COMBINING QFD AND FMEA TO OPTIMIZE

PERFORMANCE

Sharon K. Johnson
Management ConsultantQuality,
Materials, Environmental
7406 Broken Ridge Drive
Houston, TX 77095

SUMMARY

This paper shows how key aspects of quality function deployment (QFD) and failure mode and effects analysis
(FMEA) can be used in product and service development at a strategic level rather than in traditional engineering
applications. The complementary nature of these two structured techniques lends them to an application of virtual-
development and simulated-testing that positions a company for successes even before design, procurement, manu-
facturing, and delivery ever begins.
QFD is discussed as a management tool for capturing the voice of the customer and translating requirements into
discernible development criteria. Applicable rooms in the house of quality (HOQ) are developed to illustrate the
iterative use of cascading houses. QFD application focuses on strategic and organizational-level issues rather than on
product development. FMEA is also presented in terms of business issues and approaches, specifically in the areas
of interest raised in a QFD study. This is not an in-depth tutorial on the basics of either tool, but a discussion on apply-
ing them to business issues, and is based on existing fundamental knowledge of each.
Used at a management level, QFD can identify strategic and organizational opportunities and plausible means to
realize them without risking any restructuring, actions, or resources. And FMEA, applied accordingly, can test the
proposed means and actions to identify potential failures associated with them. Most importantly, an FMEA will
characterize the causes of potential failures and their consequences, providing a risk-analysis on the considerations
generated from QFD. Performing an FMEA on a QFD is a closed-loop no-risk situation. In both techniques, concepts
and proposed actions are brought to life and tested to failure in a virtual setting. Every opportunity is available to win,
potential failures are identified and prevented, and risk-worthy actions can proceed with confidence for optimized
performance.

KEY WORDS

customer, risk-assessment, strategy

INTRODUCTION

Quality is an increasingly important factor in providing economically viable products and services. Since the
early 1980s, end-use customer requirements have grown stronger, and manufacturers have responded with vigor,
causing even higher expectations and requirements. This cycle has been instrumental in decreasing manufacturing
costs, reducing product variability and cycle times while expanding features and options, and improving product and
business performance to enhance existing standards of living.
Over the last 20 years, quality has taken on diverse definitions ranging from quality control (product-
oriented) to quality assurance (system-oriented) to TQM (also disguised as reengineering). Quality has frequently
compressed and expanded from being everyones (or no ones) job to the job of specialists to the responsibility of top
management to that of an ISO 9000 management representative, and back to everyone. Finally, quality has also dif-

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ferentiated itself into features (attributes and options), performance (meeting specified requirements), and reliability
(performance-over-time). The differentiation of qualitythe breadth and depth of applying quality principles in busi-
nessled to the sharpening of existing quality engineering tools and promoted their development as management
tools for use beyond simply controlling outgoing product and service quality.
Two very powerful quality tools that gained notable practical use during this quality renaissance are quality func-
tion deployment (QFD) and failure mode and effects analysis (FMEA). QFD is a highly structured technique for cap-
turing customer needs and requirements and translating them into design and manufacturing specifications. It
provides for competitive comparison, feasibility, and risk-analysis, among other things. FMEA is also a risk-analy-
sis tool. It is a formal approach for identifying potential failures and their consequences, and the steps to be taken to
protect against them. The common characteristic or usefulness for risk-analysis is a natural paring of QFD and FMEA
as book ends for the creation of products and services (traditional application), but also for posturing business func-
tions and strategic decisions and actions. They are simulation tools for establishing requirements, features, and
options (QFD), and in the expected performance-reliability of them (FMEA). When QFD and FMEA are applied to
processes, equipment, and strategic planning, they offer powerful protection against tangible business-level risks that
go beyond product and service delivery.

QFD
Quality function deployment combines tables, charts, and matrices to construct a house of quality (HOQ) so
named because it resembles a house with several rooms, a floor, and roof, all derived from the tables, charts, and
matrices (see Figure 1). The door into the house starts with room one, the voice of the customer (VOC). The VOC is
the set of specific customer requirements and desires as voiced by the customer. Care must be taken to determine the
accuracy and completeness of spoken information. For example, sometimes customers say they want more healthy
food items on a menu, but continue to order more traditional fried foods. Both verbal input and observed actions are
used to capture the specific and tangible requirements. Focus groups, surveys, and market data are often used to
develop this information.
When these individual requirements are captured, they are categorized into natural groupings of secondary
requirements such as easy to use, ergonomically comfortable, durable, stylish, and so on, perhaps using an affinity
diagram/process. Finally, an overall or primary customer requirement is articulated from the secondary requirements.
While such a primary customer requirement might be as simple as a good quality widget or dependable service,
the components of good quality and dependable have been defined by the customer base in tangible terms that
have importance to them and meaning to the company. Figures 2 and 3 are the VOCs (room 1 in the HOQ) for a prod-
uct and a service, respectively.
Organizing spoken customer requirements into secondary and primary requirements is valuable for a company.
It allows the use of an objective-means approach in meeting them, for it is objectives that companies should attempt

Figure 1. House of quality.

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Figure 2. VOC for a product.

to deliver through their goods and services. It is actually possible to meet all the discrete attributes, and still miss the
objective(s).
Importance ratings for each of the specific requirements would also be captured from customers. This would aid
a company to determine priorities, resource allocation, risk-analysis, and other planning considerations.

Figure 3. VOC for a service.

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Figure 4. VOC for an enterprise.

Capturing the VOC to build a HOQ is not limited to the characteristics of discrete products and services. At a
strategic level, for example, companies can use QFD to determine product line expansion, taking into account oppor-
tunities for product compatibility, integration, upgrading, replacement and disposal, and other long-term issues.
Another example of using QFD for business-management purposes is the determination of distribution structures or
methodologies that consider centralization and decentralization, subcontracting and brokerage, direct sales, and other
elements of customer service and supply-chain management.
Figure 4 shows how a company can structure itself to meet business-oriented customer expectations. These
would be what end-users have come to expect from the company. It also includes what stakeholders of the company
expect of itself and its strategic mission.
Benchmarking or competitive alternatives would be considered for each of the specific requirements. Ideally,
customers rate competitors performance on these requirements as they perceive them. These values would then be
compared to the importance ratings the same customers generated for the same requirements. This allows a company
to evaluate where it stands in light of the competition and with respect to customers requirements, and to react
accordingly. It should be kept in mind that, at an organizational or business level, it is other businesses and organi-
zations, the methods they use, and the results they achieve that is of concern.
A systematic view of the specific individual requirements readies a company to generate design requirements
that are organized and which will address the objectives intended from the individual requirements. This is impor-
tant since there will likely be several primary business aspects to consider, with many of the secondary requirements
common to more than one primary aspect, usually in a synergistic way. The specific (tertiary) requirements, how-
ever, may present contradictions across the business aspects, and even within a single aspect. For example, a proven
manufacturing process under common technology may not be consistent with making products not previously avail-
able under product line expansion. However, common technology appears to be consistent with the notion of
product line expansion. The discipline of structured approaches like QFD and FMEA help to resolve such dilemmas.
Design requirements are the specific actions a company takes to satisfy the VOC. Design requirements provide
the hows to the whats generated from the VOC. (Ultimately, importance ratings, competitive assessment, and
design correlations that recognize synergistic/positive and contradictory/negative relationships are used to determine
priorities, feasibility, and trade-offs). From Figure 1, design requirements are developed in the fifth room in the HOQ.
Rooms 2, 3, and 4 address the importance ratings, complaints, and competitive comparison (not discussed in this
paper).
A systematic diagram is an effective way to determine design requirements. This logically sequences ideas so
that a concept or aspect can be broken down into levels of increasing detail, presenting the ways and means of real-
izing objectives. The objectives are the secondary and primary customer requirements from the VOC. Generally, the
tertiary-level requirements (that original customer information), are avoided in this step because they tend to narrow
creative thinking so that broader opportunities are overlooked.
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Figure 5. Line of thinking.

Design requirements are developed in reverse of how customer requirements are developed. Customer require-
ments use specific point-elements to roll up to higher-level requirements (two levels). Design requirements meet
customer requirements at the higher level(s) and work down to identifiable specifications. The common ground is
the ultimate (primary) and secondary objectives. The greater those objectives focus on function, rather than on
method or other parameter, the greater the opportunity is to meet them, and the broader the range of customer sat-
isfaction expected.
Figure 5 illustrates the line of thinking when using a systematic diagram to determine design requirements from
customer requirements. The whats lead to the hows through an iterative process.
Concurrent engineering, designed experiments, and functional experience, including existing FMEA studies are
sources of information for generating the means to reach the objectives in a means-objective approach. It is desirable
to identify means that have a direct relationship to the objective(s) to facilitate their understanding and adoption. It
is also important not to include means that dont seem to relate to any objective for that may represent nonvalue-
adding efforts and activities. Finally, at least one means for each objective should be provided to ensure that all of
the customer requirements get addressed at this stage.
Figure 6 is a sample of some design requirements for the primary requirement of market leader and the related
secondary requirements. Since this is an example of a strategic business element, the means-objective thinking cycle
should focus on organizational functions, systems, and processes to determine enablers for achieving the stated pri-
mary requirement or objective.
The first-pass design requirements (the means or hows) become the next-level requirements to be met (the new
whats). Typically, each sublevel created results in a new HOQ where the VOC is represented by the means from
the previous level and is the new objective to be met. The process is continued until the lowest level of detail needed
is obtained. The more direct the relationship between the original customer requirements and the first-pass design
requirements, the fewer iterations will usually be needed.
Figure 7 is a schematic of using HOQ routines to evolve from original customer requirements through organi-
zational values and policies, infrastructure, and responsibilities to a task-level where actions can be taken. It is highly
important to recognize internal customers because, except for the initial house, the entire process depends on inter-
nal customer requirements.
In the presented example of market leader, the first-pass design requirements (both levels of all requirements)
are used as primary and secondary customer requirements in the next HOQ. Additional (tertiary) requirements are
not created as part of this demonstration. The second-pass design requirements identify how to deliver each of the
first-pass design requirements so as to meet the top-level design requirements (for example, organizational freedom).
This is illustrated in Figure 8 for the second pass of one of the original design requirements for market leader.
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Figure 6. Design requirements for an enterprise.

It is no accident that the lower-level design requirements for the second pass HOQ seem like they were con-
structed to address the primary and secondary requirements of that house. And, as the other first pass design require-
ments are likewise treated, one can find that many of the other second pass requirements might be common to those
identified in the first treatment. Care must be taken to assure that the ultimate customer requirements (primary and

Figure 7. HOQ routines.

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Figure 8. Second pass HOQ for an enterprise.

secondary objectives) are being served by each of the design requirements identified. It can be easy to let the process
become self-serving.
For simplicity, this example uses a checkmark to define the linkage between the customer requirement and the
design requirement. Normally, a weighting scheme is used to indicate strong, medium, or weak relationships. More
often than not, design requirements will impact several customer requirements (as in this example) at the same time
and in varying degrees. The strength of the defined relationship is used to help prioritize design requirements.
Completing the design requirements for this primary requirement will likely involve subsequent houses, but would
not be expected to descend to product levels.
The roof on the HOQ is where design requirements are co-analyzed to determine areas of synergy (positive cor-
relations) and where trade-offs are required (negative correlations). Developing these correlations will not be treated
in this paper, as the intent here is to develop FMEA around the identified requirements.
After the appropriate number of iterations of the HOQ is completed and the design requirements are known,
those requirements can be tested to determine their impact on the primary and secondary requirements for which they
are intended to meet. Specifically, testing their failure. While the QFD process focuses requirements from a con-
structive viewpoint, the FMEA process takes aim against them, from a destructive viewpoint, as shown in Figure 9.
Depending on the scope of the study (product or business level), the it can have an enormous range. How the
design requirements are articulated, and to the extent they are developed in the QFD, the exact design requirements
may transfer directly to the FMEA for analysis. Otherwise, a further breakdown of those requirements will be needed
to discover the components functionally responsible for meeting the objectives.

Figure 9. Constructive and destructive viewpoints of QFD and FMEA.

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FMEA
Timely use of failure mode and effects analysis can avoid expensive modifications to design elements by iden-
tifying potential failures, and preventing them, or by assessing which risks will or must be taken, and determining
ways to mitigate their consequences. There is as much need and use for FMEA in setting strategic business direction
as there is in its conventional use in product development. FMEA is carried out from the bottom up, starting with the
component level and working up through subsystems/equipment to a complete system, and repeated for the many
systems involved. At a business level, task-oriented actions are the components, tactics and functional areas are the
subsystems, and strategic decisions are the systems. The systems (strategic decisions) and subsystems (tactics) must
be integrated and focused on the long-term health of the enterprise. The components that are put in place need to be
based on their contribution to this structure.
Figure 10 shows an elemental breakdown structure (EBS) of both a product and an enterprise, revealing their
systems, subsystems, and components. The FMEA will determine potential functional failures at the component
level, and how they impact the higher levels.
FMEA should examine performance under extreme conditions, including potential misuse of the system. Typical
misuse of products might include skipping an automobile oil change, overloading a washing machine (who mea-
sures?), or shooting photographic film at the wrong camera speed. Examples of misusing business system elements
might be unbacked investments, using an unqualified workforce, or stretching resources beyond their intent, includ-
ing human resources and skills, equipment run-time or life-time, or repackaging old designs as new ones. Typical
misuse should be anticipated and prepared for in QFD when designing the product, service, or enterprise system, but
it is often during the FMEA that such conditions are recognized.

Figure 10. EBS of a product and an enterprise.

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Figure 11. FMEA worksheet.

While the FMEA will include intended uses and expected misuses of system elements, it is the component fail-
ure that is of interest, as that is the first-line breakdown of higher-level failures such as products or enterprise sys-
tems. The failure of a component has an associated mode (symptom) as well as a cause. A distinction to be made here
is the difference between FMEA and a simple root-cause analysis. Root-cause analysis is typically used to diagnose
failures that have occurred, and to associate specific reasons to them. It is retrolooking. FMEA examines the poten-
tial cause of failures for their effects on the system, and attempts to prevent them. It is a forward-looking approach,
using the failure mode (symptom of a failure) to help assess the risks associated with potential failures as well as

Figure 12. Some of the elements for an enterprise FMEA are completed in the worksheet.
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determine the cause and the ultimate effect on the system. The failure mode in FMEA is the observed condition of
the failed component, not the cause.
Figure 11 is a standard FMEA worksheet heading for capturing the specific failure information for components within
a given subsystem and system relative to the subject of interest. Figure 12 shows some elements for an enterprise FMEA.
The FMEA worksheet for the lap-top computer example can be completed as an exercise in getting familiar with
using this approach, since a tangible product may be easier to analyze than management concepts and business issues
(see Figure 12).
Risk analysis is an important consideration of the FMEA. Information provided on the likelihood of failure
(the expected frequency of a functional failure occurring) and the failure effects (consequences of a failure when
it does occur) is used to characterize risks. The frequency times the consequence is a weighting mechanism to

Figure 13. Partial FMEA of an Enterprise

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compare various component failures in a study. Frequency and consequences are estimated independently, and
then multiplied together. Frequency of failures is extracted from actual data, or other risk-assessment tools may be
used to provide an estimate. Higher likelihoods are weighted higher. Failure effects (consequences) should be
based on the failure of the components function (what happens to the needed function if the component fails)
without regard as to their likelihood. Components whose function or functions are the keystone to the entire sub-
system or system will have the highest weights. Components whose functional failure will simply impede the sys-
tem or its efficiency will have a lower weight.
While all failures are of concern, and all components serve a purpose (or they shouldnt be in the system), they
do not have equal criticality. Different system elements play subordinate and ancillary roles to ordinate and funda-
mental elements. Considerations of criticality include the ability to prevent failures and to mitigate their conse-
quences should they occur. Ability to take action is an important aspect in assigning risk. Back-up systems,
contingency plans, and alternative resources lessen the risk because they affect the consequences of failure (not
because they affect the likelihood of failure).
Looking at the enterprise example from the QFD process (see Figures 6 and 8), relatively high-level design
requirements were generated for one aspect of an enterprises strategic element of market leader. In this example, the
lower-level design requirements of the second-pass HOQ are serving as the components for the FMEA. Figure 13
completes some of FMEA worksheet elements, shown in bold italics. The likelihood and effects of failure are not
offered because they cannot be presumed in generic examples. But once they are determined in actual applications,
they indicate areas of risk, and offer opportunities to enhance the design requirements of the system and operation
under review.

CONCLUSION

QFD can be applied at organizational levels for business-oriented issues to define critical success factors. The
VOC supplies specific requirements (the whats) that generate primary requirements which are used to create design
requirements (the hows). Using QFD at organizational levels makes identifying the customer more of a sensitive
issue than when looking at product levels where the end-user is usually deemed as the customer. When the architec-
ture of a company is under review, company stakeholders need to be defined, and the voice of the end-user may be
minimal.
FMEA is a tool for determining potential failures and related factors. When FMEA is applied to a QFD, weak-
nesses in design requirements are identified, and risks can be intentionally taken or protected. Both QFD and FMEA
can be used in dynamic situations, and should be used iteratively to achieve the highest degree of effectiveness for

Figure 14. Iterating QFD and FMEA to optimize performance.

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the subject of interest. Effectiveness includes near-term and long-term results, and the costs and risks involved in
achieving them. Figure 14 illustrates the iterative use of QFD and FMEA for evolving to high-performance levels.
Arrows indicate action steps.
Both are simulation tools and can be used after implementation for continuous improvement. In doing so, actual
(hard) data should be available to work with to determine customer (external and internal) requirements for QFD and
to quantify failures for FMEA. Used before implementation, they provide the initial risk-analysis needed to make
good decisions, establish elements of an organization, or meet the requirements of sound project planning.