Designing Profitable Products Using

QFD and Kano Model

Saeed Biglarbeigi 2
When competition for new markets and customers increases, the level of customer
satisfaction becomes a key factor for long-term business success. Satisfied
customers often become loyal customers and help to ensure future cash flow. In
their article Zero Defections: Quality Comes to Services (Harvard Business
Review, 1990) F.F. Reichfeld and W.E. Sasser report that a 5 percent increase in
customer loyalty can increase profit by 100 percent due to the fact that satisfied
customers purchase the companys products more often and in greater quantities.
In general, satisfied customers are less price-sensitive and more inclined to spend
more on proven products.
Considering customer satisfaction levels when creating a product is not an easy
process. Many Six Sigma practitioners use the quality function deployment (QFD)
tool to translate the voice of the customer (VOC) into product specifications. QFD
offers a customer-oriented approach, supporting design teams in developing new
products based on an assessment of customer needs. Customer needs are
translated into design attributes, which are then deployed in process and quality
requirements.
Benefits derived from using the QFD tool include:

The creation of work teams that include multiple skills and experiences

The determination of specific work aims

A display of a wide variety of important design information in one place in

a compact form

Reduced overall costs from realizing a reduction in design changes

Reduced production costs by eliminating redundant features and overdesign

What Is QFD?
QFD is composed of four stages:
1. Complete the house of quality (HOQ).

2. Design the product Determine tolerance of each part of the product so

that it satisfies the target value identified from the HOQ.
3. Design the process Determine the necessary production process that
will satisfy tolerances established during product design.
4. Control the process Determine quality standards for the new product
design.
Many companies think QFD is composed of simply the first stage; however, all
stages are important to the successful development of the product. This article
focuses heavily on the first stage because of its importance, but practitioners
should remember that this is not the only part of the approach.

Completing the House of Quality

The house of quality is a diagram used to capture, summarize and display detailed
information (Figure 1).

Figure 1: Areas of House of Quality

Step 1: Customer Requirements and Needs

This section, Room 2 of the HOQ shown in Figure 1, is sometimes completed by
the marketing department because of its relationship with customers, although
other areas of the company with customer touch points also may contribute. The
information contained in this section represents the VOC and is obtained from
various sources such as:

Searching the market for industry standards

Surveying customers

Analyzing customer complaints

The Kano model of customer satisfaction is a useful tool to help determine

attractive or must-be customer requirements. Results from the Kano survey feed
the customer requirements and needs section of the HOQ matrix.
Kano Model of Customer Satisfaction
The Kano model (Kano, 1984) distinguishes between three types of product or
service requirements that influence customer satisfaction (Figure 2):

Must-be requirements These represent the basic criteria for a product

as determined by customers. If these requirements are not present or are
insufficient, customers are extremely dissatisfied. On the other hand, if
these requirements are present or sufficient, they do not bring satisfaction.
In fact, customers see these requirements as prerequisites. For example, if
a restaurant is very clean, it will not bring additional satisfaction to the
customer because cleanliness is regarded as a must-be requirement. If a
restaurant does not meet the minimum requirement for cleanliness,
customers will not go to that restaurant at all. Customers usually do not
explicitly demand must-be requirements.

One-dimensional requirements Customer satisfaction is proportional to

the level of requirements fulfilled. The higher the level of fulfillment, the
higher the customer satisfaction. For example, for a given model of car,
the higher the mileage per gallon, the higher the customer satisfaction. If
the mileage per gallon is under a certain level, customers will be
dissatisfied. We can say that the lower the mileage per gallon, the higher
the dissatisfaction regarding this requirement. In this example, the level of
neutral satisfaction is the industry average for that class of car. Usually,
customers explicitly demand one-dimensional requirements.

Attractive requirements These requirements are key to customer

satisfaction and are considered delighters. The fulfillment of these
requirements brings more than proportional satisfaction, but they do not
bring dissatisfaction if they are not met. For example, if at the end of a
dinner a restaurant gives a complimentary gift to its customers, it will
bring satisfaction. If the gift is not offered, it will not bring dissatisfaction
to customers. Attractive requirements are neither explicitly expressed nor
expected by the customer.

In addition to these types of requirements are neutral and reverse requirements or

characteristics. Neutral characteristics are those whose presence does not bring
satisfaction, but whose absence does not bring dissatisfaction. Examples of neutral

characteristics are those product features that are never or rarely used by the
customer. Reverse characteristics are those whose presence brings dissatisfaction.

Figure 2: Kano Model

Kano Results and the HOQ

An example of designing a pencil is used to illustrate the process of completing
the HOQ. Step 1 for this example is shown below, where results from the Kano
survey are entered into the customer requirements and needs section of the HOQ
(Figure 3).

Figure 3: Customer Needs and Requirements

Step 2: Ranking the Requirements

This step involves asking customers to rate the importance of each requirement
using a numerical ranking (from 1 to 10). The ranking is then entered into the
HOQ as shown (Figure 4).

Figure 4: Ranked Requirements

Step 3: Comparing Competitors

The benefit of this step is viewing situations where a companys product is weaker
than its competitors products as assessed by customers. This step also uncovers
which specific requirements to focus on for improvement. To display this
comparison, A represents the company and X, Y and Z the competitors (Figure 5).

Figure 5: Compared Requirements

Step 4: Transforming Customer Requirements into Design

Engineering Characteristics

This section of the HOQ is typically completed by the product design or

engineering department. This information represents the design elements that
correspond to customer-stated needs. This process transforms customer
requirements into specific characteristics to be designed into the product (Figure
6).

Figure 6: Engineering Characteristics

Step 5: Determining the Relationship Between Customer

Requirements and Engineering Characteristics
Different indicators are used to depict the level of relationship between the
customer requirements and the design requirements. In the example below, the
following indicators are used (Figure 7):

Strong relationship = 9 points (reflected on HOQ as =)

Moderate relationship = 3 points (reflected on HOQ as O)

Weak relationship = 1 point (reflected on HOQ as X)

Figure 7: Ranking Relationship Levels

Step 6: Comparing Competitor Characteristics with Design

Engineering Characteristics
In this step the engineering design characteristics are compared with those of the
competitor products (Figure 8).

Figure 8: Comparing Engineering Characteristics

Step 7: Completing the HOQ Roof

Sometimes two product characteristics have a negative influence on each other.
For example, when one is increased the other is decreased. This is recorded by
placing an X in the roof of the HOQ chart where influence is anticipated (Figure
9).

Figure 9: Expected Negative Influence Marked in HOQ Roof

Step 8: Weighing the Engineering Characteristics

It is important to weigh the characteristics in order to identify the amount of
importance each characteristic has on the level of customer satisfaction desired.
The weight of each characteristic is derived using the following formula (Figure
10):
Wj = sum(Wi x dij), where
Wj = weight of characteristic j, Wi = rate of importance of requirement i
(determined in Step 2) and dij = point of relationship between characteristic j and
requirement i (determined in Step 5).

Figure 10: Weight for Each Characteristic

During this step, certain characteristics are revealed as key components for the
design. These components satisfy a majority of the weighted customer satisfaction
factors. For example, in this pencil case, the time between sharpening and the
amount of lead dust generated are key components.

Step 9: Determining New Target Values for Characteristics

At this point in the completion of the HOQ, it is possible to set new target values
for the product. These values are determined based on the following items (Figure
11):

Relative importance (Step 2)

Ranking of competitors relative to the satisfaction level of customers (Step

3)

Competitor product value (Step 6)

Component influences at the roof of house (Step 7)

Figure 11: Completed House of Quality

The new target values in the last row of the chart provide direction to set a
strategy that matches the best competitor on the most important customer
requirements. To achieve the goal, the design must consider the following
challenges:

Technical difficulty of designing and deploying the new product

Cost of changing to a new design

Negative relationship shown in the roof of the chart indicating potential

difficulty in implementing specific requirements

Using the HOQ Results to Complete QFD

There are several uses of the HOQ results, including improving the process to
gather VOC data, enhancing the design process and assessing competitor data
more thoroughly. However the results are incorporated, they are not completely
successful unless the remaining QFD cycles are also deployed: designing the
product, designing the process and controlling the process.