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Implementing Lean Marketing Systems

Finding the Voice of Customer in Design for Six Sigma Guest was Dr. Kai Yang world- wide known expert in the area of Six Sigma, Design for Six Sigma and Quality for Service. Dr. Yang is an author of five books in these areas.

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Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems Dr. Kai Yang is a Professor in the department of Industrial and Manufacturing, Wayne State University. His areas of expertise include Six Sigma, statistical methods in quality and reliability engineering, lean product development, lean healthcare, and engineering design methodologies. He is a world well known expert in the area of Six Sigma, Design for Six Sigma and quality for service and an author of five books in the areas of Design for Six Sigma, Six Sigma and, multivariate statistical methods. Prof. Yang’s book, Design for Six Sigma: A Roadmap for Product Development is an influential book that provides a framework to integrate both innovation methods, and traditional statistical quality assurance methods into the product development process. Dr Yang also published over 70 research papers. He has been awarded over 40 research contracts from such institutions as US National Science Foundation, US Department of Veteran Affairs, Siemens Corp, General Motors Corporation, Ford Motor Company, Chrysler Corporation and Siemens Corporation. Dr Yang is also a well-known trainer in the area of Six Sigma, lean, he conducted numerous training for many companies, such as Apple Inc and Siemens. Dr. Yang obtained both his MS and PhD degrees from the University of Michigan. Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems Joe Dager: Thanks everyone for joining us. This is Joe Dager, the host of the Business 901 podcast. Participating in the program today is Dr. Kai Yang, a professor in the Department of Industrial and Manufacturing at Wayne State University. He is a well-known expert in the area of Six Sigma, design of Six Sigma, and quality for service and an author of five books in the areas of design for Six Sigma. Dr. Yang, could you tell me about your position and what you do at Wayne State? Kai Yang: I'm a full professor in the department. I have been working with product development for a long time. Since I joined the University, because I'm in Detroit, very soon I started working with automobile companies such as General Motors, Ford and Chrysler. So, first we helped them to do some of the project improving the manufacturing qualities. Then later on, I worked with a quality reliability group and did a lot of projects based on my experience, and also based on the research. I thought about writing some of the books which reflect my experience. In the year 2000, the book publisher asked me to write Design for Six Sigma. The feature of my book is linking the quality methods and the innovation methods and the design methods all together. So, compared to the past quality book, I didn't do problem solving, I didn't do design, I didn't do the QFD. Of course, some of the traditional quality items such as design of experiment, Taguchi method, tolerance of design. So, this is a comprehensive book. After the book was published, very quickly it became number one in this category. Many companies, such as Lockheed Martin, Delphi, GM, they bought a lot of my books as their training material. Also, I helped many company to do the training product development, including some famous companies such as Apple Computer, Siemens. So, I'm really happy with my experience, the feedback I got from my books. I also like the idea of product development. I think it's very important. Recently, we Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems think the reliability quality in auto industry is really important. So, I'm happy to share my experience and my expertise with your guys. Joe Dager: One of the things that struck me very quickly as I was reading you Bio was that you trained and worked with Apple. It was interesting because I think everybody looks at Apple, their blue jean guys, kind of loose and everything. Are they that statistical driven that they use Six Sigma? Kai Yang: Well, I think they don't call their approach Six Sigma because they think GE is inefficient, too complex, very slow. However, recently, they are really interested in learning, implementing some of the quality tools. I did training in quality myself. I did training in brainstorming. I did training for especially design of experiment. And they have done a lot of DOE to improve their quality, improve the appearance of the product. So, they're happy with that. Joe Dager: Six Sigma and even somewhat Design for Six Sigma was a field, Jack Walsh popularized in the early 90's. But recently, I think Six Sigma is getting kind of a rebirth, because of the amount of statistics and things that we're seeing nowadays. Especially with the cashless society, that everything's on a credit card or on the Internet, that there's so many statistics; what statistics to look at and which ones to use. I think very much applies to Six Sigma. Do you believe that Six Sigma is kind of resurfacing again and getting stronger? Kai Yang: Well, I think that might be true, even in service industry. Recently, I have done a lot of work for the health care industry. I find amazingly, in my experience, they Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems have lot of data available in their IT system. They call it medical informatics. However, they are not like manufacturing. They don’t know how their process works. So, we don't even know, for example, a duplicated task. Some people say that three trillion dollars of the US healthcare industry, half of them are waste. I believe that. When you dig in the data and you know that math weighs their process, you really find how the process works. You can do a lot of improvement through that. So, I do think data mining statistics, then linked with industrial engineering Lean, will do a lot of good for all kind of industries. Joe Dager: Most of your books are written based on Six Sigma, Design for Six Sigma, and Design for Six Sigma service. How does Lean play a role in your training methods? Do you use Lean in conjunction with Six Sigma? Kai Yang: If you notice my new edition of my Design for Six Sigma book, I purposely added the Lean operation in general. Also, I'm adding the Lean product development. This is very important. The tradition of Six Sigma statistical mass innovation method is about increasing your value of your product and services by improving quality, by being more creative. But on the other hand, you need to reduce your calls. You need to be more flexible, responsive to market. Reducing the product developing time, increasing efficiency, increasing operation efficiency is so important. Definitely Lean is very, very important. Actually, I share some our experiences. We recently worked with Siemens, and working with their team, we are able to reduce the product developed over time by big margin. They are really happy with it. The Lean and the Six Sigma is complementary; they go together. They are not contradicting each other. I think they work well side by side.

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Implementing Lean Marketing Systems Joe Dager: One of the great strengths of Six Sigma and Design for Six Sigma is the tools of Voice of Customer, Voice of Market, and Capture and Analysis Stage. I really don't know of a better set of tools than Six Sigma in obtaining that information. Why did you choose to write about these? Kai Yang: Well, when I started to write the book on design for Six Sigma--they also had a lot of information, there were a lot of things going on in Voice of Customer, such as Quality Function Deployment, such as getting the Voice of Customer information. But many of these available books and the training do not have a systematic way of obtaining the real customer voice. So, in my recent book, 'Voice of the Customer,' I added in a lot of new--well not really new--but kind of a popular emerging message, such as over-serving the customer in their work environment, in their living environment. Live with the customer's own life to observe a very objective Voice of Customer information. I think Toyota also uses this in some way. The other thing is after you're getting all kinds of information, how to process it, how to get meaningful information so you can guide engineers. For example, a customer may say, 'Well, I want a car which drives fast, which saves gas.' So, this the voice of customer. But you cannot use it to guide your design because the engineer will ask you, 'What do you mean by saving gas? What mileage per gallon?' They want to have some specific numbers as guidance. So, my new book 'Voice of the Customer,' really talks about how to carry out this type of translation. So, I saw my VOC book as an interesting, useful item to the product development. So, I'm happy with it.

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Implementing Lean Marketing Systems Joe Dager: There's a section of product development process in the 'Voice of the Customer' book. One of the things I noticed right away was the concept design process that you talked about. Take a few concepts, select them in detail, and test them and then the iteration of going back through it. That seems a little bit of what I'm seeing in Lean software development these days, is people are talking about testing early and failing early before they go on. When you get into larger companies, you need tools like Six Sigma to be able to interpret that data that comes back from that. Isn't that correct? Kai Yang: Oh yes. Absolutely, in larger companies, the Voice of Customer--first of all, they have a different kind of Voice of Customer. People do not have the same opinions, even for the same product. So, also, they have, for example the product such as cars, they have many different aspects: appearance, drivability, all kinds of things. You really need a good system to process this kind of data. And also, you need coordination. So, one of the experiences which it doesn't do well is throw the information over the wall by marketing people to engineer and design. So even though they say the same thing, they don't have the same interpretation. So finally, the product doesn't reflect what a customer really wants. I think, no matter for large or small companies, how to translate the voice of the customer into your design practice is really important for final success. Joe Dager: How do marketers receive the Six Sigma process? Do they welcome the value of the interpretation, that data that Six Sigma gives them? Or is there a resistance that there's just too many statistics, there's too many tools to use? Kai Yang: That will be a part of the headache if you're trying to implement that. I strongly think we should have, in doing this type of work; we should have a joined team, a Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems multifunctional team of marketing people, design engineers, engineering managers, because the people need to talk to each other to really know what they are doing. If the engineer knows the marketing people, what they do, the interface with real customers, they will know things a lot better. Also the marketing people, they will know what headache, what's the problem facing the engineer, what's easy to do, what's not easy to do. They are also more able to provide useful information for engineers. The desirable approach would be a multifunctional team working together. That will overcome a lot of problems like that. Joe Dager: You touched upon the Blue Ocean Strategy. Do you use that type of strategy in a design for Six Sigma process? Is that a strategy that is really doable? Kai Yang: For a design for Six Sigma, we talk about a few aspects of design. First is how to design a product that really adds value to your company. I have to say, Apple did a good job on it. They launched a sequence of products that people didn't see before. It really opened people's eyes. Oh, you can do something like that. That's really feasible. They created a marketing niche that has very low competition. So, this is the concept of Blue Ocean. It's not a crowded sea. You have too many fish boats to catch too little fish. This is a big ocean with nobody competing because you offer something unique. And this is a part of innovation, part of the things that as a design team, as a product developer, it's your dream to come up with. In traditional Six Sigma, they don't bring these things into the picture, but I think Apple is an excellent example of success in this category. Joe Dager: I think you're so right there. Looking through your books, I think I can say this; your books aren't for the light-hearted reader. There's a lot of depth to them. You've Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems to want to take hold of the subject. I found myself reading certain sections of it, especially when I into customer survey design, and picking certain parts out of it. Things that I thought really need to be considered. I guess large companies have the staff to do and are able to do it. But small companies have to compete in the world of handling this data now. Do you think they can apply some of these things that you talk about in your book? Kai Yang: I remember, for example, the survey design. I remember one example very well. One day I was invited into China to give some lectures and afterwards went to this restaurant. After eating all the food, they gave me a survey form. So basically the survey form had three questions. Do you like the food, yes or no? Do you like the service, yes or no? Do you like the price, yes or no? Something like that. Then very quickly, I fill in the survey form. But when I think at heart, whether the management can really use this customer survey to improve their business? If I say, 'Well your food is not good. Your service is not good.' Then they know they have an unhappy customer. But there's no way they know why your service is not good, why your food is not good. It doesn't really serve their purpose. In the book we talk about the Ethnographic methods. In this method, the real analogy, you don't need a lot of data. You can put some chef, these kinds as a customer, mingle with customers, then observe how they eat. What things they pick, what things they don't pick. Then you know what type of food they like, how you can improve. Also, you know what type of service. Is it the speed, is it the friendliness they like, what kind of thing they don't like. So, by adopting the philosophy, not a complex methodology, you can make a big difference. Even for small businesses, they don't need rocket science to use these methods. That's the interesting example I always serve. Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems Joe Dager: I think you're right. However, I also look at the fact that here I am with a flood of data, just looking at how to use, let's say, I send an email out. I look open rates and I look at click-through rates and different things like that on the Internet. Or on my website, I look at where they're clicking. I look the different data there. But it's hard to distinguish some of that and derive value from there when you're a small business, to be able to have that expertise or to be able to apply even Six Sigma concepts, let's say, without a trained Six Sigma person, or a black belt or a consultant that you're using. Can it really apply to small business? Kai Yang: Well, I think you have to apply intelligently, selectively in small businesses. So, for small businesses, you have the same type of challenges such as cost, value, efficiency, quality, and so on and so forth. So, you don't have to use some of the very complex tools as Apple, as in GM, as in Siemens. However, the basic principle, basic philosophy does apply. So, in terms of selecting the tool sets, small companies, in my experience, like Lean operation. Like 5S Lean operation will do a lot. You can really help a lot. Also, PDCA cycles give self-directed teams, standard operating procedures. Some of the simple data analysis like line charts, like histograms, just like a TQC. It will really go a long way to serve your purpose. So, I think the same challenge really exists, but you have to apply selectively, intelligently. That is based on my experience. Joe Dager: I also noticed in your product development process that you spend quite a bit of time talking about TRIZ. Do you think that is a real important process? Kai Yang: Well, TRIZ basically is a way to try to improve the creativity of your product development process. Supposedly the TRIZ is you try to condense the inventive principle Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems to a small number of principles. People learn, they can really improve their creativity by learning existing knowledge. Some of the companies are very, very successful at it, as far as I know. Samsung is now is a leading company in electronics. Even now, they still contract TRIZ experts in large numbers working for a couple of years in their headquarters to help them to improve product development. For Samsung it's definitely a useful tool. It's increased their competitiveness. I think that now you hear about more Samsung than Sony Company. So I talk to their product development, some top people. They think that TRIZ really helped them a lot. However, now that every company has the same experience, some use TRIZ and don't get out a lot. I think this is a tool we need to customize to your own practice. So, it can do wonders, it just needs to be applied correctly. Joe Dager: I think you're probably right there, because I always found TRIZ kind of cumbersome. Yet, I'm thinking what you're saying is that you customize it and maybe one company will only use a third of it, or half of it, or something like that. Kai Yang: I'm thinking about a few things important in TRIZ. One is simplify, customize. The other is you have to go with good information searching the IP. So, for example, when people apply TRIZ, one of the common problems they face is, 'Well I can plug in what the contradiction is, what the problem is. I can find out what principle may be useful for me. But, still, this principle is a general principle. I'm still not able to figure out a particular solution for my design problem.' So, that is one of the common things. I found out if people are given relevant information about similar patents, how the people designing similar products resolve this type of problem, if they're flooded with good examples. They are able to take it. I think that is also one of the reasons Samsung did well Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems in using TRIZ. Only learning it does not make it work. You have to flood it with good information. Joe Dager: Lean seems so easy to start. Six Sigma seems like a bigger roadblock to get started, get it over the hurdle. Can you explain why you think the Lean approach is so popular now? I think its ease of entry more than anything else. But to sustain it and to create it, do you think Six Sigma needs to support it in some way? How do you look at that? Kai Yang: Well, I think Lean is a great principle, philosophy and methodology all together, because it addresses some of the common problems of waste, waste everywhere, in all kinds of businesses and processes, in service, in product development, in manufacturing, especially in service. Also the advantage of Lean is the philosophies are so straightforward. You can understand it without a whole lot of background. This is really good and also applicable. You can apply it to big, small and all kinds of company in between. So, this is good. It has achieved great success in recent years. However, they also have some abuse of Lean. In my experience for example, we involve to apply Lean and the Six Sigma in the health care industry. What we find out is the Lean coach is everywhere. They just pick, for example, they say, 'Well, I want to reduce waiting time for patients.' Then they just collect five or six pieces of data so, oh, now waiting time is 40 minutes. Then, after doing something after a few days, then they just pick up three or four numbers. Oh, I reduce waiting time to 20 minutes. But actually, these two or three incidents are only exceptions; it's not really in the long term Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems how the waiting time is going to be. If you collect more data, you'll find that actually that your waiting time is about the same as before. This really tells you one thing: you need some powerful principle of Lean. But others, you need some scientific-based approach, not the cheap shots. So, I think Six Sigma and Lean go together. I agree, we don't need some of those very complex statistical methods. They have a very low usage of frequency. Some common sense, make decisions based on facts, make decisions based on what the data tell you. This is still very helpful in that. Like in Toyota, Toyota is a very well organized company, even though they have some problems. But they really plan everything in detail. For example, even when people, change jobs. When you start from one type of production process to the next type of production process, they have a specific approach called, 'Change Point Management.' How do you deal with--even before, you have a process you already know. Now you are going to new process. So, how do you make the transition really well? They call it 'Change Point Process.' It's very disciplined. We think we need a good philosophy. We need a disciplined approach. We need a fact based approach. No matter what we do, we should stick to this. Joe Dager: When we talk about Design for Six Sigma, what does the Six mean anymore in Six Sigma? Kai Yang: Well, the original intent of Six Sigma means you have such a low quality problem. You have such a low defective rate. Then you virtually shouldn't worry about defects. Six Sigma translates into three defects, 2.7 defects to be precise. Three defects Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems per million occurrences. I think even now it is very important, because we have public media. Like if we are counting how many Toyota cars have sudden acceleration, the ratio is very low. But they have millions of millions of cars. People are buying, people are owning, people are using. We have like 50, 60 incidents of sudden acceleration. If you divide that number, it's almost like Six Sigma quality, even though that's a bad problem. Actually before, Ford had a similar problem, of a tire problem. The defect was also very low. But when that became an issue with the public media, it became a disaster for the company. So, keeping high quality with a very low defect ratio is really what Six Sigma means. You can call it whatever you want, but high quality, high reliability--that's really what Six Sigma means. Joe Dager: Is there anything you would like to add to this conversation that I maybe forgot to ask? Kai Yang: I think people--to apply Lean and Six Sigma, really need to understand their problem. You need to use the right tool, right methodology, right philosophy for the right problem. In my book, for example, this book is not an easy book, very in-depth. Another thing designed for a company which has very sophisticated product, sophisticated product development process. Some of my other books, such as 'Design Six Sigma for Surveys,' such as 'Voice of Customer,' have some tools and methodology for smaller companies, for service companies. The really important thing is you've got to choose the right thing for your reality. I think if you do that right, nothing will be wrong. That's my addition to our conversation. Finding the Voice of Customer in Design for Six Sigma Copyright Business901


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Implementing Lean Marketing Systems Joe Dager: Well, I'd like to thank you very much, Dr. Yang. This podcast will be available in the Business 901 iTunes store, and also on my blog site. So, again, thank you very much. Kai Yang: Thank you. My pleasure. Amazon Book Links: Design for Six Sigma Design for Six Sigma for Service Voice of the Customer: Capture and Analysis (Six Sigma Operational Methods Multivariate Statistical Methods in Quality Management

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Implementing Lean Marketing Systems Joseph T. Dager Lean Six Sigma Black Belt Ph: 260-438-0411 Fax: 260-818-2022 Email: jtdager@business901.com Web/Blog: http://www.business901.com Twitter: @business901 What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joe's ability to combine his expertise with "out of the box" thinking is unsurpassed. He has always delivered quickly, cost effectively and with ingenuity. A brilliant mind that is always a pleasure to work with." James R. Joe Dager is President of Business901, a progressive company providing direction in areas such as Lean Marketing, Product Marketing, Product Launches and Re-Launches. As a Lean Six Sigma Black Belt, Business901 provides and implements marketing, project and performance planning methodologies in small businesses. The simplicity of a single flexible model will create clarity for your staff and as a result better execution. My goal is to allow you spend your time on the need versus the plan. An example of how we may work: Business901 could start with a consulting style utilizing an individual from your organization or a virtual assistance that is well versed in our principles. We have capabilities to plug virtually any marketing function into your process immediately. As proficiencies develop, Business901 moves into a coach’s role supporting the process as needed. The goal of implementing a system is that the processes will become a habit and not an event.

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