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JWI 550 (1208) Page 1 of 9

JWI 550: Operational Excellence

Week Nine Lecture Notes

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JWI 550 (1208) Page 2 of 9

CUSTOMER-FOCUSED DESIGN

What It Means Product and service designs are strategic decisions that impact an organization’s entire value chain and its competitive advantage. Effective designs are the result of the designers’ sensibility and methods matching customers’ needs with what is technologically feasible. Various customer-focused design methodologies, including Design for Six Sigma (DMADV), Quality Function Deployment (QFD), and Design Thinking, are used successfully in many organizations today. They all seek to develop a viable business strategy that can be leveraged to solve operations management problems and create customer value and market opportunity. Why It Matters

• Successful design efforts need a willingness to apply a new lens and take a fresh look – whether you are designing or redesigning a new process, product, or service.

• The right design can drive the success of a product or service and help you win customers.

• Different customer-focused design approaches impact the value chain in different ways.

“Innovation is not necessarily about Eureka; it can be about consistent and regular improvement, but it’s always

about listening to your customer.”

Jack Welch

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JWI 550 (1208) Page 3 of 9

THE CHALLENGE AND OPPORTUNITY FOR MANAGERS

Managers should seize every opportunity to ensure that designs are customer-focused. When we say “customers,” we refer not just to the paying or external customers, but also internal customers (i.e., those within the organization). The good news is that there are various methodologies, tools, and techniques – such as Design Thinking, Design for Six Sigma (DMADV), and Quality Function Deployment (QFD) – to help ensure customer- focused designs. You will learn about these this week. The challenge is for managers to correctly identify opportunities for design projects or redesign projects. If customer needs are not met by anything that your organization offers, then there is probably a business case for a new service, product, or process. If an existing service, product, or process is so broken that it cannot be improved upon, then a redesign is needed. Managers have to select and consciously decide to launch such projects. Managers need to assign the right personnel and resources to cross-functional projects. Design or redesign projects take longer than improvement projects. Depending on the nature of the service, product, or process, such design projects may take weeks, months, or even more than a year. Therefore, these projects should be viewed in the larger strategic context as an investment to gain competitive advantage.

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JWI 550 (1208) Page 4 of 9

YOUR STARTING POINT

1. How good are you at stepping out of your comfort zone and considering new approaches to

solve problems?

2. Can you think of a situation in your business where poor design choices resulted in products or

services that failed to meet customer needs and expectations?

3. What are the “right features” for your product or service? How do you determine this?

4. How important is the Voice of the Customer (VOC) in the design decisions your business makes?

5. Do you look to other sectors and businesses for new ideas?

6. What are three well-designed products or services that you use on a regular basis? What makes them so appealing?

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JWI 550 (1208) Page 5 of 9

THE STRATEGIC DECISION OF PRODUCT DESIGN

More than ten years ago, Nokia – the designer of some of the most robust and well-known wireless phones of the early 21st century – introduced what should have been a tremendous hit: a mobile phone that was also a gaming platform. The result was one of the most epic disasters in the history of design.

It was called the N-gage. It was ugly; many users said it “looked like a taco.” The phone buttons were poorly suited to gaming, and it suffered other design issues. For example, to change games, you actually had to remove the phone’s battery. Nokia subsequently redesigned the N-gage, but the damage was done. The phone was discontinued in 2005, a commercial failure that is frequently cited as one of product design’s most glaring examples of what not to do.

Throughout most of history, design was a process applied to physical objects, from buildings and vehicles to phones and computers. Raymond Loewy designed trains, Frank Lloyd Wright designed houses, Charles Eames designed furniture, Coco Chanel design haute couture, Paul Rand designed logos, and David Kelley designed products, including the mouse for the Apple computer.1

Today, design encompasses not just physical objects, but also intangibles, such as services and the user experience. Design is one of the ten strategic decision areas in operations management. Decisions made in the selection, definition, and design of goods and services have a significant impact on the competitive position of a business entity.

COMPETING ON DIFFERENTIATION, COST LEADERSHIP, AND RESPONSE

For convenience, we will use the term “product” throughout this lesson to refer to both goods and services. In the context of operations management, product design should support the company’s competitive priorities. These priorities may be based on differentiation, cost leadership, or response.

• Differentiation focuses on setting the company’s product or service apart from competitors based on factors other than cost, such as quality.

• Cost leadership means striving to achieve the lowest operational cost possible in order to position your company for competitive advantage.

• Response means operating a business entity in a way that leaves it flexible to respond quickly to changes in customer demand.

For example, Taco Bell has developed and executed a low-cost strategy through product design, offering very low-cost food. The restaurant’s menu changes from time to time, but overall, it offers more or less 1 Tim Brown and Roger Martin, “Design for Action,” Harvard Business Review, September 2015.

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JWI 550 (1208) Page 6 of 9

the same food now as it did several years ago. By contrast, Toyota prides itself on rapid response to changing consumer demand by executing the fastest automobile design in the industry.

THE RIGHT FEATURES, FREE FROM DEFECTS

Product design decisions should result in providing the right features to customers, free from deficiencies. The right features are what customers want and for which they are willing to pay. These features function as planned without defects – a concept derived from the teachings of Dr. Joseph M. Juran. Whether you are selling a Rolls-Royce or a Kia, whether you work for Ritz-Carlton or Motel 6, this definition holds the key to your company’s success.

In a 2015 HBR interview, Indra Nooyi, CEO of PepsiCo, explained that a well-designed product is one you fall in love with. “We had to rethink the entire experience,” she explained, “from conception to what’s on the shelf to the post-product experience.” She went on to add, “In the past, user experience wasn’t part of our lexicon. Focusing on crunch, taste, and everything else now pushes us to rethink shape, packaging, form, and function…We’re forcing the design thinking way back in the supply chain.”2

In order to provide the right features, the ones customers will fall in love with, a business must know what customers want. Previously, you learned about Six Sigma and the design methodology DMADV. One of the first steps in DMADV is to understand the Voice of the Customer. You must also determine the true needs and expectations of your target customers, then translate those needs into the design.

QUALITY FUNCTION DEPLOYMENT (QFD)

A process that is widely used to translate customer needs into a product’s critical to quality CTQ functions and features is Quality Function Deployment (QFD). QFD is a planning tool or process for determining customer requirements. It enables business leaders to translate these attributes into attributes each functional area can understand— and which they can act on.

QFD ensures that the customer has a voice in the design specification of a product. Many design efforts, including DMADV projects, use the planning matrices adapted from QFD. The flow of these design matrices is as follows:

1. Customers to needs 2. Needs to CTQs 3. CTQs to functions needed to satisfy those CTQs 4. Functions to features that enable those functions 5. Features to processes capable of delivering on those features

2 Adi Ignatius, “How Indra Nooyi Turned Design Thinking into Strategy,” Harvard Business Review, September 2015.

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JWI 550 (1208) Page 7 of 9

MANAGEMENT IMPLICATIONS

Product design is a strategic decision. It drives and impacts the entire value chain of the company, including company operations and the business entity’s supply chain. The right design can ensure the success of a product, while the wrong design will surely mean its failure.

Poor design choices lead to poorly designed products. These will not be products that consumers want; they will not be goods and services for which your customers will be willing to pay. To avoid the early or otherwise untimely demise of your company, and to properly position yourself and your business for competitive advantage, you must take proper design into account.

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JWI 550 (1208) Page 8 of 9

SUCCEEDING BEYOND THE COURSE

As you read the materials and participate in class activities, stay focused on the key learning outcomes for the week and how they can be applied to your job.

• Explore the principles and application of Design Thinking Design Thinking uses creative activities to foster collaboration and solve problems in human- centered ways. The 3 core activities of Design Thinking are inspiration, ideation, and implementation. According to Tim Brown and Jocelyn Wyatt, “The design thinking process is best thought of as a system of overlapping spaces rather than a sequence of orderly steps. There are three spaces to keep in mind: inspiration, ideation, and implementation. Think of inspiration as the problem or opportunity that motivates the search for solutions; ideation as the process of generating, developing, and testing ideas; and implementation as the path that leads from the project stage into people’s lives.”3

• Explain how the Voice of the Customer should drive design strategy Design for Six Sigma is a project methodology for the design or redesign of products, services, and processes. Your organization can benefit from this by using the VOC and DMADV – Define, Measure, Analyze, Design, Verify – to ensure that customer needs are understood and translated into the functions and features of the design.

• Describe how Design for Six Sigma implements customer-focused design “Traditionally, designers focused their attention on improving the look and functionality of products…Design thinking incorporates constituent or consumer insights in depth and rapid prototyping, all aimed at getting beyond the assumptions that block effective solutions. Design thinking – inherently optimistic, constructive, and experiential – addresses the needs of the people who will consume a product or service and the infrastructure that enables it. “Businesses are embracing design thinking because it helps them be more innovative, better differentiate their brands, and bring their products and services to market faster. Nonprofits are beginning to use design thinking as well to develop better solutions to social problems. Design thinking crosses the traditional boundaries between public, for-profit, and nonprofit sectors. By working closely with the clients and consumers, design thinking allows high-impact solutions to bubble up from below rather than being imposed from the top.”4

3 Tim Brown and Jocelyn Wyatt, “Design Thinking for Social Innovation,” Stanford Social Innovation Review, Winter 2010. 4 Ibid.

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JWI 550 (1208) Page 9 of 9

ACTION PLAN To apply what I have learned this week in my course to my job, I will …

Action Item(s) Resources and Tools Needed (from this course and in my workplace) Timeline and Milestones Success Metrics

JWI 550: Operational Excellence Assignment 3

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Operations Management Project Part C: Six Sigma Project Charter Due: Sunday, midnight of Week 9 (15% of course grade)

Overview

Six Sigma projects are powerful tools for achieving breakthrough improvements. Improvement projects utilize the DMAIC methodology, while design or re-design projects use the DMADV methodology. Such projects can be undertaken for large or small initiatives. But because they require a fair bit of work in planning and engaging the team, they are usually applied in situations where a significant change effort is likely to lead to an outcome well in excess of the work put into the project. In the first two parts of your Operations Management Course Project, you have: (A) mapped and analyzed the value stream, and (B) organized a Kaizen or Work-Out to address improvement opportunities which do not require rigorous data analysis. Now, you are ready to move forward with one or more projects that leverage the power of Six Sigma’s tools and rigorous data-driven analysis. A project charter is needed for each proposed Six Sigma project. Project charters enable management to understand, evaluate, and approve projects for launch. Instructions Use your work in Part A and Part B of your Course Project, as well as what you have learned so far in this course, to identify a potential Six Sigma project that can benefit the value stream and your organization.

1) List and describe potential Six Sigma project(s) that you would propose to senior management, recommend one project, and justify your selection.

2) Develop a detailed Project Charter for your recommended project. The project charter must include the following:

a. Problem statement b. Goal statement or objectives c. Project scope d. Critical-to-quality requirements, or CTQs, of the processes within the scope of this project e. Key metric Y (or key metrics Y) f. Expected operational and financial benefits of the project g. Milestone dates for each phase of DMAIC (or DMADV) h. Project team (titles of project team leader and members) i. Champion (title of executive or senior manager)

Submission Requirements Your work is to be submitted in Word. Total length should be 3-4 pages. Since this is a charter, put some thought into how best to present the material visually. Use the instructor-provided Project Charter Template as a guide. At an absolute minimum, you should include clear headers and sub-headers. You may also want to call out certain elements, like timelines or key milestones, using graphics, tables, or colors to make the charter visually appealing and easy to read.

JWI 550: Operational Excellence Assignment 3

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RUBRIC: Part C

CRITERIA Unsatisfactory Low Pass Pass High Pass Honors

List potential Six Sigma projects that you would recommend to senior management, and justify your selection

Weight: 25%

No potential Six Sigma projects identified or no justification for selection.

Potential Six Sigma projects identified, but no justification for selection.

Potential Six Sigma projects identified with incomplete or unclear justification for selection.

Potential Six Sigma projects identified with clear justification for selection.

Potential Six Sigma projects identified with clear justification for selection. Provides additional clear connection to specific strategic initiatives in the student’s organization.

Develop a detailed Project Charter for each recommended project. The Project Charter must include the following:

a. Problem statement

b. Goal statement or objectives

c. Project scope

d. Critical-to-quality requirements or CTQs of the processes within the scope of this project

e. Key metric Y (or key metrics Y)

f. Expected operational and financial benefits of the project

g. Milestone dates for each phase of DMAIC (or DMADV)

h. Project team (titles of project team leader and members)

i. Champion (title of executive or senior manager)

Weight: 60%

Missing or inaccurate list of any potential Six Sigma Project Charters.

List of potential Six Sigma projects. Project Charters with bullet points (a) to (f) addressed.

List of potential Six Sigma projects and selection justified. Project Charters complete with all bullet points addressed.

List of potential Six Sigma projects and selection justified. Project Charters complete with all bullet points addressed.

Includes detailed and correct entries in Project Charter.

List of potential Six Sigma projects and selection justified. Project Charters complete with all bullet points addressed.

Includes excellent, detailed entries in project charter.

JWI 550: Operational Excellence Assignment 3

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This course guide is subject to change based on the needs of the class. 550 Assignment 3 (1208) Page 3 of 3

Finished product presents responses and recommendations in a well-organized format that is easy to read and free from grammatical errors

Weight: 15%

Finished product is disorganized and/or difficult to understand and includes significant grammatical errors.

Finished product is free from significant grammatical errors, but it lacks organizational cohesion, making it challenging to read and/or understand the recommendations

Finished product is free from significant grammatical errors and presents responses and recommendations in a satisfactory manner.

Finished product is well-designed and written, with a clear, easy-to- read layout and few grammatical errors.

Finished product is well-designed and written, with a clear, easy-to- read layout and few grammatical errors. Student makes good use of color and/or other design elements to create a visually appealing charter.

Part A VSM Sample