from the voice of the customer to the function-oriented product … · · 2014-11-09done very...

© Schöler & Partner – Consultants for Product and Management 1

From the Voice of the Customer to the

Function-oriented Product Concept

The Value Management Concept in Product Development

Dipl.-Ing. HORST R. SCHOELER Schoeler + Partner, Eggenstein, Germany www.schoeler.com Summery

Successful products are developed by following a specific transfer and

communication process during the development process. This process is assisted

by different methodologies, to be successful in transferring the voice of the

customer to a function-oriented product structure as basis for a customer oriented

product design.

Before entering the design process of concepts, components and parts this

function structure must be established. It is like a model for the future product, in

function expressions and attributes, without giving any solutions.

This paper will describe the way from customer requirements to a product

concept described by a functional product structure as the basis for creativity and

technical product design.

The presented procedure avoids that product development teams jump to fast in

technical solutions thinking before the voice of the customer is heard and understood

and price/cost questions are answered and solved.

The value management methodology delivers the main principles of this

systematic approach.

1. Introduction

In product development the product definition is the most important step. This has to be

done very early in the product planning phase. Having an idea is the starting point, to

transfer the idea to a product concept and further in the product design are the next

necessary steps to introduce a product successfully in the market.

From the Voice of the Customer to the Function-oriented Product Concept

Schöler & Partner – Unternehmensberatung für Produkt & Management

2

The backbone of a successful product is the voice of the customer. If the

company does a poor job during this planning phase, problems will be existing

throughout the rest of the product live cycle, including poor design,

overengineering, value mismatch, high costs, etc.

It is important to have a sure grip on customer requirements and master the

methods to define customer-oriented functions in accordance with requirements

from customers.

When we look at the product development process (Fig.1) we will see different

phases. The quality of a product will be set in the planning phase.

Before embarking into technical development, the future product to be developed

must be defined as well as possible in functions to satisfy the market need.

Also the allowable cost for these functions must be set and broken down from the

product target cost, to establish a budget goal for every function.

This Value Management approach helps to be successful in defining a customer-

oriented product concept.

2. The Value Management Approach

To follow the logical product development process, we have to describe the

future product concept out of two views. At first in the view of the customer

(market) and than we have to transfer this view into the view of the

manufacturer and the engineers, who design the product.

We also can say that there are two voices which must be in balance, the voice of

the customer and the voice of the company.

Before starting any product development and commercialisation process, there

are two questions that must be answered:

§ What are we trying to do for the customer ?

§ What are we trying to do for the company ?

These views are shown as two triplets (Fig 2).



3

The development team has to achieve the right balance between the benefits,

needs and wants1 of the customer and the right price of a product in the market.

This means a good understanding of the customer, their needs and wants on the

tangible and intangible side, the existing competition and their products and the

right pricing:

Value for Customer:

To design the product concept the customer needs and expectations have to be

translated into appropriate product requirements, in functions.

When we translate the customer focused value in internal company value terms

we get a company related value VM:

This translation from the customer orientated value to the company orientated

value is necessary, because the designer, manufacturer and other in-house people

must understand what the customer means and thinks, expressed in company

own words.

The transformation of the customer requirements into functions is the basic

process to describe the future product without limiting the creativity during the

planning phase.

1 understand the 3 types of customer requirements > KANO model (see Fig. 3)

Satisfaction of needs and wants

VC = Price + Life-cycle cost

functions + specifications, constraints

VM = costs



4

These design process steps are summarised as follows (Fig.4):

§ The design process transforms customer requirements into product purposes

or goals, in functions

§ these functions and their description identifies the product purposes on a

functional basis

§ this function structure is the basis for the creative process to develop concepts

and solutions.

This concept incorporates different methods and approaches.

The key methods are:

§ Quality Function Deployment

§ Value Analysis / Value Engineering

§ Target Pricing / Target Costing

3. Tools and Methods

3.1 Quality Function Deployment

The product design process begins with a solid understanding of the customer

requirements or demands. Quality Function Deployment is a methodology to

close the gap between marketing and design.

It is improving the

§ communication

§ co-operation

between these two main involved parties during the product planning phase.

Quality Function Deployment, especially the House of Quality (Fig. 5) helps to

define and structure in a logically process:

§ who is my customer, what are the customer requirements ?

§ how important are the customer requirements

§ what are the characteristic values of competitive products or technologies ?

§ what are the quality and design characteristics and attributes to achieve the

customer requirements ?



5

§ what are the ranking and the importance of the quality and design

characteristics ?

§ what design target quantification of the design characteristics have to be

achieved and

§ what are the possible conflicts during the design stage between the design

characteristics ?

3.2 Value Engineering

After collection and identification of customer requirements, the product

definition must focus on function rather on physical or other characteristics.

Function analysis analyses the necessary functions of the future product on the

basis of customer requirements. Functional analysis is the language of the

engineer and the basis of design, before developing concepts. So all customer

requirements have to be translated into the functional language (Fig. 6)

The functional structure gives answers to following questions:

§ What functions have to be designed ?

§ What is the quantification and feature of the function ?

§ What functions have what importance ?

§ What functions are for use, and what functions are for aesthetic purposes ?

3.3 Target Pricing/ Target Costing

To achieve the target price the allowable function cost must be defined (Fig. 7).

Following steps are necessary:

§ Define the target price for the new product

Before technical product design starts it is necessary to establish a functional product structure as a model for the future product. This model shows the functional product concept with all quantification and is the basis for further creativity and design solutions.



6

§ Derive from the target price the allowable cost. Allowable cost identifies the

cost at which the product must be manufactured if it is to generate its target

profit margin.

§ Break down the allowable cost to each single function, what has to be

achieved .

To determine the specific function cost different approaches and methods are

available:

− methods that take the manufacturers perspective in determination achievable

minimum costs and

− methods that take the user’s (customer’s) perspective in determining target

costs based on the relative importance of each function ( what is the customer

prepared to pay for the specific function ?)

4. Summary

The 3 tools help in the product planning phase to establish a functional product

structure (Fig. 8).

The functional product structure is important for:

§ the functional product structure opens the minds for new approaches and

technologies,

§ functionality is especially important when one attempts to differentiate a new

product from prior art ( additional functions ?)

§ Functional thinking and structuring is also very useful in developing

modularity and product platforms.

Due to the teamwork during using the tools to find a mutual accepted functional

product structure, the communication between market and technology oriented

people in the company improved and the voice of the customer was transferred to

the product design phase.



7

Advantages for the design process

§ Functions are derived from the customer requirements and wants and

understood by the designer

§ Functions importance is known and management can concentrate the

resources on the important ones

§ Functions are quantified, targets are set

§ Function cost for the future product are known and communicated, cost

budgets are established for each single function

The functional product structure is the basis for creativity and systematic idea

generation to develop different solutions and approaches.

Given functions, functional objectives (quantification of characteristics and

conflict knowledge), analysed limitations and directions created by competitor

products gives the engineering team the possibility to design a market oriented

product without any bigger changes later (do it right the first time).

Advantages for the company

Product development activities underlay high risk and uncertainty. Therefore it is

necessary to front-load the early activities in the product planning phase.

Further advantages in practical product development are:

§ lead time reduction

§ less development cost

§ less changes during the design process

§ a designed product, which fulfil the customer expectations and wants.



8

5. Appendix

Figures

Figure 1: Product Development Process

Figure 2: From Customer Requirements to the Product Concept

Figure 3: KANO-Model

Figure 4: Customer Requirements and Function Tree Structure

Figure 5: House of Quality

Figure 6: Functional Analysis Approach

Figure 7: Target Costing Process

Figure 8: From Customer Requirements to Product Function Structure

Figure 9: Example for a Function Product Structure Process



9

© Schoeler + Partner - Consultants for Product + ManagementOrg/Port/VM 2001

Product Development Phases

Figure: 1

Product Planning Phase

Product Realisation Phase § Design § Testing § Manufacturing

Product Life-Cycle in the Market

Market Feedback

Project Management - Project Controlling

© Schoeler + Partner - Consultants for Product + ManagementOrg/Port/VM2001

From Customer to Product Concept

Price + LCC

Delivery Benefit

Customer Requirements

Manufacturer ViewCustomer View

Cost

FunctionalityFunction

Time

Figure: 2



10

Org/Port/Kano/VM2001

KANO-Model

© Schoeler + Partner - Consultants for Product + Management

Basic CR• expected• not spoken• often no more aware

Performance CR• spoken• quantified• aware

Exciting CR• not spoken• not known• surprised, unexpected

ActualPerformance

Customer Satisfaction

bad achievedfully achieved

Very dissatisfied

Time

Very satisfied

Figure: 3

© Schoeler + Partner - Consultants for Produkt + ManagementOrg/Port/VM2001

Design StepsFrom customer requirements to the

functional product structure



Basic

Performance

Excitement

Customer satisfaction class (KANO)

Functions +Quantificationdata + cost

Use

Aesthetic

Data, EUR

Data, EUR

Use

Aesthetic

Figure: 4



11

© Schoeler + Partner - Consultants of Product + ManagementOrg/Port/VM 2001/HoQ

House of Quality

Conflicts 9

Correlations between CR and Design Characteristics

5

Customer Requirements CR 1

Market Competitor Analysis

3

Targets of DC 8

Technical Competitve Analysis 7

Design 4 Characteristics DC

Direction of Optimization 9

Importance of CR

2

Market Segment Customer Group

Importance of DC 6

CR = Customer requirements

DC = Design characteristics

Figure: 5

© Schoeler + Partner - Consultants for Product + ManagementOrg/Port/VM 2001/FA

Function Analysis Approach

Function Structure (verbal model)

Basic Secondary WHY HOW

Quantification:

Maintain Temperature 80 – 210 ° C ± 5 % variability Allowable Cost: EUR 20,- as target

Figure: 6

convert signal

connect cables

amplify signal

quantification criteria

quantification criteria



12

© Schoeler + Partner - Consultants for Product + ManagementOrg/Port/VM 2001/TC

Target Costing Process

Determination of Target Sales Price

Reduction by Target Profit

Define Target Costs and Allowable Cost

Cost Breakdown to Functions

function 1

cost 1

function 2

cost 2

function 3

cost 3

Function Analysis Cost Amounts Breakdown

Methods

Figure: 7

© Schoeler + Partner - Consultants for Product + ManagementOrg/Port/VM2001/CR to PStructur

Customer Requirements to Product Structure

Function Analysis

Q, EUR

Q, EUR

Q, EUR

CR Functions

Function Structure and Quantification

Functional Product Structure Ideas Creativity

Customer Requirements, Needs and Wants

Figure: 8

Customer-guided product concepts



13

Horst R. Schöler Schöler & Partner Rheinstrasse 36 76344 Eggenstein Germany www.schoeler.com or www.wertanalyse-value.de mail to: [email protected]

© Schoeler + Partner - Consultants for Product + ManagementOrg/Port/VM2001/example

Function Product StructureFigure: 9

C ust o m er R e q uir e m e nts

R atin g Ratin gQ u a ntificatio n a n d

Attri b utesT arget C o st

E U R

W a nt to m e a s ure dif fe rent g as c o n c e ntratio n s

1 0m e a s ure in in a c c e s sible pla c es

3 0 % p o sit io n 1 5

pro d u ce m e a s ura ble d ata

giv e p oint sta bility 1 0 %m e a ure a c c ura n c y,m e a s urin g ra n ge

2 0

giv e te m p. sta bility 1 0 %e n vir o n m e nt te m p erat ure

5

re d u ce a gin g effects

1 0 % fa din g 5

in dicate dif fe rent g a s es

s h o w g as 1 0 % C O2, Met h an 7

s h o w c o n c e ntratio n 3 0 % x % c o n c entratio n 7

W a nt an alarm in dicatin g rele a se of g a s

6 giv e alarm s e n d o ptic sig n als 3 0 % 5

s e n d a c u stic sig n als 3 0 % d B A 6

s e n d inf orm atio n to c o ntrol c enter

2 5 %

a c k n o w le d g e alarm 1 5 % pre ss m a n u ell

F u n ctio n s

from the voice of the customer to the function-oriented product … · · 2014-11-09done very...

Documents