The central focus of supply chain management is to create value for the customer. However, how can we create value if we don’t know exactly what the customer wants? The key issue is to understand exactly what it is the customer perceives as value. This is the responsibility of marketing and is not as easy as it sounds.
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Understanding what the customer wants and perceives as value is a complex process. Most customers have a difficult time defining value, but they know it when they see it. For example, although you probably have an opinion as to which cell phone provider provides the highest value it may be difficult for you to define the specific standard of value in precise terms. Also your friends may prefer a different cell phone provider as they have a different opinion regarding what constitutes value.
Voice of the customer (VOC) is the process of capturing customer needs and preferences. Customer needs can be broken into three levels: basic needs, performance needs, and excitement needs. Basic needs are minimum customer expectations that are understood. If these needs are not met the customer would be extremely dissatisfied. For example, brand new rain boots that leak in wet weather would be considered unacceptable. Performance needs differentiate one product from another relative to the prices. An example here may be finding two pairs of rain boots at a comparative price, but one has a skid- proof sole. Excitement needs are normally not known by the customer in advance, but they elicit delight over the product. An example here may be purchasing the boots and finding that there is a free 10-year replacement guarantee for any dissatisfaction. Understanding different types of needs is critical information in designing products and services, and their associated supply chains.
The definition of value depends on the point of view of the customers defining it. In the rain boots example, the definition of value would be different if the customer was a parent buying rain boots for their child versus a fire fighter buying waterproof boots for work. For this reason, VOC begins by dividing customers into their market segments. As we discussed earlier, we can segment customers by their demographic features or how, where, and when they use the product. This marketing information can help focus our attention on critical customer requirements in each market segment. After market segmentation, market research is used to gather information from customers in each segment using a variety of tools, such as interviews and focus groups. This enables marketing to identify key drivers of value in each market segment. Finally, the last step in translating the VOC is to use a tool called quality function deployment (QFD) to translate general customer requirements into specific product characteristics. These steps are shown in Figure 4.5.
QFD is a tool for translating the voice of the customer into specific technical requirements. Customers often speak in everyday language. For example, a product can be described as ‘‘attractive,’’ ‘‘strong,’’ or ‘‘safe.’’ To produce a product the customers actually want, these vague expressions need to be translated into specific technical requirements. This is the role of QFD. QFD is also used to enhance communication between different functions, such as marketing, operations, and engineering.
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Figure 4.6 shows a simplified example of a QFD matrix for a laptop computer bag. This matrix is sometimes called the ‘‘house of quality,’’ as it resembles a picture of a house. The left side of the matrix lists general customer requirements that marketing gathers from customers using tools such as inter- views or focus groups. The customers may say they want the computer bag to be inexpensive, attractive, rugged, and roomy. Along the top of the matrix is a list of specific product characteristics. The main body of the matrix shows how each product characteristic supports the specific customer requirements. For example,
‘‘rugged’’ is supported by material strength and grade. Finally, the ‘‘roof ’’ of the matrix shows the relationship between some of the features. Strength of material and grade go together, whereas more compartments may take away from the bag’s protective strength. The QFD matrix moves the organization from these general customer requirements to specific product characteristics. It can also show where conflict may exist between some of the features and where trade-offs may have to be made.
FIGURE 4.5
Translating the voice of the customer.
Segment market
Identify drivers of customer value per
segment
Translate customer requirements into
product features Uses quality function
deployment (QFD) Uses customer
surveys, interviews, and focus groups
FIGURE 4.6 A simplified QFD matrix
for a laptop case. Material
grade
Protective strength
Dye color
No. of pockets
X X X X
X
Inexpensive Attractive Rugged Roomy
Relationship between product characteristics
Product characteristics Customer
requirements
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