iSixSigma

Understand and Quantify the Customer’s View

Businesses provide an indivisible combination of products and services to their customers. The customers’ view of the value the company provides is based on the quality of the combined package of product and service. So how does the quality professional provide management with a tool to benchmark the operation’s performance and monitor the view the customer has of the organization’s ability to satisfy?

The classic business model in the United States calls for the organization to focus on readily quantifiable metrics such as:

  • Dollar sales
  • Unit sales
  • Unit production
  • Scrap
  • Overhead absorption
  • Cash flow
  • Inventory levels
  • Service levels

These business metrics have management’s routine attention, as they should, since they provide the tools necessary to measure achievements and gauge future performance.

The customers’ overall and specific satisfaction is typically monitored intermittently with marketing tools such as customer surveys, focus groups, and other techniques. While these approaches are important and meaningful, they do not provide management with continuous information. A managerial method that can provide a continuous measure of the organization’s performance for the product and service combination and provide a simple managerial benchmark can be developed. I call this method the customer view score (CVS). It also can be used for monitoring, trending, organizational focus, and goal setting.

The basis of the CVS is the CTQ (critical to quality) concept of Six Sigma. CTQ is often applied narrowly in the definition of a customer’s expectations for a product or service. It is the beginning step in the initiation of DMAIC (Define, Measure, Analyze, Improve, Control) or DMADV (Define, Measure, Analyze, Design, Verify) projects. It, however, can be applied more broadly and utilized to focus the organization on the customers’ satisfaction with the company.

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To create the CVS we utilized the CTQ definition to bring together the organizational parameters that best define the customers’ expectations. Working collectively with the management team, the CTQ parameters were selected and the weighting was determined based on our experience of the importance to the customer. In the business model where this was applied we elected the following parameters: Functions, CTQs, count of occurrences, weighting, and an arithmetic score. We kept it simple. See the monthly CVS tabulation worksheet as an example. Of course the method can incorporate any measures that the management team deems appropriate to their business model and can be as simple or complex as necessary to quantify the product and service combination.

Example Customer View Score Monthly Tabulation Sheet
FunctionCTQWeightingCountScore
Customer Service
Calls unansweredNo unanswered callsCount X 256112
Delay in answeringGreater than 30 secondsCount144144
Question not answered, call back requiredNo call backsCount2323
Shipping
Late shipmentsNo late shipmentsCount X 256112
Incorrect item/quantityNo incorrect itemsCount X 248
Incorrect addressNo incorrect addressesCount X 2612
Shipper errorNo errorsCount X 22040
Production/QC
Product defects reportedNo defectsCount X 2112224
Planning/Inventory
BackordersNo backordersCount X 261122
Backorders >2 daysNo backordersCount X 41872
Monthly Customer View Score       869

In our business structure customer service was highly important, and timely deliveries were critical to maintaining the order. The CTQs and value factors indicate that with the highest weighting given to product availability beyond two days. In our highly competitive environment lack of product availability created an opportunity for the customer to source the product from a competitor.

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We tabulated the CVS on a monthly basis and reported trends in conjunction with the financial and departmental reports. Increases in the score (and greater variance from month to month) indicated increasing process defects. In contrast to process Sigma levels, the CVS provided the management team with a quick determination of the organization’s performance.

The CVS method has many positive benefits:

  • It provides a continuous and simple managerial measure of how the customer views the product and service combination the company provides.
  • It can be used as a starting point for the team to initiate DMAIC and DMADV projects.
  • It establishes a simple, common vocabulary and focus within the organization regarding the product and service combined package.
  • It is a semi-quantitative method for combining seemingly disparate departmental measures into a single measure that reflects the customers’ view of the company.

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