to CCRs

• What is a critical customer requirement? (CCR)
– Important to the customer – “customer cares about it”
• Value proposition.
– Specifies requirement – “must have” or “must be” attributes.
– Ultimately satisfy.
– Potentially delight.
• Can be measured.
• Establishes a target.
– Customer specifications.
– Acceptable range of performance.
• Translating VOCs to CCRs:
– Organize and verify customer needs data into CCRs.
– Determine CCR priorities.
1 -38
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5/7/2015
Steps in specifying customer requirements

from general, ambiguous, vague, or emotional customer feedback or comments
1. Group similar and common statements received from customers. Select or adjust comments form each
group to from a single statement which best represents the VOC.
2. Based on clarification gathered through voice of the customer, state the key customer issue (concerns,
values or expectations) associated with each VOC statement.
3. Clarify, in measurable and specific terms, the customer requirement(s) associated with
the key customer issues.
Critical customer requirement Key customer issue Voice of the customer
The specific, precise, and The real customer concerns, values, actual customer statement and
measurable expectation which a or expectations regarding a product comments which reflect their
customer has regarding a product perception of:
or service or service. Void of emotion or bias,
the statement describes the primary • An attribute of a product or
• Mower starts within two pulls on issue a customer may have with the service
the cord product or service. Describes the • An experience with a a product or
• Mower starts with an effortless pull experience surrounding the service or its delivery
on the cord not exceeding 24 in attributes of the product or service
length • An encounter or experience with
expected or desired by the a business process or
• Add additional menu items to the customer. representative
voice system (bad)
Wants the mower to start quickly “ this mower is way too hard to start”
• Customer reaches correct person and painlessly
the first time within 30 seconds
(good) Wants to talk to the right person “I’m always on hold or end up
• every design feature needed is quickly talking to the wrong person”
built into the package
The software does what the vendor
• The software is fully operational said it would do “this package doesn’t do anything”
on the customer’s existing system
Prioritize CCRs
• Determine CCR Priorities

– Translate all key VOC data into CCRs.
– List all CCRs identified.
– Prioritize CCRs based on how well they will meet the project
objectives.
– Verify CCR priorities within the team and with the sponsor.

1 -40
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5/7/2015
Step 4:
Developing Measures and indicators
41
Step 4: Developing measures and indicators
• Once the CCRS have been identified, translating

the CCRs into critical to quality (CTQ) or output
indicators requires:
– Identifying and selecting output indicators.
– Establishing output performance targets.

1 -42
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5/7/2015
Process output indicators include

CTQ’s & CTP’s
CCR’s Customer VOC

CTQ’s issues
CTP’s
VOB Business CTP’s VOC - Voice of the Customer
issues
CCR - Critical Customer Requirements
CTQ - Critical to Quality
VOB - Voice of the Business

CBR - Critical Business Requirements
CTP - Critical to the Process

1 -43
CTQ & CTP Examples

Critical to:
The Customer
The Market
Process Output CTQ’s
Critical to: Indicators Price/unit
The Business Delivery
The Regulator CTQ’s Time
The Employees Dimensions
Purity
CTP’s Reliability
cost/unit Color
Productivity CTP’s Service level
Compliance with
regulations
Changeover
Time
Safety
Certification

1 -44
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5/7/2015
Analyze Symptoms
• A symptom is the outward, observable evidence of a problem.
It is an output (Y)
• Examples:
– A Customer returns a defective product.
– A hotel guest waits a long time to check in.
– A customer must wait weeks for a replacement part.
– A customer closes an account because of dissatisfaction with the
service.
– Clients are not seen until long after their scheduled appointment
times.
– Some electronic components from a supplier are defective when
tested.
– Billing errors are common.
45
Analyze Symptoms
• To analyze symptoms, a project team must:

– Develop operational definitions.
– Measure the symptoms.
– Define boundaries.
– Concentrate on the vital few.

1 -46
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5/7/2015
Develop Operational Definitions

Objective from Mission Statement: Definition Required for:
Reduce the number of late parts shipment. “Late’
Eliminate lengthy delays in guest check–in. “Lengthy”
Reduce the frequency of defects discovered “Defects”

by customers in model D-21. “Discovered by customers”

1 -47
• Additional definitions:
– Example:
Mission Statement Definition Definition Additional Definitions

Required for: Required for:
More then
Reduce the number When is the order
“late” two days
Of late parts shipments considered “received”?
after
Order has
been received
It is important to ensure that all team members agree on the

definitions ok key terms.

1 -48
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5/7/2015
Measure the Symptoms

1 -49
Measure the Symptoms
• All business problems have symptoms that can be

objectively measured.
• If you need to develop a measure, asking these
questions may be helpful.
– How do customers evaluate the symptoms?
– Where is each symptom observed?
– What documentation exists?
– What method should be used to obtain the measure?

1 -50
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5/7/2015
Measure the Symptoms (Con’t)
• What is the appropriate unit of measure?

– Time: years, months, weeks, days,…..
– Cost of Poor Quality: Dollars
– Defects: Number of defects, or percentage.

1 -51
The fundamentals of Lean 6s & customer focus
DEFINE MEASURE ANALYZE IMPROVE CONTROL
Six Sigma is
driven by the
“Voice of the
Customer”
Process =
Improve
Effectiveness of
‘Product’ and
‘Service’ elements
of the ‘Offer’
VALUE VALUE STREAM FLOW PULL PERFECTION
Lean = Improve Efficiency

in offer delivery
26
5/7/2015
Reminder - Starting Right: Project / Sub

Focused projects are Efficient projects; that is why “funnel” down projects
Main Project
Main Sponsor: Overall process owner for a process that does not
achieve the set goals
Main Project leader: Collect a group of Green Belts and split up the main
project into more focused subprojects
Subproject Subproject Subproject Subproject

1 2 3 4
Sponsors: Process owners that are directly responsible for the
process that the subproject focus on.
Project leader: Drives the focused subproject during a short en
intensive period (seminar mode project).
Possible Ways to Narrow Scope
• Focus on one region versus the whole country
• Focus on one plant versus one region
• Limit to one type of product or service
• Zero in on one aspect of the process

that is performing worse than the rest
• Use SIPOC or ‘Z’ End

SIPOC to help
result: a well-scoped project
27
5/7/2015
Value Add – A Customer Perspective (Manufacturing)

Customer Value Add Business Non-Value Add Non-Value Add
(CVA) Questions (BNVA) Questions (NVA) Questions
Does this task reduce owner
• Does the task add form, feature, financial risk? • If the customer knew we
or function to the product or were doing this, would they
Does this task support financial
service? request that we eliminate the
reporting requirements?
activity so we could lower
• Does the task enable a Would the process of our prices?
competitive advantage (reduced producing/selling the product
price, faster delivery, fewer break down if this task were • Does the task fit into either
defects)? removed? of the other two categories?
• Would the customer be willing to Is this task required by law or • Can I eliminate or reduce
pay extra or prefer us over the regulation? this activity?
competition if he or she knew we Typical BNVA Activities:
were doing this task? • Typical NVA Activities:
• Order Entry/Processing
– Counting
• Purchasing
• Typical CVA Activities: – Handling
• Product Sustaining/ Development
– Chip Cutting – Inspecting
• Sales/Marketing
– Molding – Transporting/Moving
• IRS/OSHA/EPA reporting
– Heat Treating – Stocking/Storing
• Internal Financial Reporting
– Stamping/Fabricating – All Rework Loops
• Customer Required Inspection
– Painting – Signoffs
• Point of use material/tool retrieval
– Assembling
More on this later
28

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5/7/2015

Six Sigma Methodology

What is How are we What is What How do we

Strategic Management and Business Analysis - 2014

Six Sigma Orange Belt (SSGB)

Strategic Management and Business Analysis - 2014

Who Are Our Customers?

• A customer is any person or organization that receives

• Internal customers are colleagues or departments who

• External customers are individuals or organizations

Strategic Management and Business Analysis - 2014 41 -4

What Do Customers Want?

Service & Safety Service requirements, after-purchase reliability, parts availability,

Strategic Management and Business Analysis - 2014

Determine what to measure: listen to customers

• Step 1: Develop a customer–Focused • Step 3: Translating voice of the customer

• Step 2: Listening to the VOC • Step 4: Developing measures and indicators

• Probe for complete • Establish output performance

Strategic Management and Business Analysis - 2014 61 -6

Strategic Management and Business Analysis - 2014 71 -7

Step 1: Develop a customer-focused business strategy

Total customer Total value

Strategic Management and Business Analysis - 2014 81 -8

Strategic Management and Business Analysis - 2014

Step 2: Listening to the voice of the customer (VOC)

Internal & Listening Research

VoC sources ~ Reactive & Proactive

Special Order Inquiry Industry News /

Strategic Management and Business Analysis - 2014 1 -11

Overview of the VoC to CTQ process & tools

Strategic Management and Business Analysis - 2014 1 -12

CTQ Tree – should Detailed Specifications

Deviation from schedule in

Strategic Management and Business Analysis - 2014 1 -13

Structure for this session

• Background: what is VoC?

• Planning & preparing for VoC collection

• The interview sequence, questions & questioning techniques

• Interview analysis & follow-up

• Summary, questions, plus & delta

• Consider Planning VoC collection

– Existing (reactive) data before going ‘proactive’

• Use interviews to better understand an area

– One interviewer and one interviewee

– With a constant effort to reformulate the interviewee’s answers

Preparing an interview guide

Strategic Management and Business Analysis - 2014 1 -17

Interview attitude is important

Structure for this session

• Background: what is VoC?

• Planning & preparing for VoC collection

• The interview sequence, questions & questioning techniques

• Interview analysis & follow-up

• Summary, questions, plus & delta

Strategic Management and Business Analysis - 2014 1 -19

• Customer suggests solutions

Types of interview & sequence

Strategic Management and Business Analysis - 2014 1 -21

Basic interviewing techniques

• Open questions. Set the scene, collect background data

Strategic Management and Business Analysis - 2014 1 -22

The 6 barriers to active listening

• Not keeping an open mind by letting biases interfere