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Master of Business Administration - MBA Semester 3

Total Quality Management Specialization

QM0010 - Foundations of Quality Management

(4 credits)

(Book ID: B1240)

ASSIGNMENT- Set 1

1. Write a brief note on the concept of Total Quality Management. Differentiate between QualityControl and Quality Assurance.

Ans:

Concept of Total Quality management

Total Quality management is concerned with moving the focus of control outside the individual towithin, the objective being to make everyone accountable for their own performance, and to getthem committed to attaining quality in a highly motivated fashion. The assumptions a director or amanager must make in order to move in this direction are simply that people do not need to becoerced to perform well, and that people want to achieve, accomplish, influence activity andchallenge their abilities, If there is belief in this, the TQM effort will be successful.

Pillars of Total Quality Management

Total Quality Management is user driven- it cannot be imposed from outside the organization, as perhaps

can a quality management standard or statistical process control. This means that the ideas for

improvement must come from those with knowledge and experience of the processes, activities and tasks;this has massive implications for training and follow up. TQM is not a cost cutting or productivity

improvement device in the traditional sense and it must not be used as such. Although the effects of a

successful programme will certainly reduce costs and improve productivity, TQM is concerned chiefly with

changing attitudes and skills so that culture of the organization becomes one of preventing failure- doing

the right things, right first time, every time.

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Quality Control:Quality Control activities include inspection and testing of the products or services

after they are produced and just before their delivery to the customers. The inspection and testing

activities are carried out to check conformity of the product with specifications / requirements. If any of

the products are not in conformance with the specifications, they are quarantined / segregated and the

actions as specified (repair, re grade, scrap) are initiated.

Quality Assurance:Quality Assurance refers to planned and systematic production processes that provide

confidence in a product's suitability for its intended purpose. It is a set of activities intended to ensure thatproducts (goods and/or services) satisfy customer requirements in a systematic, reliable fashion.Quality assurance covers all activities from design, development, production, installation, servicing andother associated activities. This introduces the rule Right first time. PDCA (Plan- Do- Check Act)approach is the most widely used concept in Quality Assurance.Quality Assurance is about improving and stabilizing the production and associated processes to eliminate or

limit the defects from occurring, while the Quality Control is about inspection and testing and preventing

the defects from getting delivered to the customers. However, QA does not necessarily eliminate the

requirement for Quality control in terms of inspection and testing.

2. Explain quality economic approach and quality environmental approach.

Ans:

Quality economic approach:

Business conditions are changing and evolving so as theeconomic environment. In this competitive environment, organization requires new approaches tosurvive. Quality is becoming prime priority for most of the organizations and implementing aquality system requires management commitment to develop a quality assurance program. Thisembraces a variety of activities designed to ensure reliability in the first place, specific qualitycontrol measures to monitor quality on a routine basis.

The goal of quality system should be to avoid errors rather than todetect them. The reduction of correction costs is recognized as a benefit which can be offset against thecost of the system.

The quality economical approach is to provide quality product or service at competitive prices whilereducing wastage, decreasing cost, providing high customer satisfaction, gaining competitive advantage,provide a vibrant economy that affects in terms of taxation, government spending, general demand,interest rates, exchange rates , and overall development and growth.

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Following are some of the quality economical aspects:

Reduce CostCost is an important concern for organization, in fierce competitive market, organization are struggling toprovide quality at lesser cost to gain competitive edge. Quality helps an organization to reduce wastage andcome up with quality product or service at competitive price.

Now the question arises as how to reduce cost and get quality?

The quality costs are the cost of not doing the right things right first time or the cost incurredbecause failure is possible

Philip Crosby published in his book Quality is free, stressed upon the removal of defects which isin built cost in running any business. There are various costs associated, with the qualitynegligence.

Crosby suggested that by eliminating all the errors and reaching zero defects, it will not onlyreduce the cost but also satisfy the customers.

By reducing complexity and installing failure-prevention measures, there will be less spending onfailure detection and correction. After initial investment made, in long term customer requirementcan be meet by spending less. Low cost can result from high productivity and high capacityutilization .Improvement in quality leads to improvement in productivity, which in turn lower thecosts. Lower costs is also a result of innovation in product design and process technology, as itreduces the cost of production .Many Japanese companies adopted product innovation and processtechnologies ,they refined the designs and manufacturing processes to produce high qualityproducts at low cost, resulting in higher competitive advantage than before.

As high defective rates lead to high cost and vice versa. Organization need to control itsdefectives, errors and damage rate to control its cost factor and improve its quality substantially.

High defectives increase not only the cost of production bust as well as customer perception. Tosurvive and gain competitive advantage organizations need to work on its processing structure andimprove its quality

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Reduce wastage

The wastage increases the cost and lead to high pricing and in the competitive scenario it isdifficult for organization to survive with high cost products. Quality approach provides theelimination of wastage at every process. Wastages are due to mistakes and wrong process, LikePoka yoke (mistake proofing) a method that concentrates on elimination of mistakes to avoidwastage.

Gain Competitive advantage

Quality has become a key issue for companies. Competitive advantage denotes a firm ability toachieve market superiority .To sustain in the competitive market an organization needs to performabove average. Organizations which are capable to satisfy the customers need and provide value tothem, can gain competitive advantage over their competitors. It requires a lot of resources andutilization of them to gain maximum advantage and satisfy customers need better than others.

An organization absolute goal should be gaining competitive advantage through customersatisfaction .A quality system designed on people centric approach is viable, and other importantthing is the ability of an organization to win or retain customers, its image or credibility, and the

staff morale.

These are various tools to gain competitive advantage:

Creativity and innovation

Creativity is essential for continuous improvement in an organization. According to the Webstersdictionary creativity means, to produce through artistic or imaginative efforts and innovationmeans doing something new or unusual together they mean doing or producing something new orunusual through imaginative efforts .creativity and innovation help organization to think out ofbox and bring out new solutions to various problems. Now a days organizations are concentrating

on breakthrough thinking and encouraging bringing out quality in every dimension through newideas and innovations. Creativity is considered as an important tool to gain competitive advantage.

Poka Yoke (mistake proofing)

This method helps to avoid common human errors; this is simple mistake proofing process whichfocuses on two aspects such as predicting and recognizing that a defect is about to occur, and thenproviding signals and warning or by detecting and recognizing the error after it has occurred andthen stopping the process so that no further errors can be done, with the application of Poka Yokemethod mistakes can be avoided and this helps to reduce wastage and enhance quality.

Just in Time:

Toyota Motor Co. in Japan has developed this Just in Time (JIT) or lean concept to improve thequality and performance in production and manufacturing.

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The concept is based on three essential elements

Optimal standardization with everything measured and under control.

Workflow optimization

Pull production

These are some of the other tools to gain competitive advantage

Kaizen

Zero defects program

Benchmarking

Business Process Re-engineering

Six sigma

Face Competition: Business organizations do not want competition, though facing competition isinevitable for most of them, as the market is changing all the time, customers need and want arechanging, new competitors and technologies are entering market. The competition depends onmarket in which the business operates ,It can be from many small or large rival business or fromthe rapidly changing market , or from the technology which is being developed very quickly ,previously, it was considered that high quality -high price .But now, customers are accessible tohigh quality at low prices .Due to high competition, an organization needs to reduce its internalcosts of (sorting, inspection, and rework scrap) for providing a quality product .Business couldsurvive and gain competitive edge by providing quality, reducing price and cutting cost .

Right Pricing:

Price is important characteristic of product .People are attracted and price conscious. Reduction ofcosts and wastage leads to right pricing.

Increase Market share: In a competitive business scenario gaining maximum market share is noteasy .Organization performance depends upon their customer satisfaction. To gain competitiveadvantage and gain market shares, organization needs to concentrate on the quality.

Satisfy stakeholders, expectations: The quality approach emphasis on quality, gaining competitiveadvantage, making profits and satisfying customer expectations.

Provide overall economic growth: Quality provide a vibrant economy that affects in terms oftaxation, government spending, general demand, interest rates, exchange rates and globaleconomic factors.

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Quality Environmental Approach:

Industrial and economic development have led to faster depletion of

natural resources, forestry, water, coal, and petroleum etc have given impetus to growth and now with the

fast depletion of resources the crisis is approaching. Pollution, carbon and gaseous emission, are adding to

crisis. Large scale usage of natural resources is not only causing depletion but also leading to wide spread

air, water and noise pollution that is again leading to hazardous health problem and severe consequences .Emission of hazardous gases are depleting the ozone layer in the atmosphere and disturbing ecological

imbalance. The consequences have alarmed the society, organization and various other institutions. Now

organizations are aware of their environmental and social responsibility and are taking various measures to

safeguard environment.

Social responsibility of business organization is to keep check on issues pertaining to environment. To

discharge the responsibility organizations need to accomplish Environmental Quality policy. Total quality

management provides a model for business excellence by advocating on environment management as a key

business process to create eco- friendly environment and built premises of secure environment and better

working condition.

Quality management concentrates on the activity that lead to environment pollution directly or indirectly

and causes harm to environment and health, hygiene of people in an around the business. It checks the

problem and consequences of the environmental issues and concentrates on the following areas

1. Generation and discharge of pollutants to the environment, namely air, waste or excessive noise

2. Industrial energy management

3. Management of industrial health, hygiene and safety

4. Management of ecology and forestry2

Identify environment related issues

Area need to focus to solve the issue

Measures the action to achieve

Quality management to check environmental issues

Identify environment realted issues Area need to focus to sove the issue- Meausres the action to achievethe results

Following are the steps to check the environmental issues:

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The outcry to save environment, leads business organizations to take serious initiative to manage

environment and design mode and process to achieve eco friendly system. Tata Group of Industries is one of

the examples that follows eco governance, the township of Jamshedpur and surrounding is model of eco

governance .This group has marked eco governance for superior business performance.

The quality environmental approach emphasis organization to take accountability to society and check

environmental issues by taking various steps, such as, making employees aware of the need to control andimprove environment and make them understand the management commitment ,for environment up

gradation, and to feel them motivated and inspired to act.

Organizations need to identify areas that require attention and monitor it to discharge, air polluting units,waste disposal operation etc. Proper planning and documentation is required to manage the environmentquality in the company -such as, what is to be done, how and by whom. Facilities and capabilities is to bedeveloped for measuring controlling and improving all environment related activities and processes bysetting up effluent testing laboratories, disposal tanks and treatment plants, installation of pollutioncontrolling equipment and instruments. People should be trained empowered and encouraged to takeinitiative and come up with the innovative ideas to deal with the environmental issues and improvements.Measuring, controlling the environment as per planning and reviewing for continuous improvement and

dealing with the side effects of it.

Proper documentation, record keeping and data control system, are required for implementing and

developing a quality environment system.

Depicts the Principal Scopes of Different ISO-14000 Principal Standards on Environment Management

System

International Standards on Environment Management System:

ISO-14000 Principal Standards

1. ISO-14000: Environment Management System General guidelines

2. ISO-14001: Environment Management System Specifications with guidance for use registration

authorities and third party inspection

3. ISO-14004: Environmental Management System General guidance on principle systems and supporting

techniques

4. ISO-14010: Guidelines for Environment Auditing General principles of environment auditing

5. ISO-14011: Guidelines for Environment Auditing Audit procedures

6. ISO-14012: Guidelines for Environment Auditing Qualification criteria for environment auditors

7. ISO-14013: Guidelines for Environment Auditing Management of environment auditing system

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8. ISO-14014: Guidelines for environment audit review

9. ISO-14015: Guidelines for site assessments

Table 2.7 Illustrative examples

TQM and environment

management Issues

Areas of Address Measures and Actions

1. Control of water pollution Control of watercontamination

Control of water

discharge

Checking possible sources of contamination

Measuring water quality at identified points

Preventing or minimizing contamination

Effluent treatment

discharge water

Monitoring of water

quality at different

outlets

Control of particulate

Designing and laying discharge lines

Measuring water for polluting chemicals

Deciding treatment plan and process

Effluent treatment of discharged water

Monitoring outgoing discharge water

Water sample collection plan and analysis

Reporting and conformance study

Improvement plans and actions

Identification of sources & processes

Standardization of processes to minimize

particulate generation

Installation of equipment and facilities for

preventing particular discharge to air

Measuring air samples at critical points forconformance and improvement

Audit of energy usage and consumption

Identification of controls and improvement

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3. Explain the importance of customer satisfaction with an example. How do you measure customersatisfaction?

Ans:

Customer satisfaction occurs when products and services meet or exceed customer expectation. Toexceed expectations, the organization must deliver ever- improving value to its customers.Customers no longer buy solely on the basis of price. They compare the total package of productsand services that a company offers with the price and the competitive offerings.

This total package influences the perception of quality and includes the physical product and itsquality dimensions; pre-sale support such as ease of ordering, rapid on-time and accurate deliveryand post sale support such as field service, warranties, and technical support. If competitors offer

better choices for similar price, the customers will rationally select the package with the highestperceived quality.

If a competitor offers the same quality package of goods and services at a lower price, customerswould generally choose the one having the lower price. However, lower prices require lower costsif the company is to continue to be profitable. Quality Improvements in operations reduce costs.Thus, understanding exactly what customers want and their perceptions of value is absolutelycrucial to competitive success. Business must focus on both continually improving both thecustomer benefits package and improving the quality of their internal operations.

2. Control of air pollution

3. Energy audit & management

generation

Source of waste

Control of waste

Energy Editing

points

Identification of methods of control

Installation of control measures

Measurement of data and analysis

Improvement actions and monitoring

Adoption of audit system

Resource deployment

Audit result review and corrective actions

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In addition to value, satisfaction and loyalty are influenced greatly by service quality, integrity andthe relationships that organizations build with customers. One study has found that customers are 5times more likely to switch because of perceived service problems than for price concerns orproduct quality issues.

Example: 1

Manufacturing is a customer for Purchase. In a typical manufacturing situation, manufacturing

(production) give the requirements to purchase who make necessary arrangements to make available thesame for manufacturing.

Example: 2Nursing unit can be considered as a customer for the Laundry division in a hospital.

Measuring Customer Satisfaction:

Customer feedback is vital to a business. Feedbacks enable the company to learn how satisfied their

customers are with its products and services. Measure of customer satisfaction benefits the businessthrough:

customer perceptions of how well the business is doing in meeting the customer needs and

identify causes of dissatisfaction and failed expectations as well as drivers of delight.

ing and better strategic

initiatives.

and coaching of employees.

An effective customer satisfaction measurement system results in reliable information about customer

ratings of specific product and service features and about the relationship between their ratings and the

customers likely future market behavior.

It is important to keep in mind that customer satisfaction is a psychological attitude. It is not easy to

measure and it is influenced by customer expectations and their perceptions on quality and value. Thus it is

difficult to reduce these complex relationships in to a single measure.

Customer satisfaction measures may include product attributes such as product quality, product

performance, usability, maintainability and service attributes such as attitude, service time, on-time

delivery, exception handling, accountability, technical support and image attributes like reliability and

price; and overall satisfaction measures.

The most important customer data includes comparisons with key competitors. Companies commission third

parties to conduct blind surveys to determine who key competitors are and how their products and services

compare. Competitive comparisons often clarify how improvements in quality characteristics are being

overlooked.

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Survey Design:

The purpose of the survey needs to be identified as a first step in designing surveys. Surveys should bedesigned in such a way that survey results provide appropriate information to the managers for decisionmaking. Customer satisfaction should not be limited to externals customers only. Information from internalcustomers and supporters also constitute to the assessment of the organizations strengths and weaknesses.

Analyzing and using customer feedback:

It is important to use customer feedbacks to improve a companys products and

processes. By examining the trends in customer satisfaction measures and linking satisfaction datato its internal processes, a company can determine the status and areas for improvement. Thecompany may assign the task of developing and implementing improvements identified throughcustomer satisfaction surveys.Determining and using customer satisfaction information should be viewed as a key business process. There

are number of reasons why customer satisfaction efforts fail to produce useful results. Some of the reasons

are:

a) Poor measurement schemes

b) Failure to identify appropriate quality dimensions.

c) Failure to measure potential and former customersd) Lack of comparison with leading competitors

4. Explain Kaizen Approach to Problem Solving, with an example.

Ans :

Kaizen Approach to Problem Solving

Often it was an awareness of how hard it is for people to concentrate on improvement when they keep

thinking about getting their work done. To some extent it was a matter of their innate respect for thepeople who do the work. For all these reasons, years ago the Japanese inventors of the Lean improvement

systems came up with a different improvement model they called Kaizen.

Kaizens (or blitzes, as they are sometimes called) are improvement events where people work only on

improvement for a few days, up to a full week. In a traditional Kaizen project, the people from a particular

work area come together with a few experts for four or five days straight and complete most or all of a

DMAIC cycle on a narrowly targeted high-priority issue. ("We need to process loan applications faster.") The

model has been so successful that this basic approach has been adapted to other uses such as service design

sessions.

Example of a Banks Use of Kaizen

A major national bank started using the five-day Kaizen approach whenever it wanted to attack process

speed and efficiency problems. The banks Kaizen events all share four characteristics:

The purpose is to take a cross-functional view of the process or work area. Participants are people who are directly involved in, and usually responsible for, various parts of the

process. The team is cross-functional. Participants are pulled off their jobs for several days at a time. The project is well-defined going in because there is not time to redefine the purpose or scope.

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A Typical Kaizen Schedule

Here is a sample agenda which the bank uses for the five days:

Day 1 is an afternoon spent training participants on topics that cover basic concepts related to the goals of

the project. This could include teaching relevant Lean or Six Sigma concepts and reviewing relevant data.

Day 2 is spent looking at the process with new eyes. Participants do a "unit walk," a tour of operations

affected by the problem or situation being studied where they simulate being a work item flowing through

the process. The group visits each portion of the process, where, because there is cross-functional

representation, they have the opportunity to hear insights from someone who works in that area. The group

creates a value stream map (a picture of the "as-is" situation) that captures the basic process steps, such as

cycle times, number of steps, rework loops, queuing delays, work in progress (WIP) and transportation time.

Day 3 is designed around clarifying problems and brainstorming solutions. The team re-organizes the value

stream (on paper) or creates a "should" map that depicts how the process would need to function to solve

the identified problems. The outcome includes developing action plans for implementing solutions or trial

simulations for the next day.

Day 4 is used to test the solutions, conducting a simulation within the operations if possible. The group

quantifies the improvement if the proposed changes are implemented, using estimates of reductions in

travel time, queuing time, work in process, number of steps, number of forms, and so on.

Day 5 is when participants prepare and present their findings to the sponsor in a formal report-out session.

Making It Work and the Results

The bank makes this model work by having its internal consultants (equivalent to Master Black Belts) partner

with the manager/sponsor to pick problems that are extremely high priority, not only for that work area but

also for the business as whole. This makes it much easier to justify taking people off their regular jobs. Also,the goal of the event is a little more modest than a traditional Kaizen. Instead of having solutions up and

running full-bore after five days, teams are expected only to get through the simulation and piloting of

solution ideas. The internal consultant will then assist the team with full-scale implementation.

In the many Kaizens this bank has run, it has achieved results such as:

Cycle-time improvements have ranged from 30 percent faster to nearly 95 percent faster, measured

sometimes in minutes and other times in days. One administrative process went from 20 minutes to 12

minutes, and a complaint resolution process dropped from 30 days to 8 days.

Fiscal indicators have all been positive. One high-level project has allowed the bank to start charging for a

service that previously was offered free to customers. New revenues are expected to total between $6

million to $9 million per year. Other projects have led to cost reductions or loss avoidance in the hundreds

of thousands of dollars.

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An Alternative Kaizen Format

While consecutive days of intense work is the ideal, some companies have found it impossible to pull an

entire work group, or even a subset of a work group, off the job for the better part of a week.

One company worked around this issue by using the following structure:

The team was brought together for a brief meeting where the problem was explained and peoplebrainstormed what they would need to know and understand in order to find solutions.

The team leader, a Black Belt, and one team member then worked offline during a period of severalweeks to gather data and refine the problem definition.

The team was brought together for a day to rapidly analyze the problem and come up with completeaction plans not just ideas for improvement.

Since the changes likely would affect the everyday work of the team members, they and others wereinvolved in making the changes real-time on the job, and establishing a control plan.

This alternative Kaizen structure works well in this company because:

The company is still relying on the knowledge of the people who actually do the work.

It is data-based decision making. The company starts with a narrowly defined problem or opportunity statement often the

participants may be examining how they can implement a Lean principle to their process, such as"How can we make information flow better?"

The company takes steps to verify that the target is likely to bring important, measurable results.Random or "drive by" Kaizens, chosen with little forethought, may, at best, lead to localimprovements, but will not contribute to significant value stream gains.

Conclusion: Concentrating on Creativity

Kaizen events are a powerful improvement tool because people are isolated from their day-to-day

responsibilities and allowed to concentrate all their creativity and time on problem-solving and

improvement. Companies which use Kaizens have found they generate energy among those who work in thearea being improved, and produce immediate gains in productivity and quality.

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5. Explain the concept of Cost of Quality with examples. Differentiate between external failurecost and internal failure cost.

Ans :

The concept of cost of Quality (COQ) has emerged in 1950s. The concept of Quality Costs is ameans to quantify the total cost of Quality related efforts and deficiencies. This was first described

by Armand V. Feigenbaum.

Generally, the people have the perception that higher quality involves higher costs, either forbuying better raw materials or machines or by hiring expensive skills. Further more, while costaccounting had evolved to categorize the financial transactions in to revenues, expenses,overheads, it had not attempted to categorize the costs related to quality. Management is wellserved if the Quality related costs are segregated and reported so that the data can be evaluatedto understand the impact of investments on quality related activities and focus better on thequality improvement activities to reduce the overall costs and enhance the profitability.

Quality Costs in Service organizations:

In manufacturing, Quality costs are primarily product oriented, where as in service industry it ispersonnel (labour) oriented. Personnel costs account for up to 60 to 75% of the total costs.

The nature of Quality costs differs from services and manufacturing organizations. In services, theexternal failure costs like warranty and field support are less relevant compared to manufacturing.Process related costs like customer service and complaints handling are critical in addition to lostcustomers.

Internal failure costs

Internal failure costs might not be as evident in services as in manufacturing. Since there is a highlevel of customer contact during service delivery, there may not be any opportunity to correct theerrors before delivery. By the time error has been detected, the costs related to that had alreadybecome external failure costs. Hence, the internal failure costs in service organizations tend to bemuch lower for service organizations compared to manufacturing organizations. The same is thecase with the appraisal costs.

The service organizations must spend a lot of money in prevention activities (prevention costs) suchas employee training, quality planning, work flow planning and work automation in order to besuccessful in reducing the external failure costs and also to achieve customer satisfaction andretention. This is because of high level of personal interactions with the customers.

External failure costs

Work measurement and sampling techniques are extensively used to gather quality costinformation in service organizations. Work measurement indicates how much of time an employeespends on various quality related activities. The quality cost for a particular activity can becalculated by multiplying the employee costs with the proportion of the time spent for thatactivity. In some cases, the cost of quality (poor service) can be calculated based on customersatisfaction data and customer retention / loyalty data. In this case, the cost of poor quality is thecost of lost opportunities for sales revenue.

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In some cases, cost of poor quality is defined with a focus on the cost of key activities or processes.In this case the cost of poor quality is computed as the difference between the actual cost and thestandard cost. The standard cost is the cost incurred in an ideal situation or by following the bestpractice. The best practice can be either from within the organization or from an outsideorganization. This approach addresses the cost of inefficient processes.

In general, the accounting of quality costs for services difficult because of the intangible nature ofthe output.

6. Write a note on Quality function Deployment.

Ans:

Quality Function Deployment (QFD) is a Requirements Engineering approach that focuses onquality. It was originated in Japan in the manufacturing industry. It is a means of producingtechnical requirements from the customer requirements in the production and development of aproduct. The main focus of attention in QFD is the House of Quality (HOQ) in group sessions.

QFD is made up of four different phases that depend on each other, i.e. iterations: ProductPlanning, Parts Deployment, Process and Control Planning, and Production Planning.

Figure 1. QFD and software development life cycle [Betts, 1989]

All four phases follow the same procedure; they use group sessions to build the House of Quality. Inthe first phase, the customer voice is used to produce the measurable objectives. Then in thesecond phase, the measurable objectives are used to produce the high level design. Then in thethird phase, the high level design is used to produce the methods and tools. Then in the fourthphase the methods and tools are used to produce the procedures.

The group sessions need a good facilitator to complete the QFD successfully. He/she shouldcoordinate the planning, design, process and production of a QFD study.

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The House Of Quality

The HOQ is the kernel of QFD. It is a matrix that consists of sub matrices that are related to oneanother. Each section in HOQ is called room. It is a structured and systematic representation of aproduct or process development.

Figure 2. House Of Qualitiy

In the QFD class presentation , the six sections of the House of Quality were identified and described in

detail:

1. Customer requirements: As you can see from Figure 2, it is on the left side of the HOQ. Thissection documents the "voice of customer." It represents the "what's" of the system. Affinitydiagrams and Tree diagrams are used to structure the requirements.

2. Planning Matrix: It is on the right side of the HOQ matrix. It represents the CustomerCompetitive Assessment. It Provides customers views on existing products. This matrix usesquestionnaires to elicit information.

3. Technical requirements: This section lists how the company will meet the customerrequirements. This is the "HOWS" of the system. It represents the engineering characteristics orvoice of the company. This information is collected by QFD design team and structured usingAffinity diagrams and Tree diagrams. This information includes:

Top-level solution-independent metrics Product/service requirements Product/service features or capabilities

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4. Relationship Matrix: It occupies the middle portion of the HOQ digram which is the largestportion. It uses the prioritization matrix. It shows how well customer requirements are addressedby product features.

5. Roof: This is the Correlation matrix. It shows how the HOWs conflict with one another Thissection focuses on design improvement. It focuses on negative relationships in the design.

6. Targets: This the final section of House of Quality matrix. It summarizes the conclusions of theplanning matrix. It includes three parts:

Technical priorities (relative importance of each technical requirement) Competitive benchmarks (relative position of the existing product)

Targets (engineering target values to be met by the new product design)