UTILIZING QUALITY FUNCTION DEPLOYMENT TO CONSTRUCT A BALANCED SCORECARD MAP

1

UTILIZING QUALITY FUNCTION

DEPLOYMENT TO CONSTRUCT

A BALANCED SCORECARD MAP

Shuki Dror & Miryam BaradOrt Braude College Karmiel

Tel Aviv University Israel

2

Agenda

Balanced Scorecard Map

Quality Function Deployment (QFD)

QFD Balanced Scorecard Construction Map

Illustrative Example

Conclusions

3

Balanced Scorecard Map

The Balanced Scorecard Map is a strategic

frame with four perspectives:

Financial measures

Customer orientation

Internal business processes

Learning and growth

4

Cause and Effect Relationships

It develops strategic cause and effect

relationships by linking measures of financial

performances to measures on their drivers.

5

Revenue Growth Productivity

Product/Service

Internal Processes

Learning

FinancialPerspective

CustomerPerspective

InternalPerspective

LearningPerspective

6

Guidelines are needed

To construct a balanced scorecard map some

basic guidelines are needed.

7


Product quality design methodology.

The QFD technique was developed in 1972 at

Mitsubishi and during the 80's and the 90’s

has been gradually and successfully adopted

by U.S. and Japanese firms.

8


Extract the customers' needs or desires and

translate them into demands on technical

product characteristics, engineering

parameters and ultimately into production

systems.

9

QFD Modeling Approach

10

House of Quality

11

Example

12

Balanced Scorecard Construction Map

13

Learning type/level Induced Operational Conceptual

Relative weightCustomer Perspective

Relative weight Internal Perspective

MATRIX 5

MATRIX 3

Quality and service performances Internal Processes

MATRIX 2

Product and service technical performances

Input from customers Product quality & service

Time/cost performancesInternal Processes

MATRIX 4

Inputfrom team

MATRIX 1

Customer perspectiveCustomer types and benefits

Internal perspective Efficiency

Input from management Revenue Growth Productivity

Relative weightsCustomer Types

Relative weightInternal Perspective

14




MATRIX 5

MATRIX 3


MATRIX 2




MATRIX 4

Inputfrom team

MATRIX 1 MATRIX 1






15




MATRIX 5

MATRIX 3





MATRIX 4

Inputfrom team

MATRIX 1 MATRIX 1






MATRIX 2

16




MATRIX 5

MATRIX 3





MATRIX 4

Inputfrom team

MATRIX 1 MATRIX 1






MATRIX 2 MATRIX 2

17




MATRIX 5

MATRIX 3 MATRIX 3





MATRIX 4

Inputfrom team

MATRIX 1 MATRIX 1






MATRIX 2 MATRIX 2

18




MATRIX 5

MATRIX 3 MATRIX 3





MATRIX 4

Inputfrom team

MATRIX 1 MATRIX 1






MATRIX 2 MATRIX 2

19




MATRIX 5

MATRIX 3 MATRIX 3





MATRIX 4 MATRIX 4

Inputfrom team

MATRIX 1 MATRIX 1






MATRIX 2 MATRIX 2

20




MATRIX 5

MATRIX 3 MATRIX 3





MATRIX 4 MATRIX 4

Inputfrom team

MATRIX 1 MATRIX 1






MATRIX 2 MATRIX 2

21




MATRIX 5 MATRIX 5

MATRIX 3 MATRIX 3





MATRIX 4 MATRIX 4

Inputfrom team

MATRIX 1 MATRIX 1






MATRIX 2 MATRIX 2

22

Induced Learning

Induced learning is training at the individual

level and developing/enhancing Information

Systems/Technology.

23

Operational & Conceptual Learning

Operational learning and conceptual learning

are viewed here as combinations of

organizational structures and improvement

tools.

Both operational learning and conceptual

learning involve teams.

24

Operational Learning

Operational learning as being achieved by

means of local teams using rather basic tools

such as the seven basic graphical tools or

SPC.

25

Conceptual Learning

Conceptual learning has a wider scope and as

such has to rely on cross functional teams

applying more sophisticated tools such as

enhanced QFD and advanced statistical tools

such as Design of Experiments (DOE).

26

Illustrative Example Illustrative Example

27

Cross Functional Team

Finance Market oriented Information systems Human resource members Industrial engineers R&D representatives

28

Benefits

Customer Perspective

Internal Perspective

Retailers:Service

performance

Users:Product

performance

Managers:Efficiency

Revenue Growth2515

Productivity--53

Importance 10252055

Normalized Importance0.200.450.351

Imp

orta

nce

Matrix 1 - Deployment of the financial perspectiveMatrix 1 - Deployment of the financial perspective

29

Matrix 2 – The House of Quality in simplified form Matrix 2 – The House of Quality in simplified form


Product characteristics(Quality)

Service characteristics

)Time()Flexibility(

variation of Solids

%

Calciumcontent

Fat %

Additives

Life length

Deliverytime

Packagesize variety

Ordermodific

ation

Nutritious431.21.6

Not fatty5251.53.8

Fresh5210.9

Delectable34541.52.7

Consistency 4151.53.8

HandlingCost

43410.8

Cost of Stock

5451.51.5

LowRisk

1451.51.5

Importance 247302658515120

Normalized Importance 0.200.060.250.220.040.070.040.121

Cu

stom

er P

ersp

ecti

ve

Use

rs (

0.45

)

Pro

du

ct p

erfo

rman

ce

Ret

aile

rs (

0.20

)

S

ervi

ce p

erfo

rman

ce

Imp

orta

nce

Sal

es P

oin

t

Wei

ghte

d I

mp

orta

nce

30

Matrix 3 – Deployment of product/service technical characteristicsMatrix 3 – Deployment of product/service technical characteristics

Quality/ service performances of Internal Processes

Design Quality

Process QualityProcessTime

Response

Userreviews(rank)

Range of packaging

size

Process capability

(Scrap rate)

Quality assurance

effort

Manufacturing & transfer

FailuresSupplier lead time

Information /Com

Versatility(Human)

Set up

Ordermodification

1115540.12

Packagesize variety

50.04

Deliverytime

5443330.07

Life length3332310.04

Additives5320.22

Fat% 40.25

Calciumcontent

30.06

Variation of % Solids

4530.20

Importance 3.20.201.781.160.550.520.400.810.810.7310.2

Normalized Importance (NI)

0.310.020.180.110.060.050.040.080.080.071

0.65 *NI 0.200.010.120.070.040.030.030.050.050.050.65

Imp

orta

nce

Fle

xib

ilit

yT

ime

Qu

alit

y

Pro

duct

an

d se

rvic

e te

chn

ical

per

form

ance

s

31

Matrix 4 – Deployment of internal efficiency Matrix 4 – Deployment of internal efficiency

Time/cost performances of Internal Processes

Process CostProcess TimeResponse

Manufacturing & transport

Waste WI P

Manufacturing &

transport

Failures

Supplier lead time

Information /Com

Versatility(Human)

Set up

Flexibility5555

Production (rate)

234334445

Asset utilization

234424444

Cost per unit

5535321223

Importance 51213181410232424143

Normalized Importance (NI)

0.030.080.090.130.100.080.160.170.171

0.35 *NI 0.010.030.030.040.030.030.060.060.060.35

Eff

icie

ncy

(0.

35)

Imp

orta

nce

32

Learning Induced

KnowledgeOperational Knowledge

(Local Teams)

Conceptual Knowledge

(Cross Functional Teams)

Training Informationcapability

Basicseven tools

SPCQFD(Enhanced)

DOE

Set up 440.11

Versatility (Human)53220.11

Information /Com54230.11

Supplier lead time230.06

Failures

414220.06

Manufacturing & transport20.08

WIP40.03

Waste34330.03

Manufacturing & transport10.01

Quality assurance effort5244430.07

Process capability(Scrap rate)

22550.12

Range of packaging size50.01

User reviews(rank)

550.20

Importance 1.471.152.281.311.882.6810.8

Normalized Importance0.140.110.210.120.170.251

Structure Importance 0.250.330.421

Matrix 5 – Deployment of internal process performances Matrix 5 – Deployment of internal process performances In

tern

al P

roce

sses

R

esp

onse

Pro

cess

T

ime

Pro

cess

C

ost

Pro

cess

Q

ual

ity

Des

ign

Q

ual

ity

Imp

orta

nce

33

Conclusions

The QFD matrices ensure that every financial performance defined by the enterprise strategy is linked to a set of performance measures in the relevant domains that may eventually influence its future results.

Through QFD, priorities for improving performance measures in each of the three other domains are determined.

34

Conclusions

The QFD matrices warrant that proposed learning actions are consistent with eventual financial results.

The QFD systematic approach assists in organizing the balanced scorecard thus promoting continuous improvement for achieving strategic goals.

35

E N D

Documents

UTILIZING QUALITY FUNCTION DEPLOYMENT TO CONSTRUCT A BALANCED SCORECARD MAP