Voice of the Customer (VOC)

I like to call it inexpensive consultancy. Think about the amount of money and time that is put into research and marketing so that a given company is able to truly understand its customers' needs and perception about its product or service. To add to that, sadly enough, a lot of organizations nowadays fail to use the right tool or approach, or even the right resources to listen to what the customer (the one who ultimately pays our salaries and bills) has to say. Voice of the Customer, or VOC, is an important concept within the Lean Six Sigma philosophy for process excellence. By applying VOC, an organization is able to collect valuable feedback from customers on what satisfy, delight, and dissatisfy them. There are many different ways of obtaining such feedback. It can be done through focus groups, mystery shopping, surveys, and formal interviews to name a few. Below, we offer 5 steps to properly implement a successful VOC program.

1. Clearly define your targeted audience. Who are your customers? And who are they now and in the future? Will you introduce a product or service that will be tailored to a completely different kind of customer? What are the demographics related to your targeted audience? If you would like to hear meaningful and insightful answers, ask the right  questions to the right customers.

2. Select the appropriate tools and methods. What tools will you use to collect the data you need? These can be of qualitative nature (for example open-ended questions or binary questionnaires - yes or no, high or low, etc.) or quantitative nature (such as tally count on defects through reports submitted by customers).

3. Improve. Use the results collected for continuous improvement. There is no point in collecting data from customers that cannot be translated into valuable information. Use the reports, surveys, and any other piece of data you have gathered to better your products and services, and showcase to your customers that you care about what they have to say.

4. Continue to ask. The beauty behind the VOC approach is twofold: firstly, customers usually like to provide feedback. Secondly, you are using a rather inexpensive (and reliable) way of doing so - it is inexpensive consultancy! The best feedback a company can get is the one from people who actually use the product. It is the user who knows if the product or service actually works, not the designer, not the operations manager, not the decision maker who decided to procure the product or service.

5. Develop an action plan. As per anything related to the PDCA cycle, such as the implementation of a VOC program, write down names, dates, and expected outcomes for everyone involved with the effort. Check the results of ongoing and new actions and hold people accountable for the implementation of initiatives that will sustain the program in the long run.

eZsigma Group is Canada's leader in training, mentoring, and certification in Lean Six Sigma, strategic management, and process excellence. Contact us to learn more about how we can make your organization an Excellence-focused one.

Balanced Scorecard (BSC)

We are very excited to announce that our Strategic Management program has now been officially launched. eZSigma is now offering two streams of work within the Strategic Management program: consulting and training. More information can be found on our website (see link on the right hand side). We would like to take advantage of this opportunity to address the methodology behind our new offering: Balanced Scorecard (BSC). Although it is nearly impossible to touch on all aspects of BSC in one post, we hereby address the main idea behind this powerful approach to managing organizations. The BSC methodology was created in the early 90's by two Harvard professors - Norton and Kaplan. The main idea behind the BSC is that a firm should not only be concerned about its financial achievements but rather, it should seek excellence in other areas that will ultimately support the company in achieving its financial performance. The approach did break a paradigm in a sense that it supports the concept that no longer a firm would be focused on and concerned about its financial performance only. The methodology calls for a few critical points:

1. The translation of the strategic mandate into operational metrics

2. The alignment between operational metrics and the company's strategic objectives

3. The causal relationship among the four perspectives (briefly described below)

4. The spread of accountability and autonomy to all employees ("everyone's job")

The BSC method is built upon four perspectives: financial, customers, internal processes, and learning and growth. There are variations of these perspectives, mainly in the wording, but these four are easily found in any BSC development in any industry. The four perspective are:

Financial: Norton and Kaplan do not disagree that firms can only move forward and reinvest in themselves through monetary funds. But financial performance can only happen with  satisfied customers. For not-for-profits, revenues are still important for the organization's further development and the BSC approach can also be applied.

Customers: simply put, no company can survive without customers, and no company can thrive without satisfied customers. The BSC approach calls for attention when it comes to keeping your customers happy. In turn, these customers will continue to do business with the company and provide it with earnings longevity. As a side note, depending on the type of company and industry, the BSC practitioner can be dealing with internal and/or external customers (the next step in a process or the final consumer).

Internal processes: no customers can be satisfied through processes that lack quality in them. Pursuing excellence in any internal process - be it in a manufacturing setting or at a service organization, is the key to customer satisfaction. The previous post on cost of quality touched on the various ways that the lack of excellence in processes can contribute to customers' dissatisfaction.

Learning and growth: companies are made out of people. Processes and products, even those that are highly automated demand people to control and operate them. Engaged, well trained, and committed employees are the foundation of the firm's ultimate success. Think about the best products available on the market today. They were designed by people, they were created by people, they were advertised by people's minds.

The visual aid used in the BSC approach is the Strategy Map which we will address in another post eventually. We hope that this post has given the readers a glimpse of what this powerful approach can do in any organizational setting. As usual, we are available to discuss how this and other eZSigma's programs can transform your organization in a excellence-driven one.

Cost of Quality

How does one put a dollar figure to quality-related activities? In this post, we address the main areas of concern when it comes to financially measuring quality (or the lack of). Cost of quality refers to the costs of not producing a quality product or service. It is an important measure that showcases how much, dollar-wise, a firm is spending on activities that need to be performed in order for the product or service be of an acceptable quality. With a bit of variation in the literature on cost of quality, the main four areas of concern, and  the areas in which you can build a case for justifying doing things right the first time, are:

Prevention costs: what are the costs related to avoiding an issue with a product or service? Consider quality planing, training, preliminary process evaluation, management systems development, product design inspection (or verification), and so on. These are the costs a company must address even before it starts to produce a good or deliver a service.

Appraisal costs: calibrating, auditing, acceptance-testing, inspecting, and any other cost associated with the checking phase of a product or service development. Companies that are TQM-oriented usually educate employees to be a constant checker, however there are still clearly identifiable appraisal costs in any organizational setting.

Internal failure: these costs include scraping, reworking, downgrading, down-valuing, and material-reviewing to name a few. This is perhaps the most easily and visually identifiable costs of any process. It is important to mention that for the service industry, these can also be related to data loss, disruption in service, and errors in processing orders.

External failure: the costs that any organization want to avoid at all costs (no pun intended). Not only this is about cash outflow but it also refers to issues in which a company does not want to have. Warranty issues, product recall, defects, returns, complaints management, and the one we should be most concerned about: the loss of reputation.

Be mindful that sometimes certain costs (such as prevention costs) may deliver a reasonable benefit after all. Perhaps it is there that quality practitioners should be more focused on, in order for the product's or service's other costs be minimal. Evaluating the right costs is an important piece of any quality or process improvement engagement. eZSigma can help your organization in successfully achieving this milestone.

3 Steps for a Successful 5S Program

Seiri, Seiton, Seiso, Seiketsu, and Shitsuke. The 5S program is not new. It has been around for at least 30 years, and it has helped organizations of all sizes in developing a better and safer workplace for employees of any industry. But 5S cannot be just another flavour of the month. The easiest steps of the program (the first 3 Ss) are a lot of fun to execute. They have a visual appeal and instantly deliver change in the workplace. Indeed, the hardest part is the organization's mind changing that will set the workplace ready for the program's longevity. In this post, we offer our audience three steps to make your 5S program last. To learn more about 5S, please visit the links provided below. You can also find dozens of books written about 5S for sale.

1. Establishing ownership: an orphan 5S program is nothing else than political compliance or simply stated, waste of time and money. Large corporations usually pick "champions" or "owners" to be the sponsors of the program, from training to execution. Small- and mid-size companies usually have their owners as the main sponsor. Whoever the organization chooses to be in charge, it is vital that someone is in fact in charge. It is equally important that this someone truly believes that the program will make the organization a safer, more productive, and better workplace - the old "walk the talk" adage.

2. Education: we have seen, in many occasions, a 5S program going down the drain because of lack of education. And we really mean education, not training. Employees need to comprehend why the program is about to be in place, and how the program will change their lives at work. Often, 5S is delivered as a housekeeping program, and a housekeeping program 5S is not. The main idea is to improve the well being of all, not only employees but also customers, vendors, and even the community around your business. The program per se includes housekeeping, but it is far from being it only.

3. Allocating a budget (or not): have no fear, in most cases, a low 5S budget can still make a huge change in the workplace. Furthermore, if the organization simply wants to contract third parties to rebuild, repaint, or even manage the program, it will not achieve the main idea of ownership and commitment from employees. The best 5S programs we have seen did not require a lot of capital or external contracting to be successful. Employees in most cases, when committed, use their intelligence and creativity rather than the company's funds. Of course, inevitably there will always be those cases in which spending is mandatory, but any company can start the program with zero cash for it.

A well implemented 5S program depends on many variables. These are only a few of them, but if the entrepreneur has these simple 3 steps in mind, s/he is off to a great start. If your organization does not have a 5S educated person, and if it is difficult to educate someone onsite, eZSigma can help you to turn your organization into a pleasant and productive workplace.

Selected links:

http://asq.org/learn-about-quality/lean/overview/five-s-tutorial.html

http://en.wikipedia.org/wiki/5S_(methodology)