Quality Function Deployment

Quality Function Deployment (QFD)

An approach that integrates the voice of the
customer into both product and service
development
The purpose is to ensure that customer requirements
are factored into every aspect of the process
Listening to and understanding the customer is the
central feature of QFD
 Competitor-Based

By studying how a competitor operates and its

products and services, many useful ideas can
be generated
 Service Design

Begins with a choice of service strategy, which

determines the nature and focus of the
service, and the target market
Key issues in service design
Degree of variation in service requirements
Degree of customer contact and involvement
 Differences between Service
and Product Design
1. Products are generally tangible, services intangible
2. Services are created and delivered at the same time
3. Services cannot be inventoried
4. Services are highly visible to consumers
5. Some services have low barriers to entry and exit
6. Location is often important to service design, with convenience as
a major factor
7. Service systems range from those with little or no customer
contact to those that have a very high degree of customer contact
8. Demand variability alternately creates waiting lines or idle service
resources
 The Well-Designed Service System

Characteristics
Being consistent with the organization mission
Being user-friendly
Being robust if variability is a factor
Being easy to sustain
Being cost-effective
Having value that is obvious to the customer
Having effective linkages between back- and front-of-the-house
operations
Having a single, unifying theme
Having design features and checks that will ensure service that is
reliable and of high quality
The battle of the big boys
 The Online Megastore
Screenshot [show]
Type Private Type Private Type Public
Industry Internet Traded as NASDAQ: AMZN
Founded 2010
Founded 2007 NASDAQ-100 Component
Headquarter New Delhi, India S&P 500 Component
Founders Sachin Bansal s Founded July 5, 1994; 21 years ago
Binny Bansal Seattle, Washington, U.S.
Area served India [1][2][3]
Headquarters Bangalore, Karnataka, India Headquarte Seattle, Washington, U.S.
Founder(s) Kunal Bahl rs
Area served India
Area served Worldwide
Key people Sachin Bansal Industry Internet Founder(s) Jeff Bezos
Binny Bansal Services E-commerce Industry Internet
Services E-commerce (Online shopping) Services Online shopping, Web
(Online shopping) hosting,Content Distribution,
Employees 5000+ (Taxi booking, Groceries, food
Revenue 2,846 crore FY2014,(US$ 1 billion in delivery)
gross merchandise value 2013-14) Website www.snapdeal.com
Net income US$ -241 million (2014)
# of employees 33,000 (2015) Alexa rank 166 (Aug 2015) Employees 183,100 (July 2015)
Subsidiaries Myntra Slogan Find your dil ki deal! Subsidiaries a2z, A9.com, Amazon Web
Services, Junglee.com,Twitch, Z
Slogan Ab Har Wish Hogi Poori appos
Website amazon.com (original U.S. site)
Website Flipkart.com various national sites
Alexa rank 6 (August 2015)
Slogan Fulfillment by Amazon
 To List in NSE and BSE there are some rules, one such
rule is the companies that wants to get listed must be
profitable. But Flipkart and Snapdeal are not profitable
companies yet. Hence they cannot get listed in
NSE/BSE. But in US it is allowed under NASDAQ.
Because SEBI has not made rules and regulations to
register online stores. So these companies are
registering outside. According to report SEBI is going to
do the work next 7-8 months. And after that these
companies can be listed on NSE and BSE .
 Flipkart started with the strategy of "Direct
Online Retail". But Indian Law does not support
FDI (Foreign Direct Investment) in online retail. So
Flipkart has now shifted to "MarketPlace Model"
which allows third party merchants to sell goods
to consumers through flipkart website.

The leading e - commerce giant AMAZON is using

a mix of both "Direct Online Retail" and
"MarketPlace Model"
Amazon Seller + Seller + Seller + Self Self Self
self self self
Online retailers requirements
Payment Mode Amazon Flipkart Snapdeal
Credit Card Y Y Y
Debit Card Y Y Y
Net Banking Y Y Y
COD Y/N Y Y
EMI Y Y
Wallet Y
Gift Card Y Y
 Customers Voice
Company Book Delivery Price Products Relevancy of Payment Product Product
time range search options quality Tracking
Amazon Siddhartha 13-19 82-241 7 V. High 3 V. High V. High

Operations 7-13 63-6000 20 V. High 3 V. High V. High

Management
Flipkart Siddhartha 10-13 80-1735 85 V. High 7 Above High
average
Operations 8-12 100-13000 30 High 7 Above High
Management average
Snapdeal Siddhartha 13-17 125-399 7 Above 5 High Above
average average
Operations 15-20 110-820 18 Above 5 High Above
Management average average

1: Low; 2: Average; 3: Above Average; 4: High; 5: Very High

 Inter-relationships

Firms requirement

Technology

Partnership

Vision &
Logistics

Mission
Scale

Trust
Customers voice
Low cost 4

Good Quality 4

Fast Delivery 4

Flexible payment 4

Range of products 4

Product Tracking 4

Efficient search 4

Importance of Firms
4 4 4 4 4 4
requirement*
 Firms requirement

Technology

Partnership

Vision &
Logistics

Mission
Scale

Trust
Customers voice
Low cost 4 ++ - - + +

Good Quality 4 + +

Fast Delivery 4 + +

Flexible payment 4 + +

Range of products 4 + + +

Product Tracking 4 + - + +

Efficient search 4 - + ++

Importance of Firms
4 4 4 4 4 4
requirement*
 +
Correlation:
+ ++:Strongly positive
++ + +
+ : Positive
+
- : Negative
+ ++ + + -- :Strongly negative

Firms requirement

Technology

Partnership

Vision &
Logistics

Mission
Scale

Trust
Customers voice
Low cost 4 ++ - - + +

Good Quality 4 + +

Fast Delivery 4 + +

Flexible payment 4 + +

Range of products 4 + + +

Product Tracking 4 + - + +

Efficient search 4 - + ++

Importance of Firms
4 4 4 4 4 4
requirement*
 +
Correlation:
+ ++:Strongly positive
++ + +
+ : Positive
+
- : Negative
+ ++ + + -- :Strongly negative

Firms requirement Respondents

Vision & Mission

perceptions about

Technology

Partnership
Logistics
firms status (1 is

Scale

Trust
low- and 5 is very
high-level)
Customers voice 5 4 3 2 1
Low cost 4 ++ - - + + A F S

Good Quality 4 + + A S F

Fast Delivery 4 + + F A S

Flexible payment 4 + + F S A

Range of products 4 + + + F A S

Product Tracking 4 + - + + A F S

A F S
Efficient search 4 - + ++

*Importance Scale:
High: 5
Importance of Firms
4 4 4 4 4 4 Medium: 3
requirement*
Low: 1
 +
Correlation:
+ ++:Strongly positive
++ + +
+ : Positive
+
- : Negative
+ ++ + + -- :Strongly negative

Firms requirement Respondents

Vision & Mission

perceptions about

Technology

Partnership
Logistics
firms status (1 is

Scale

Trust
low- and 5 is very
high-level)
Customers voice 5 4 3 2 1
Low cost 4 ++ - - + + A F S

Good Quality 4 + + A S F

Fast Delivery 4 + + F A S

Flexible payment 4 + + F S A

Range of products 4 + + + F A S

Product Tracking 4 + - + + A F S

A F S
Efficient search 4 - + ++

Importance of Firms *Importance Scale:

4 4 4 4 4 4
requirement* High: 5
Medium: 3
Target improvement (%) 20 10 15 10 20 5 Low: 1
 +
Correlation:
+ ++:Strongly positive
++ + +
+ : Positive
+
- : Negative
+ ++ + + -- :Strongly negative

Firms requirement Respondents

Vision & Mission

perceptions about

Technology

Partnership
Logistics
firms status (1 is

Scale

Trust
low- and 5 is very
high-level)
Customers voice 5 4 3 2 1
Low cost 4 ++ - - + + A F S

Good Quality 4 + + A S F

Fast Delivery 4 + + F A S

Flexible payment 4 + + F S A

Range of products 4 + + + F A S

Product Tracking 4 + - + + A F S

A F S
Efficient search 4 - + ++

Importance of Firms *Importance Scale:

4 4 4 4 4 4
requirement* High: 5
Medium: 3
Target improvement (%) 20 10 15 10 20 5 Low: 1

5 A A F A F F
Objective measure of 4 F F A F A A
firms 3 S S S S
2 S S
1
 +
Correlation:
+ ++:Strongly positive
++ + +
+ : Positive
+
- : Negative
+ ++ + + -- :Strongly negative

Firms requirement Respondents

Vision & Mission

perceptions about

Technology

Partnership
Logistics
firms status (1 is

Scale

Trust
low- and 5 is very
high-level)
Customers voice 5 4 3 2 1
Low cost 4 ++ - - + + A F S

Good Quality 5 + + A S F

Fast Delivery 4 + + F A S

Flexible payment 4 + + F S A

Range of products 4 + + + F A S

Product Tracking 4 + - + + A F S

A F S
Efficient search 4 - + ++

Importance of Firms *Importance Scale:

4 4 4 4 4 4
requirement* High: 5
Medium: 3
Target improvement (%) 20 10 15 10 20 5 Low: 1

5 A A F A F F
Objective measure of 4 F F A F A A
firms 3 S S S S
2 S S
1
 Q)
Follow Apple Inc. Case to develop HoQ
In particular, use HoQ to compare Laptops of:
Apple
Microsoft
HP
 PGP-18 OM 1 Mid Term Question

4. [10 marks]
Suggest a few operations strategy to IIM Kozhikode admission committee by preparing a
house of quality for the upcoming batch (e.g., PGP 19).
Use the following data to develop your house of quality (each criterion is scored out of 250)

Institute Learning Experience Living Experience Placement Performance Selection Process Future Orientation
IIM, Ahmedabad 229 130 156 177 169
IIM, Calcutta 231 123 148 180 179
FMS, Delhi 208 105 136 173 129
IIM, Kozhikode 209 118 135 160 125
IIM, Indore 225 123 122 159 112

Factors as defined by Business Today magazine:

Learning experience includes: Pedagogy, quality of faculty, innovative teaching, etc.
Living experience includes: Infrastructure, knowledge facility, resource on living etc.
Placement performance includes: Quality of Recruiter and Placement
Selection process: Governance, Intake Quality, etc.
Future orientation: Global Exposure, creating managers for tomorrow, etc.