DOUGLAS KINNIS MACBETH

QUALITY BY DESIGN

2
Quality by Design
1st edition
© 2019 Douglas Kinnis Macbeth & bookboon.com
ISBN 978-87-403-2988-9
Peer review by Prof. Arni Halldorsson, Chalmers University, Sweden

3
QUALITY BY DESIGN Contents

CONTENTS
1 Introduction and Definitions 6
1.1 Quality 6
1.2 Products and services 9
1.3 Quality - but defined from which viewpoint? 12
1.4 Design as a choice making process 13

2 Business Need, Intent and Boundaries:

the context for quality and design 18
2.1 Business and Service objectives 18
2.2 Value proposition 21
2.3 Value through transfer or by usage 22
2.4 Firm boundaries: Make/Buy and Do/Trade 25
2.5 Geographical, Economic and Political constraints
on business operations 27
2.6 Cost of quality 30
2.7 Customer satisfaction 33

�e Graduate Programme
I joined MITAS because for Engineers and Geoscientists
I wanted real responsibili� www.discovermitas.com
Maersk.com/Mitas �e G
I joined MITAS because for Engine
I wanted real responsibili� Ma

Month 16
I was a construction Mo
supervisor ina const
I was
the North Sea super
advising and the No
Real work he
helping foremen advis
International
al opportunities
Internationa
�ree wo
work
or placements ssolve problems
Real work he
helping fo
International
Internationaal opportunities
�ree wo
work
or placements ssolve pr

4
QUALITY BY DESIGN Contents

3 Innovation 35
3.1 Pull from Market 36
3.2 Push from Technology 36
3.3 Drive from Competition or by Collaboration 39
3.4 Intellectual Property (IP) 40

4 Design for ‘X’ 45

4.1 Design for Function 45
4.2 Design for Production 49
4.3 Design for Supply Chain 58
4.4 Design for Risk and Security 64
4.5 Design of Packaging for Distribution and Display 66
4.6 Design for Delivery 67
4.7 Design for Use and Sustainability 67
4.8 Design for End of First Life and future possibilities 69

5 Randomness and Design for Quality 75

5.1 The nature of natural and human made processes 76
5.2 Dealing with imprecisions and variations 79
5.3 Process Capability and Rejects 80
5.4 Robust design of manufactured goods 85

6 Quality Control, Improvement and Business Impact 86

6.1 Quality of Conformance 86
6.2 Service Quality and the SERVQUAL model 88
6.3 Quality Control 90
6.4 Quality Improvement 94
6.5 Total Quality Management. TQM 100
6.6 Competing on Quality Performance 101

7 New Technology Implications 103

7.1 Robots as products / process assistants or replacements 103
7.2 Additive manufacture 105
7.3 The internet of things 105

8 Conclusions and Final Thoughts 107

References 109

5
QUALITY BY DESIGN Introduction and Definitions

1 INTRODUCTION AND
DEFINITIONS
Your goals for this chapter are to:

• Understand the role of quality in delivering customer satisfaction

• Recognize that the design process is about making choices between alternatives
and that these decisions affect most subsequent business activities and
consequential decisions.
• Recognize that quality and design have impacts and affects which extend across
many organizational boundaries
• Realize some essential differences between products and services impacting on
quality and design
• Understand some of the decision issues to be managed in making choices
• Understand that quality is a journey, the aim is right first time and design is the
process that makes it all possible
• Recognise that there are multiple stakeholders affected by and effecting quality
performance

1.1 QUALITY
Quality is the main underpinning philosophy of business and service supply systems and
impacts the customer at the end of the chain and their perceptions of value for money, as
well as all of the intermediate customer and supplier linkages all the way along the chain.
Quality of output and the cost of producing the quality must be managed to allow the
supply system to prosper.

In the western world in former years these two economic concerns were regarded as
somewhat in opposition. That is to say increasing quality levels at the end increased the
costs of producing quality at all the earlier stages. The best of the Japanese manufacturers
however demonstrated that this was a spurious correlation and that in fact producing high
quality is a means to reduce overall costs. It has taken some decades for even the best of
western firms to learn these lessons and put them into practice effectively.

6
QUALITY BY DESIGN Introduction and Definitions

Let us start with four fundamental tenets of any business organization.

1. there is no business or service without a customer or client who ‘buys’ the

product and/or service provided by the business entity (this to include suppliers
who are paid by others to service clients specified by the paymaster, for example
welfare services to older people which are paid for by government agencies).
2. customer satisfaction is key but cannot be at any price since businesses can fail if
their costs to serve/supply are too high and are not covered by the income which
results from the supply process.
3. mismanaging cash flow causes more businesses to fail than a shortage of
customers/users.
4. the immediate supplier to a customer or client is just the front end of an
extended chain of supply, which extends back to raw materials somewhere in the
world. This front line supplier (let us call them the brand owner) is more or less
dependent on those others in its supply chain to be able to perform their own
services for the next customer/client in the chain.
5. commercial or service sector interactions need to be carefully designed. That
is, there have to be processes of data gathering, alternative solution seeking
and evaluating and final decision making to determine the degree to which the
supply side provision is intended to meet a set of user side requirements. These
decisions provide the organization framework which is intended to provide
customer satisfaction and supplier survival.

In this complicated and dynamic network of interacting and interdependent business entities
the issues of quality and design reside and must be specified, produced and delivered.
However the immediate customer/user is usually completely unaware of and uncaring about
this complexity and treats their business interactions as being with the brand owner or
principle service provider alone. Thus when we think of quality the customer/user perception
is everything and the complexity of managing and assuring the quality across the chain,
or more correctly network, is for the brand owner or service provider to manage, not the
customer/user/client.

Quality is a word which is much used but which is imprecise by nature. Even the American
Society for Quality (www.asq.org) has as part of its current (March 2019) definition the
following: ‘A subjective term for which each person or sector has its own definition. In
technical usage, quality can have two meanings: 1) the characteristics of a product or service
that bear on its ability to satisfy stated or implied needs; 2) a product or service free of
deficiencies.’ These aspects are of course very important and we will discuss each of them
but perhaps the key point to focus on at this stage in our journey is the early part of the
definition which highlights that quality is a subjective term for each individual or sector,

7
QUALITY BY DESIGN Introduction and Definitions

each with their own definition. This is not much help to a new student of the subject! This
also highlights another feature of this most important but variable definition which is that
it is not only beauty but also quality which is in the eye of the beholder! Please note that
we can also talk of the quality achieved by the whole organization and that particularly in
the service and public sectors, users or clients are customers/users of the providing system
and have similar requirements to commercial buyers.

The customer can be a person or an organization and can act as a buyer or as a user. However,
whether as an individual or as an organizational group of people, they are the only people
who can define what quality is for them so anyone whose task it is to satisfy customer
requirements has a basic problem in detailing (designing) what precisely is wanted by their
customers/users so that the supply side activities and products and services can be defined,
produced and delivered to meet these requirements. This means that the supply side needs
to have sophisticated and constantly active monitoring systems to gather information about
what their customers/users are wanting and also systems to regularly check on the supplied
products and services and how well they are satisfying these needs and wants.

Three further problems emerge. Firstly, even if we can define what the customer(s) want, do
we know how to measure what is supplied so that comparisons of customer need against
supplied product and/or service, can be made effectively? The second problem relates to time
since the customer’s own evaluation of their needs and wants (and crucially their expectations)
can vary over time and through interactions with other customers/users and suppliers and
other agencies in the customer’s environment. Thus there can be a time critical element in
the matching of understood requirements to the supply system’s capability to respond. The
third, and maybe even more critical element in the overall evaluation by the customer is
the value to them, which the supply side has delivered. Value adds a monetary, or related
criteria, into the evaluation equation so that the ‘all other things being equal argument’
suggests that delivered price will still be an important number to consider as the balance
between cost to deliver and serve is compared to the price effect on income.

Thus, from a customer perspective the attributes of beauty, quality and value are all measured
by comparison with alternative choices, if any exist. In the developed world they usually do
exist in the market place but our discussion is irrelevant to those very many situations in the
world where the problem is that there is no supply at all. However those agencies trying to
support disaster areas or change the life conditions for subsistence populations still have to
define the needs that can be supported by the design of effective supply systems. Like our
government agency discussions above, there is still a surrogate customer (the charity, aid
agency, etc) who acts for the client (recipient of the aid) and funds the supply process. The
design choices and options might be different from the developed world and its consumer
markets and the associated service and user environments, but some at least of the same
principles will be seen to apply.

8
QUALITY BY DESIGN Introduction and Definitions

Of course if all customers/users are different to some degree does this mean all products and
services need to mirror these differences? Well to some extent it should but this becomes
one of the big decisions to be made by the producers or suppliers and involves a difficult
cost benefit evaluation as to what customers/users are worth. The usual approach is to sub-
divide the totality of the anticipated customer base into a series of segments (for example
early adopters driven by new features who are less interested in cost or alternatively a cost
conscious set of customers happy to use last year’s technology or styles but at affordable
prices) that are designed to reflect some range of attributes (as indicated in the simple
examples above) which the selection is supposed to demonstrate and which differentiates
them from the other segments. For marketers this might revolve around issues of spend,
and long term repeat business for example but this might not accord with a sub-division
based on the production, or supply or logistical expectations of the customers/users. Even
dividing around different quality expectations might be very difficult given the uniquely
individual aspect we have been discussing. Market segmentation is therefore an area where
close interaction between different functional areas of the business is very important indeed.

1.2 PRODUCTS AND SERVICES

We also need to recognize early on that there are some aspects of quality that are somewhat
similar between goods/products and services. Fundamental is the possible separation between
the initial recognition of a customer demand and its satisfaction.

Physical goods can be produced in anticipation of an actual customer demand and stored
until the demand becomes a reality. The timescales can be long and value can be added just
by waiting. For example Scotch Whisky, which has to age for a minimum of 3 years before
it can be sold but will often be sold after many more years than that, in the purer, single
malt versions. Other spirits and wines do not have this restriction. Gin for example can be
ready for sale soon after distilling. Foods often improve with aging, cheese for example or
cold or smoked meats.

Fundamentally, services cannot be stored and are often designed or at least specified almost
coincident with their production by the supplier and consumption by the user. Hair dressing
is a classic example of this kind of interaction process.

Customer and provider do not always need to be in the same geographical location if the
information technology to connect them and to deliver the service activities, are in place.
We can think of remote medicine where a local doctor (or indeed supervised robot) does
the surgery but the skilled surgeon is at some distance from the patient guiding the local
activities in real time. Another example could be education designed and delivered from

9
QUALITY BY DESIGN Introduction and Definitions

a location remote to the learner but which still allows for some interaction (in real time
or at a convenient time for the learner) and downloading of some media based support
materials. Even in some of these, where information technology is important, the need for
the customer and provider to interact at the same time is no longer a requirement since
the broadcast information can be stored but here we can really consider the media service
to be more like the production of a media product and less of a pure service.

The time separation, if it exists, between customer demand realization and product or
service delivery allows for some simplifications and also some complexities. Storage costs
money, stored items can reduce in value (as well as increase in the case of whisky and cheese
discussed already), protection and management of the stock holdings increases production
costs and later sales might not arise so causing the stocks to be sold at a discount or
scrapped completely. The customer requirement also needs to be defined by the customer
or by some internal party to start the production process but this might not be correct at
the time of final use or customer demand might have changed by the time the expected
product is eventually delivered.

In pure services of basic requirements (for example our hairdresser or a General Practitioner
doctor) the provider does not know until the customer appears exactly what is required
of the service delivery system. There may have been some forewarning, for example, an
appointment with a lawyer to discuss a divorce process is framed around certain known
limitations on what the service will include but the details of the situation can only emerge
through the interaction between the client/customer and the provider (lawyer). The service
provider is therefore in an inherently more difficult situation than the product provider in
that the provider person (in contact with the client/customer) has to be able to design and
deliver the service in real time during the customer / provider interaction.

In advanced service systems these problems may not occur. For example in the Rolls Royce
Power-by-the-Hour concept we will discuss later the aircraft engine provider uses advanced
telemetry to track performance and operating conditions to identify and plan maintenance
work on the engines before the aircraft has finished its flight schedule and is released to
the maintenance team.

While product systems can be standardized, sub-divided and allow for a narrowly focused
and perhaps highly specialized person to produce that part of the overall product, many
service businesses need to have very capable and flexible people who are trained and
motivated to provide the quality of service to the client/customer. Thus designing quality
systems needs to recognize that we can be designing things and processes for making the
things (or delivering the service) and everything associated with getting the things to the
customer (and back again sometimes) as well as the training and motivating of people who
interact with the customer directly.

10
QUALITY BY DESIGN Introduction and Definitions

Quality in products and services is often described as if it is a single dimension consideration

but in reality a true understanding of quality requires us to think about everything that the
business decides to do and actually does, to be an effective business. This is a much wider
interpretation of quality than used to be the case even a few decades ago. It was once seen
as something that applied in product manufacture and sales more than elsewhere. There
was even the belief in traditional businesses that there was in place a process of diminishing
returns. That is to say, the quest for improved quality was limited by the increasing cost
of obtaining it, so that, as each increment in quality was achieved, the associated cost of
making the effort increased much faster – thus diminishing returns on the improvement
effort. The best of the Japanese companies proved that this way of thinking was based
on a misunderstanding of processes. By properly designing and managing processes these
companies produced higher quality and at the same time lower costs. Traditional companies
had based their approach on inspecting items after they had been produced to see if they
were good enough to be passed to the next customer in the supply chain. However, if a
problem is found it is already too late to avoid costs increasing and all that can be done is
to spend more money and effort to correct the problem or indeed to replace the defective
item. By refocusing on the design and processing issues the successful companies gained
control before production was completed and avoided the wastes of failure and/or re-work.

www.job.oticon.dk

11
QUALITY BY DESIGN Introduction and Definitions

It is this basic idea that underpins the thinking and discussion in this book. In essence we
need to avoid quality problems by working to make them impossible to occur. That way
lies increasing customer satisfaction and reducing resource use and waste.

1.3 QUALITY - BUT DEFINED FROM WHICH VIEWPOINT?

All businesses and other types of organizations live in a complicated environment interconnected
with all sorts of other entities. Some of these are in close proximity to them and deeply
concerned about the information used to make decisions and the impacts that result across
the network of concern. Others are more distant and impacted less directly and probably
less likely even to have any influence on any decisions made. Their perceived impact may
not be large in the short term but this can all change.

Another way to think about this is to construct stakeholder maps. A stakeholder is someone
or some organization that has an interest in a certain organization, group or individual and
some concern about the decisions made by that entity and how that affects the wellbeing
of the stakeholder.

Let us list and discuss possible stakeholder groups and what design and quality might mean
to them. This has to be general but it is always worth constructing a particular stakeholder
map. Figure one shows a stakeholder map for needs and expectations. Design for quality
thinking has to recognize that the choices made will have impacts on all of these features
and stakeholders and more.

12
QUALITY BY DESIGN Introduction and Definitions

Customers Employees Shareholders

• Appropriate product or • Continued employment • Economic and ethical

service specification to • Treated with respect value from investment
deliver required functions • Good working conditions • Good information on
• Consistent quality • Fair pay and benefits forward look
• Reliable delivery • Supports personal
• Acceptable price development
• Treated with respect

Focal Organisation

Suppliers Government and Society Competitors

• Continued business • Respect for laws and • Market share and

• Treated with respect taxes reputation
• Shared information • Respects environment • Capability gap
• Fair and reliable payment • Supports community • Competitive threat
• Supports business development
development

Figure 1. Stakeholder Map of Needs and Expections

Please note that some stakeholders are not as important as others and some stakeholder
requirements are not choices, for example paying taxes (although some large, global companies
seem to challenge that assumption by looking for ways to avoid paying taxes in certain
geographical areas). Please also recognize that competitors should always appear on stakeholder
maps but that their interests are generally opposite to those of the focal organization.
While many stakeholders must be communicated with in a reliable and planned way, focal
organizations do their best to limit the information that ‘leaks’ out to their competitors.

1.4 DESIGN AS A CHOICE MAKING PROCESS

Design is a choice making process, which has to take place near the beginning of everything.
Businesses and organizations exist to try and fulfill some kind of purpose. In the business
case it is to generate a surplus of income for the traded goods or services over the cost of
supply. For other organizations it might be to deliver the required goods or services within
the operating criteria for success where this is more socially constructed rather than being
simply economically driven. In both cases there is some form of end user or purchaser, as a

13
QUALITY BY DESIGN Introduction and Definitions

client or customer who has a self decided or recognized want or need which the supplying
entity believes they are able to fulfill. This discussion illustrates the fundamental problem
here. There are clients and/or customers/users whose needs and wants can be satisfied in
some way and the potential supplying organization has to decide: if they wish to supply;
what the detail of that supply provisions might be; and how it is going to be produced and
delivered so that the customer/user/client is in fact satisfied with what has been transacted
and provides a sufficient return on their investment.

Design is the process by which organizations try and investigate, evaluate and decide on
the choices they will make on what resources will be used in what ways to enact the supply
capability.

Design is about making a choice between alternatives. That choice, ideally, is well informed
about potential customer/user demand and equally well informed about all the features
needed on the supply side of the interaction so that a rational, economically and socially
advantageous choice can be made timeously. Information on both sides of the transaction
will often be imperfect but still choices have to be made in order to provide some kind of
offering to the customer/user. Given the scope of quality, as we have begun to discuss it, is

WHY
WAIT FOR
PROGRESS?
DARE TO DISCOVER

Discovery means many different things at

Schlumberger. But it’s the spirit that unites every
single one of us. It doesn’t matter whether they
join our business, engineering or technology
teams, our trainees push boundaries, break new
ground and deliver the exceptional. If that excites
you, then we want to hear from you.
Dare to discover.
careers.slb.com/recentgraduates

AW-1703-170x115-ad-Route 1v3.indd 1 28/01/2019 17:24

14
QUALITY BY DESIGN Introduction and Definitions

clear that all aspects of business and organizational life requires some degree of the design
choice process to be applied.

Engineers have a concept they apply to their design processes, which can be called degrees of
freedom but not in the pure mathematical or statistical usage. The point is that as a product
designer sits in front of a blank piece of paper or a computer screen thinking about how
to embody some of the choices they have to make, they do so recognizing that there are
constraints on their choices imposed by scientific understanding, processing characteristics
of existing materials or similar concerns. Within the limits of these constraints they have
however a vast (infinite?) range of options for their choices. However as each single choice
is made the available choices reduce by one - they have reduced their degrees of freedom by
one and so their subsequent choices are made from a reduced number. Repeat this process
often enough and there is little discretion left at the end of a series of choices.

A similar effect is seen if we think of design decisions as being part of a decision tree process.

Decision trees used to evaluate strategic decisions, attempt to identify all possible outcomes
and their potential payoffs (financial or other evaluations) and the probability that this will
occur. The whole decision tree has to be completed from beginning to end and then the
process reverses so that the most likely and advantageous choice at each branch is taken
(also allowing for the costs to traverse a particular branch), and the decision moves further
back towards the origin. There is much uncertainty in this. The outcomes are predictions
and the probabilities certainly are and might reflect the decision maker’s personal approach
to risk (her risk appetite).

Decision trees in this approach have utility but when used in the design process there are
other issues of concern. Often the costs of particular choices are very difficult to anticipate
so that calculation is also very uncertain. It is also the case that currently this author
knows of no design software that would allow for the full scale and scope of the decision
criteria spread over an extended supply chain network of many interconnected but not fully
integrated entities where the incentives to share information will not be always be present.
The company that can create such a software approach would in this author’s view have a
great commercial opportunity.

15
QUALITY BY DESIGN Introduction and Definitions

Moulded Carbon fibre Assemble from components Machine from solid

Polymer Aluminium

A B

Choice of materials

Figure 2 Decision Tree example for design of computer case

If we now consider the practicalities of designing, testing, building and delivering a new
product (or service since the considerations very similar) we can see the decision tree is
representing the actual paths taken at each stage and so we have the practical issue that once
we choose one path along branch (A) for example we have deliberately avoided the other
one (B). However in choosing to follow A we cannot in the future connect to any of the
later branches which started from branch B since the tree joins serially related items and
choices and cross linkages at the top of the tree are not possible. The other consequence is
that, if in the future we discover we have reached a point where the choices made will not
work out as anticipated or turn out to be unattractive in some way, we have to retrace all
of the physical steps all the way back to the branching point where we made the big choice,
maybe all the way back to B and then follow that branch even although we thought it less
attractive the first time round. This of course increases the time taken to reach a solution
and the cost of undoing part finished branches and the costs of retracing branches and
building the newly attractive ones. In reality we would rather make all of the ‘best’ decisions
in theory or in the software of our computer system in advance of making a start on any
process which began the translations of the design decision into physical artifact..

16
QUALITY BY DESIGN Introduction and Definitions

% Design choices made

£ Actually spent
Test &
Operational Delivery Re-cycle
Innovation Launch

Product lifecycle stages - where costs are actually incurred

Figure 3 Costing Impact of Decisions and Consequential Spending

Figure 3 shows another feature of importance. Along the bottom are a series of distributions
of the activity patterns over a product’s lifecycle including the final re-cycling stage at the
end of its first life. This is increasingly being discussed as circularity as the product moves
through first life to being modified in some way for another role. The design process needs
to consider what is needed to facilitate these series of changes so that they can be achieved
effectively when the time comes. For now, let us concentrate on the top, orange arc. Again,
let us imagine sitting in front of the designer’s computer screen trying to evaluate the decision
trees. As decisions are evaluated, changes can be made as fast as the ideas change and the
fingers can move and are essentially costless of themselves. The degrees of freedom argument
shows up in the shape of the graph since early on, decisions can be made very quickly and
the number of decisions made increases rapidly. Later on there are fewer choices being made
because of the serially linked decision tree and also because we need fewer decisions later
on since much has already been decided. However decisions have consequences. A decision
made by the designer has to be acted upon by someone else who will devote their own
resources to the action but might also need to use or purchase other resources to effect the
decision. This spending curve, in grey, starts off slower and then increases incrementally
across the rest of the lifecycle stages.

All of this demonstrates that the initial thinking, innovation and design activities need to
be made as early as possible, as comprehensively as possible and as right as possible, first
time. If ‘Quality is a journey’ and should be ‘Right First Time’ then the process that makes
this possible is Design.

17
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

2 BUSINESS NEED, INTENT AND

BOUNDARIES: THE CONTEXT
FOR QUALITY AND DESIGN
Your goals for this chapter are to:

• Recognize the dynamic properties of Order Winners and Order Qualifiers and
how they can be used
• Realize that suppliers make value propositions, that is offers of goods
and services which can provide value and need satisfaction to customers/
users but only when a buyer actually buys or a user accepts the offer,
is there a trade transaction
• Recognize the implications to the design and quality focus of customers/users
owning or paying to use an item that is of value through transfer or value in use
• Realize the implications of the basic MAKE/DO or BUY/TRADE decisions to
determine the limit of a business’ control reach
• Consider the effect of globally mobile businesses as they consider where and how
to locate distributed capabilities as Foreign Direct Investment companies
• Realize the costs of failure and the costs of designing to make failure impossible
• Understand that customer satisfaction is key but that it cannot be at the cost
of damaging a supplier’s possible sustainability unless there are many suppliers
available to supply these customers and from whom they can choose to interact

2.1 BUSINESS AND SERVICE OBJECTIVES

Lets us revisit two of the tenets of all organizations we introduced early in chapter 1 and
think about them more deeply.

1. there is no business or service without a customer or client who ‘buys’ the

product and/or service provided by the business entity (this to include suppliers
who are paid by others to service clients specified by the paymaster, for example
welfare services to older people which are paid for by government agencies).
2. customer satisfaction is key but cannot be at any price since businesses can fail if
their costs to serve/supply are too high and are not covered by the income which
results from the supply process.

18
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

The two tenets are another way of describing the basic logic of any transaction, that is,
there is on one side a demand expressed by a customer from whom income will flow (even
if not directly as in the government agency driven supply example); and on the other side a
supply capability able and motivated to satisfy the customer need. From these two directions
objectives also flow. A supplier looking at the market demand side, needs to locate and sell
to appropriate customers/users and in so doing earn enough income to more than cover
their costs. So issues like numbers of customers/users; market share; income per customer;
customer location and demography; attitude to innovation (will they buy new ideas and
products or wait until they are more established on the market); can all be translated into
objectives with the associated means of measuring success in meeting them established and
used to guide the business forward. The supplier also needs to understand what resources to
choose to use (including those we do not own but can access by some agreement - which
may create a requirement for another contract and transactional payment) and at what cost;
time and resource needed to effect a change; and the costs and implications of a failure of
some kind on both sides of the transaction.

All business decisions and especially design ones are usually made under some form of
constraint on resource capability and availability in the time scale allowed, all of which
results in difficult decisions about priorities and sequencing of actions and payments. One

PREPARE FOR A
LEADING ROLE.
English-taught MSc programmes
in engineering: Aeronautical,
Biomedical, Electronics,
Mechanical, Communication
systems and Transport systems.
No tuition fees.

E liu.se/master

‡
19
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

approach to this prioritizing process is captured in the concepts of Order Winners and
Qualifiers. This has the added advantage that talking in these generic terms makes is easier
for different parts of the business (especially sales / marketing with operations) to clarify
and commit to those aspects of the business offer which are crucial to allowing customers/
users to choose to deal with the business in focus.

Let us look at qualifiers first of all. A qualifier is some feature of the good or service which
customers/users use as an indicator to help make a supplier selection or purchase decision
and shows them that a supplier is capable of meeting their requirement. If you do not pass
the qualifying test then the customer need go no further and you are excluded from the
possible set of potential suppliers from which the customer will eventually choose to buy
(if they buy anything). Qualifiers can vary over time but can include experience, brand
awareness, quality evaluations, consumer evaluations, price, location and so on. As we will
see shortly they are also subject to competitor actions over time, which change the categories
or their relative importance. Safety is a special qualifier that also demonstrates another issue
which is, that without a qualification on this factor then the customer/user stops any further
evaluation and nothing the supplier can do on the other factors will make any difference.
This also makes this qualifier an order losing category.

Once a supplier has proved satisfactory against the list of qualifiers, then it is entered into
the decision set for the customer/user to choose from but there still needs to be something
that makes one supplier stand out from the crowd and that is the order winner. It is that
factor or performance within a set of qualifying factors that positively differentiates them
from their competitors and persuades the customer to make a buying decision for their
offer and wins the supplier the order.

Let us consider the Olympic games as an analogy. Qualifiers get you into the stadium
and through the heats perhaps but do not allow the award of a medal, something else is
needed for you to get on the podium and in business second and third have no value! This
is why the impact of performance enhancing drugs is so emotive for ‘clean’ athletes as they
offer order winners unavailable to those who abide by the rules. More problematic in the
sport example are issues around hormonal patterns for which the person is not responsible
but which still offer winner advantages. At least business does not have to contend with
this complication in its purest form but perhaps explains using ‘beautiful’ models in sales
promotions to differentiate otherwise somewhat similar products. Here the implied message is
that by choosing the particular product you are identifying yourself with the ideal suggested
by the model and the model in this sense is the order winner.

20
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

A dynamic implication of a competitive market place is that all suppliers are trying to
differentiate their product or service from their competitors’ efforts and if all the factors stay
the same then the race is like our sporting example where you just need to be ‘better’ in
some criteria to win. However diminishing returns can set in where for example in athletics
or swimming the differences are measured in hundredths of a second. So what can the
suppliers or Olympic contestants do? They can innovate and change the order winners. To
return to the Olympics, consider the high jump in Mexico in 1968 when Dick Fosbery first
demonstrated his flop and won gold, an Olympic record and changed high jumping ever
since. He did this by going over the bar with his back to it and his body arched over it,
this at a time when most used the Western roll over the bar but face downwards. Changing
the order winner in some way makes for a new order winner in the short term and creates
a new qualifier for everyone else. So far no one has improved on the Fosbury technique
although the performance increments still increase from Fosbury’s 2.24 metres to currently
2.45metres, as the current Olympic high jump record.

We will return to the importance of order winners and qualifiers later once we have discussed
some aspects of Japanese quality practices that changed our understanding of the role of
quality as an order winner and a qualifier and provided a double benefit to those who had
figured out how to do quality properly.

2.2 VALUE PROPOSITION

As we have discussed, the customer is the most important person in business for without
him or her there is no possible trade transaction involving money or equivalent value being
exchanged for the supplier’s goods or services. Without this exchange there is no income
to support the supplier’s operation. However, suppliers do not sell products or services,
they offer their products and or services as a means to satisfy some need that the customer
has. The supplier is thus offering his or her services and/or goods to satisfy a need that the
customer has realized (s)he has and is proposing that this offering will provide the value to
the customer of satisfying these needs. For example a seller of home cleaning services knows
that the potential customer wants to have a clean home and offers the cleaning services as
an alternative to the customer doing the job themselves. The customer has to evaluate what
the cost of the cleaning service will be in comparison to the value they place on not having
to spend their own time and effort cleaning and use those resources on something more
pleasurable. However this value proposition is just that, an invitation from the supplier to
the customer to satisfy his or her need and only if the proposition is accepted and a sale
takes place, can the customer value be received and the transfer of value from supplier to
customer – the good and/or service - and transfer of value in money or other kind be made
in payment from the customer to the supplier. The trade has then occurred and we hope
both parties are happy with their respective outcomes.

21
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

In all such trades there is always the potential on each side to question if the final deal was
the best that might have been possible, if only something different had been possible. The
more communication, in both directions, about expectations and processes that can take place
prior to any exchange opportunity, the less significant is this feeling of regret likely to be.

Above, we have talked of need but the reality is that much of what we buy (especially as
individuals) is not driven by need in the sense that we would physically suffer if we did not
have a particular item, often it is driven by a no less strong attitude of want where other
psychological needs are being satisfied. We also need to recognize that sometimes customers/
users do not know that they want something until they see or experience the item or service
personally or see that some other person is gaining great satisfaction from their purchase
of the item or experience of the service. To some extent this is the job of the Marketing
function - to create awareness of value propositions to which a future customer can become
attached. So a collaboration is needed between marketing and design/operations to make sure
that the supply side is capable of delivering, (at an acceptable cost in resource use), what the
marketing activity has persuaded a customer to want. Allowing either side of this internal
boundary to become out of synchronization with the other is a route to major problems.

Of course, other potential suppliers are likely to be making their own value proposition to
the customer so here again we are back to the problem of an individual customer trying
to make a distinction between one proposition and another in a complicated process of
valuation and final decision. Here again, an understanding of the order winner criteria
is important and the production and communication of distinctiveness on that criteria,
needs to be managed.

2.3 VALUE THROUGH TRANSFER OR BY USAGE

Above, we have discussed value in terms of a sales process in which there is a formal transfer
of ownership of a good but the trade in services demonstrates a different logic which is also
available to goods and that is that a customer’s needs and wants can be satisfied by obtaining
and paying (in some way) to access the service (or good) and use it. The first example is
when ownership of the item is physically transferred and this is the provision of value to
the customer through the transfer thus allowing the customer to use the product or good
whenever it is convenient for the customer. Value through transfer thus allows the customer
unlimited access to the good so that usage can happen at any time in the future without
any additional charges except maintenance and payment of any consumable charges, for
example fuel to run a drive motor perhaps. The downside of ownership, apart from these
ongoing costs, is that capital has to be spent to purchase the item and that capital could
have been spent in other ways (what economists call the opportunity costs) plus the item
has to be stored until the next usage time is identified.

22
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

When one contracts with a service provider there is no concept or expectation of transfer of
ownership or indeed of repeated future use without a new contract. A legal consultation for
example does not provide enduring use of the legal expertise and the customer does not in
any sense own the legal advice or its provider. A legal advice app on a computer or smart
phone is different in that it has attempted to capture some current legal expertise at one
point in time and this is transferred as a product to the customer and it can be re-used later
(but may no longer be of value if the world has changed in some way in the interim period).

When a customer considers what they actually value, that is what need or want they wish
to have satisfied then there is this question … is ownership important to them? The answer
to this question varies over time and through the availability or not of a technological
solution. Let us think of surface transportation over long distances. In former times the
only sensible way to do this was by a series of services in terms of relays of coaches and
horses in association with a series of change over points for the horses and/or coaches and
coachmen with associated hostelries for overnight accommodation for the travellers, since
any journey over a reasonable distance would take days. With the coming of the railways
their speed reduced the demand for the coaches and horses as well as the hostelries but the
travellers still had no option but to pay for the service of travel without any ownership of
the means of travel. With the rise of the automobile the option of flexible transportation

How will people travel in the future, and

how will goods be transported? What re-
sources will we use, and how many will
we need? The passenger and freight traf-
fic sector is developing rapidly, and we
provide the impetus for innovation and
movement. We develop components and
systems for internal combustion engines
that operate more cleanly and more ef-
ficiently than ever before. We are also
pushing forward technologies that are
bringing hybrid vehicles and alternative
drives into a new dimension – for private,
corporate, and public use. The challeng-
es are great. We deliver the solutions and
offer challenging jobs.

www.schaeffler.com/careers

23
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

and ownership became an attractive choice for many travellers. However in cities the issues
of storage, that is parking, is an issue and so the rise of the short term lease car clubs where
rather than the problems around ownership the change is made to only pay for usage while
vehicle locations for collection and drop off are shown on the smartphone app. In effect the
club owns the vehicle and pays for the parking locations while customers pay for value in use.

A long established example is ‘Power-by-the-Hour’ which is a Rolls-Royce Trademark and

represents the fundamental change for airline operators from the value in transfer to the
value through usage model. First introduced in 1962, this service concept has the airline
pay a fixed rate charge for a guarantee that when the airline needs an engine which is ready
to operate then it will be on the wing of their aircraft and the airline does not have to
worry about financing the purchase and maintenance costs of main and spare engines or
the scheduling and management of the engine maintenance and updating issues. The costs
to the airline have moved from a fixed and variable basket of goods and services to a purer,
fixed cost service basis and this value in use approach avoids the high initial capital costs
and that capital can be used more productively elsewhere.

Returning to our automotive example, we might be coming closer to another reversal of

the transfer and use pattern when vehicles become more autonomous. Part of the attraction
of these systems is that by replacing the human driver by software systems of control then
we can manage traffic flow more effectively and probably increase the density of the traffic
more safely. Given current levels of traffic congestion on many of the world’s highways, it
is already hard to gain any pleasure from the driving process itself so removing the need to
actively drive the vehicle allows the passengers to do other things during the journey. There
is still likely to be a demand in the autonomous future for drivers who enjoy the process of
driving to avoid using the software control systems but perhaps society will need to create
separate places to allow such ‘dangerous’ activities to take place away from the main highways.

Removing the need for ownership of the vehicles allows for a car club type of approach or
indeed the removal of private ownership and its replacement by travel as a public service.
However the major difficulty in the public sector scenario is the wish of the public to
travel to a complex mix of destinations at their chosen timings. A service capability that
allowed a set of individually negotiated service journeys might be needed to meet that
market sector’s requirements.

The importance of these discussions in the context of quality and design is that ownership
and responsibility for maintenance impacts design choices.

24
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

For a goods supplier, value in transfer allows two potential income streams. The first is
at the time of initial transfer, that is the sale of the asset. The second comes through the
provision of more goods as spare parts or replacements, enhancements or through the
provision of after sales servicing. The possibility of repeated sales raised the issue of planned
obsolescence in which a product was designed to last for a certain period of time before a
replacement would be required – usually just after the guarantee had expired! In this way
the initial supplier might ensure a flow of returning customers/users to whom they could
sell replacement parts. However, the value in use approach means that the after sales costs
continue to be the responsibility of the initial owner, the supplier, and it now becomes
in their interest to reduce the through life costs of maintenance and updating and so the
design task is to reduce these after sales costs to a minimum.

The innovation of selling a value in use contract might be counteracted to some extent if
there were a large installed base of customers/users who were operating on the purchase
and maintain model although this could be managed if different product lines were offered
on only one business model at a time.

Operations systems in general find it difficult to operate a complex mix of customer

requirements using the same people and facilities since changing facilities and mindsets is
always a challenge.

2.4 FIRM BOUNDARIES: MAKE/BUY AND DO/TRADE

A fundamental question for all businesses is how much they want to do themselves using
their own assets and employing their own staff and alternatively how much are they
prepared to transact in global market places to access the assets and staff resources of other
businesses and individuals. In effect, we are designing the boundaries of the business or
the firm in the description of the economists who first discussed this issue. In answering
this question we are defining what assets and capabilities will be inside the boundaries of
the firm and can be influenced and controlled directly and those assets which will remain
outside of the firm and we have to negotiate and contract with the owners of these assets
to use these assets, in a market trade. This is a question that can have different answers
for different situations and might not be static in the medium to longer term. The short
description of this choice for goods is Make (internal ownership and investment) or Buy
(trade in the market). For services the equivalent is Do (internal with own resources) or
Trade (contracting with external providers).

Traditionally the Make or Do option was regarded as inherently more controllable as, in
theory, all of the participants inside the boundaries of our firm have the same objectives
and motivations to succeed and can be persuaded through threat or motivation to perform

25
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

as required. The Buy or Trade choice should recognize that our firm is only one of perhaps
many others who are trading for the goods or services with the chosen external party and
so the ways to direct, command and motivate the external party to perform are not the
same as those suitable internally. Another feature to consider is that internal assets can be
somewhat frozen in time. It takes time to buy and learn how to effectively use physical
assets and we are faced with the same issues as our airlines in spending capital in their
purchase and that capital might have a better return on investment elsewhere. Similarly,
employment laws and good human relations management practices means that these human
assets are somewhat fixed in costs and capabilities and expensive to remove or replace or
modify through retraining perhaps.

The external party has advantages in having a different focus to their business model and
so will have a different mix of hard and human assets which they will be motivated to
invest in and support in development of their overall capability. In this way they continue
to be attractive as potential supply partners for customer firms like us. By having business
relationships with a variety of external parties our focal firm has an opportunity to package
these extended capabilities as part of the value offer they make to their own customer
market place.

Striking a match, reconnecting with your family through Skype or over a phone network from Ericsson, refurnishing your
apartment at IKEA or driving safely in your Volvo - none of this would be possible if not for Sweden.
Swedish universities offer over 900 international master’s programmes taught entirely in English.

Don’t just pick a place - pick a future.

>studyinsweden.se

26
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

Going to the market to buy or trade need not be as difficult a choice to make if the external
partner has been well chosen and managed over some time and who is well matched to
our requirements and is ready to commit to supporting us over a planned future timescale.

Like many management decisions the choices here need to be revisited frequently enough
for the chosen directions to meet current requirements and anticipated near term situations
as well.

Again the impact on quality and design of these choices relates to the scope of what has to
be designed and maybe modified internally which is supposed to be easier to control or if
trading with the owners of the external assets, then one issue will be how our requirements
(now acting as a customer) can be properly specified to the external party so that they
can do the best job they are able to and how quality is controlled and ensured across the
organizational boundaries.

2.5 GEOGRAPHICAL, ECONOMIC AND POLITICAL

CONSTRAINTS ON BUSINESS OPERATIONS
Most businesses start as small locally based organizations that over time and with continued
success expand in scale and as this continues they will also expand their scope of activity.
As local markets are seen to be reaching reasonable levels of saturation the search for new
markets will intensify. Initially this is likely to be by exporting to contiguous locations,
towns, regions and finally countries. At this point we can talk of exporting from the home
operational base. As this process of incremental expansion continues it may be necessary to
move activities in addition to sales to the new market places and then there is the need to
consider how best to do this. One way is described as multi domestic where each new market
location is required to be served with what are effectively clones of the initial business. The
advantage of this is that the new market is being served by dedicated resources ready to be
flexible in meeting the needs of the new customers/users. However this comes at the cost of
some duplication of resources in the different locations along with possible proliferation of
customer offers (especially if there are lots of uniquely specified and produced local products
or services in the different geographies while creating no real benefits of scale from the
aggregate size of the combined business). Also, the devolved management in the extended
markets might be more difficult to coordinate and control while the new managers might
wonder what real benefit they are getting from the head office back at the original site.

An alternative approach retains centralized control from head quarters by only offering
the same product to all customers/users regardless of the local conditions in their markets.
Attempts to produce the global automobile, which is essentially identical in every country

27
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

of the world, demonstrates this thinking. The design tasks and possibly the quality control
aspects seem to be more controllable in this model. The trade off in this business model is
that benefits from scale can be realized but individual customer requirements are ignored or
marketing is set the task of persuading the customers/users (by some creative communications)
that the standard, global product actually does meet their requirements.

The final option is to develop as a true multinational which tries to gain all the benefits
of each of the other approaches but as one global enterprise gaining benefits of scale and
standardization where sensible and allowing for responsiveness to particular customer
requirements in some parts of the world while offering the local standards as special offers
to other market places. These corporations often have business turnovers larger than the
gross domestic products of the countries in which they trade and of course become hugely
important as inward investors into those new regions. So important are they in terms of
market presence, employment opportunities and payments of local taxes that often they can
agree special treatments from the local governments that they can reduce their taxes and
often they are offered special treatment in supportive infrastructure investments to make it
attractive for the corporation to locate in that political location. In electronics production
for example some of these companies are huge and supply global customers/users and are
able to switch production from one region of the world to another in a matters of weeks.

The other attraction of these corporations for the local politicians is the opportunity to
learn some business and technology lessons from their global experiences. In this way the
local government has a route to the up-skilling and development of its local people and
indigenous industries. The Chinese government has been particularly astute in its approach
through forcing direct investing corporations into joint ventures with local companies in
an attempt to enable a transfer of technology understanding and capability to their local
population. While often accused of using this process to steal intellectual property from the
foreigners, they are usually very clear about their intentions to become competitors with
the incoming companies. For the external corporation they feel the need to be present in
such a huge and expanding market so accept the joint venture requirement but then try to
control the leakage of intellectual property to their partner organization. If enough Chinese
local firms take part in enough joint venture activities with a wide enough range of external
partners it becomes easier to assemble all the relevant information needed to become a full
and very competent competitor and this is happening in an increasing range of sectors.

A large part of the attraction of these new market and production locations is the opportunity
to use local and cheap labour but of course technology transfer to cheap labour locations
comes with its own costs. Developed businesses sometime forget the human effort to become
a developed company and much of what the employees learn is actually very difficult to
define and categorize in such a way that the knowledge is easily transferred. Experience,

28
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

attitude and commitment to a task is a learned process which is largely tacit rather than
explicit in nature. Thus it is relatively easy to transfer the technology itself but not so easy
to transfer a full understanding of the control systems that make the machines work. This is
even more the case where modern approaches to quality control require a degree of personal
understanding and process insight along with recognition of improvement processes and
awareness of threats to safety and performance. Many organizations have found the need
to send their home based operators, experts and managers to train the local people over a
much longer period of time than initially expected and budgeted for.

Another big issue in the economics of foreign investments in the operations processes is
the tendency over time for low labour cost advantages to dissipate. As the local employees
learn from the new companies they develop an attraction to other local employers and so
their market value increases and the war for talent begins. Very soon the low labour cost
attractiveness has disappeared. Hopefully by then the local economy has also grown and new
consumers have emerged able to buy the products that their people have helped to create.
By this time the formerly foreign focused company is behaving more like a local business
and is no longer exploiting the labour situation.

Choose a university
where life is possible.
Bachelor programmes in
Business and Economics | Design and Humanities |
Computer Science/IT | Natural Science
Master programmes in
Business and Economics | Computer Science/IT |
Design and Humanities | Natural Science |
Social and Behavioral Science | Technology
and Engineering
Summer Academy courses

Ellen, Marketig,
Master programme
120 credits

29
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

So as businesses become more global they also become more local as well but as global
businesses they are also likely to be managing across great distances where time zones and
travel times are important factors and of course if we are producing physical products then
the logistics involved of materials and goods transportations, insurance, currency fluctuations,
import and export duties and processes have all to be factored into economic evaluations
of the attractiveness of the local marketplace.

Perhaps the most difficult evaluations will revolve around views of the stability, future
intentions and possible support or antagonism of the local politicians. Businesses often have
a longer horizon in view than politicians who are subject to election timetables and promises
made. As political leadership changes so can the actions of the business be challenged. Of
course not every area allows free votes of their populace to elect their leaders but dictators
are also not known for the consistency of their decisions and in many parts of the world
corruption at various levels, including at the very top of society, can be a major challenge
for any business management.

In this variable scenario the need for quality management will still exist but the decisions
around make/do might change quickly causing a reevaluation of the focus of design decisions.
Both the design and quality functions might need to plan for the enhanced communications
needed to successfully transfer skills and achieve top performance levels. However the
concern about the theft or legitimate learning about capabilities and intellectual property
(which might enable suppliers or partners to become competitors) might mean that the
design team need to think about not communicating (or actively hiding) all of the details
of a particular design.

While some of these considerations also affect trade in services it is still the case that fewer
services are delivered by global multinational businesses than is the case for products. For
example, while there are global law and banking and insurance firms as well as accountancy,
consulting and engineering firms, there are many examples in the service sector where
discussion of global markets makes no sense. Health sectors are predominantly locally based,
as are political systems and most education systems up to the tertiary level are very local
in nature. For these sectors these discussions have little relevance.

2.6 COST OF QUALITY

While we are still to discuss quality in detail it is worth spending some time setting some
definitions in place. Crosby famously argued that Quality is Free (Crosby 1979). What he
meant was that what costs money is getting things wrong and so incurring replacement or
rectification costs, so perhaps we should talk of the costs from ‘unquality’. He first stated

30
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

the need for zero defects or perfect production as the target and that is the view in this
book where, in addition, we will argue that this can only happen if design, in all of its
forms, creates the conditions for perfect production.

So if there are defects or defective products we can find them at two different stages. The
first one is internal, when we create conditions to stress the product such that if it is weak
in some way then it will fail. This is expensive since we need to replace the failed item
and spend more resources to do so while also scrapping or repairing/reworking the first
one to try and recover some value. If the product manages to survive this stage it might
still be weak and fail when in the customers/users hands as an external failure. This is the
worst cost of them all since we have let our customers/users down and they are likely to
be very upset and also tell others of their bad experience. This is even more acute in the
age of instantaneous communications and social media networking. The costs of the bad
experience, communicated to thousands of actual or potential customers/users, can be
dramatic in terms of non-repeating business or lost potential customers/users. In addition,
the failed product has to be replaced or worse still, if there is established that there is an
endemic safety or functional problem, the product might need to be recalled and replaced.
Since not every product can be traced to individuals to facilitate returns and replacement
the supplier might have to resort to advertising to promote the safety recall thus further
increasing the expenses and reputational damage.

It is better to cause more internal failure if it means that the risk of external failures is
reduced. At least that way, while the costs increase, the market place does not see the issue.

The next two costs of ‘unquality’ relate to, firstly, appraisal where the systems and processes
used to measure and control the achieved levels of performance against the designed
standards are quantified (a measure of how actual output conforms to the desired and
designed requirements).
The second cost incurs a monetary charge but it could be argued is not a cost but an investment
and that is prevention costs. These include, among other things, the market facing costs of
really establishing what customers/users need or want and all of the processes to translate
that into design specifications for all of the stages of operational planning and performance
and including all training and motivation of all of the people involved in the business.

Generally, it is better to increase internal costs to reduce the chances of external ones. We
want the appraisal costs to be reduced but not if conformance to specifications is impaired.

Overall what happens is that if we spend relatively more on prevention then all of the other
costs reduce. This is in effect what Crosby was saying. That is, if we prevent the possibility
of an error, through effective design and control measures, (in his terms zero defects) we will

31
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

avoid the costs of the unquality. In reality therefore, quality (of output) is not free since we
have to spend on prevention but doing so reduces the other costs of getting things wrong
and having to make them right again.

It was also once believed that increasing the target level of the quality of output was an
exercise in diminishing returns in that increasingly larger expenses were needed to create
each increment in quality performance. People therefore used to believe that perfection
as the target was not achievable or affordable. This actually was true when most of the
expense was devoted to an inspection process during the appraisal stage. In this situation
the inspection was about measuring outputs against specifications and declaring as a defect
anything that did not pass the test. The key point here is that a failure to pass the test has
already cost a lot in resource terms and even more to rectify the failure. By changing the
nature of the design and management processes we can avoid the possibility (or reduce to
a tiny probability) the chance of failure. In this way quality can be right at the first time
of testing - not after repeated attempts to find one that passes the test.

All of this discussion also relates to service provision (with some additional ones we will
come to in section 5.3).

INDEPENDENT DEDNIM

LIKE YOU
We believe in equality, sustainability and
a modern approach to learning. How about you?
Apply for a Master’s Programme in Gothenburg, Sweden.
PS. Scholarships available for Indian students!

www.gu.se/education

32
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

2.7 CUSTOMER SATISFACTION

Businesses cannot exist without customers/users. These customers/users do not even have
to pay the providers for the services delivered but someone has to (remember our earlier
example about the delivery of social care services mandated by a government agency), or
there is no business. This definition allows us to define philanthropy and charity as business
activities as many of the same issues exist even where no profit motive drives the supplier.

Perhaps it is the feedback mechanisms in the different sectors that show the biggest differences.
When the customer is in some way paying their own money for the service or product
delivery they are more likely to look for their personal satisfaction or complain or in other
ways make known their dissatisfaction. Recipients of philanthropy or charity are often too
grateful for the support to be critical of the process of providing it. Of course, the agencies,
which perform as intermediaries between funders and recipients of charity for example must
see, as one of their responsibilities, the need to act on behalf of their recipients’ interests
and exercise some customer like feedback to the supplier.

The big problem for the third sector in supporting those in real need is that there seems
to be no limit to the demand for their services. While globalization has been a major force
in reducing the real level of poverty in the world there seems to be no end to the potential
demand from still poor parts of the world where basic subsistence, access to clean water,
infrastructure and safety issues pose enormous challenges to those populations contributing
the finance, where these issues have been largely solved. In the developed world we often
forget just how much time, effort and commitment it has taken our forebears to get us to
our current levels of civilized living standards. We should not be surprised therefore if the
demands from other parts of the world seem to be so urgent, large and seemingly unending.
In addition of course poverty has an absolute and a relative set of measures the latter of
which means that the demand is not going to diminish until the recipients are enabled
somehow to take more charge of their future opportunities and generate their own successes,
at which point the charitable help can refocus to other regions of the world.

So in the charitable sector the issue is unlimited demand along with limited capability to
support the demand.

In the financially driven business sector the supplier has choices to make to satisfy or ignore
demand. Customers/users have needs and wants for which they are prepared to pay some
amount of their available asset resources in trade with the supplier. The customer makes a
judgment about whether the supplier’s value proposition offer is worth the level of payment
asked by the supplier. However the supplier is also evaluating whether the amount of
payment the customer is comfortable with is actually sufficient to cover the costs incurred
by the supplier in providing the support level expected. It can be that the expectations of

33
 BUSINESS NEED, INTENT AND BOUNDARIES:
QUALITY BY DESIGN THE CONTEXT FOR QUALITY AND DESIGN

the customer so increase the costs to the supplier that they can make no or indeed negative
margin from transacting the trade, that they must refuse to do so. (Suppliers measure this
in the value ‘cost to serve’.) Customer satisfaction therefore is really important to generate
an excess of income over costs and so allow the continuity of the business activities but
customer satisfaction cannot be at any cost to the supplier or the supplier must eventually fail.

Customers/users also need to recognize that suppliers must be allowed to make enough of a
profit margin to allow them to continue to invest in their business and to continue to offer
their value proposition to this customer. Of course if there are lots of suppliers, who are in all
other regards equally capable of supplying the needs of the customer, a supplier failure is not
a problem for the customer who can simply switch to another provider. However switching
suppliers is not costless to the customer as there are a number of search, evaluation, testing
and communication costs, while the costs to build mutual understanding for those involved
in new contracting costs, are also involved in the switch. Allowing supplier businesses to fail
can produce a situation in the future where the choice of suppliers is much reduced which
can, in turn, affect the power balance between customers/users and suppliers through the
laws of demand and supply.

As we will discuss later (in section 4.3) businesses need to evaluate carefully how to support
suppliers on whom, they are, in some ways, dependent for their continued success. Allowing
them to fail in these situations is extremely shortsighted folly.

34
QUALITY BY DESIGN Innovation

3 INNOVATION
Your goals for this chapter are to:

• Recognise that innovation is key to human improvement and needs to be

captured in product and service offers from suppliers
• Realise that Design needs to capture innovative ideas and translate them into
specifications to guide all of the business activities
• Recognize that two of the situations driving innovation are Pull from the Market
or Push from Technological possibilities
• Realize that competitor’s actions can also spur innovation while working with
collaborators has the potential to bring new thinking
• Recognize that some innovation comes from industry disrupters who change
order winners dramatically
• Recognize ways to protect Intellectual Property from copiers who aim to benefit
without the investments that created the IP

Click here
to learn more

TAKE THE
RIGHT TRACK Give your career a head start
by studying with us. Experience the advantages
of our collaboration with major companies like
ABB, Volvo and Ericsson!

Apply by World class

www.mdh.se
15 January research

35
QUALITY BY DESIGN Innovation

All other things being equal, innovation provides the positive discrimination that we were
looking for in search of the order winning criteria. However in the innovation field more
changes fail than become market successes.

We need to distinguish between what is possible technically and what customers/users actually
want. We usually assume that what customers/users need is driven by basic requirements
for survival and safety while what they want addresses other desires, satisfaction of which
provides psychological benefit but which need not support core physical survival needs.
Innovation can also be in either or both of the product itself or the process of producing,
receiving, using, repairing / updating or replacing, as well as recycling the product. Some
of these categories also apply to service provision but not to the recycling issue. But where
do innovative ideas come from?

3.1 PULL FROM MARKET

Where a market already exists, customers/users can compare value offers from different
suppliers in their choice of who to select but there may be features in an offer from a
supplier they did not select that they might be interested in adding into the offer from their
chosen supplier. In this sense the customer is driving innovation from this supplier. This
still counts as innovation, although what is in the market already is not a newly unique
innovation. Customers/users are also very good at driving the kind of process innovation
demand that expects ‘more performance or convenience at less cost’. From the supplier’s
point of view such a pull from the market is a challenge and they still have to find the
means to deliver the innovation but if they can do this successfully the likelihood is that
the customers/users will in fact feel able to purchase the innovation they asked for. The risk
to the supplier of making the necessary changes is much reduced knowing that the cash
flow reward for innovative success is more assured.

3.2 PUSH FROM TECHNOLOGY

There are many situations where there is no current need for an innovation in product or
process but there is recognition in the supplier’s technical staff (because of their experience
and closeness to the technological developments in their expert field) that a new innovation
is possible. However customers/users are completely unaware of this and are certainly not
asking for something they probably do not understand. It is here that the risks of innovation
are at their greatest. We firstly have the technological risk that what seems possible in theory
has not yet been demonstrated in practice. This is compounded by the situation that what
can be done in practice in the laboratory under very controlled conditions may be very
difficult to scale up to full production capability.

36
QUALITY BY DESIGN Innovation

This is a particular problem in the Pharmaceutical industry where the difficulty of establishing
the effectiveness and safety of a new drug treatment takes many trials and a significant
amount of time in normal situations, and is complicated by the need to demonstrate what
the American Food and Drug Agency (FDA) establish as Current Good Manufacturing
Practice. This has the, perhaps unintended, consequence that the laboratory specifications
of ingredients for the drug may not actually be best suited for full scale production but to
try and change the specification would involve further rounds of testing and permission
seeking. Patent protection against unfair competition lasts for 20 years before the competition
is allowed to enter the market with an over the counter copy-cat drug. The process of
gaining the drug patent might use up 7 or 8 years of the 20 and so it is understandable
that making changes to deliver a small cost improvement is not worth the lost opportunity
of some peak price marketing time.

The risks of technological failure at the forefront of technology are many, even before
we consider the possibilities of market failure when customers/users do not see or accept
the supposed benefits they can obtain from the new technology. It is perhaps too old an
example in an age where communications are instant and messages are relayed at the speed
of light to our smart phones but the Fax machine was an available and reliable technological
solution to transfer hard copy communications long before customers/users bought them
in any numbers in the UK. Then the postmen went on strike and suddenly all offices and
many homes wanted a Fax to replace their missing mail deliveries. Also consider the first
Sony Walkman mobile music system. This was produced in 1979 using magnetic tapes
on a removable cassette to play pre-recorded music tapes in a handheld machine to which
headphones were attached. No customer had requested such a technology to produce music
on the move but soon the demand was exceptional. Move on a technology and we have
Apple innovating with its iPod (removing the need for the awkward and somewhat bulky
cassettes) and then music on the iPhone. However we need to note that this technological
solution also demonstrates another feature of the innovation process. This was that the
iPhone technical capability of playing music had to be complemented by the associated
innovation from Apple of the iTunes virtual music store from where the music could be
purchased and downloaded (also removing the physical distribution methods of getting the
products to the market place). This is a nice example of a symbiotic product and service
innovation, but at least they knew that there was a market for mobile music, which Sony
had already demonstrated. In this sense the iPhone and iTunes innovation was more pull
from market while the Sony Walkman was a real technology push.

The risks of being the technological pioneer are so great that it is sometimes wiser to avoid
these risks while monitoring closely what your competitors are introducing into the market
place. Once any new solution is demonstrated to be technically possible and customers/
users are showing interest, then the option might be to try and accelerate a new product

37
QUALITY BY DESIGN Innovation

development process by learning the lessons from the successful product already produced
by a competitor and try to design and engineer a similar outcome in a new product which
manages to avoid any patent protection which the pioneer was able to obtain. In some cases
it is better to buy the innovating company and its product capabilities and protections rather
than run the real innovation risks. After all, Dyson reckons that it took 15 years and over
5000 attempts before the cyclonic vacuum cleaner was initially successful. That company is
now reaping the rewards of their ingenuity and hard work but now has an ongoing battle
to keep new developments secret and to challenge the legality of the companies trying to
copy its technology without recognizing the intellectual property rights that they spend a
lot of money to defend.

In design and quality terms innovation experience suggests that the design effort can be
dramatic but is driven by the technology push argument. The quality argument will be
driven by the customers’ need for a better design solution to an issue that they recognize.
In Dyson’s case this was the loss of suction in traditional vacuum cleaners as the paper
storage bag filled with dust.

LIFE SCIENCE IN UMEÅ, SWEDEN

– YOUR CHOICE!
• 32 000 students • world class research • top class teachers
• modern campus • ranked nr 1 in Sweden by international students
• study in English

– Bachelor’s programme in Life Science

– Master’s programme in Chemistry
– Master’s programme in Molecular Biology

APPLY
NOW!

38
QUALITY BY DESIGN Innovation

3.3 DRIVE FROM COMPETITION OR BY COLLABORATION

The nature of market competition can by itself drive the innovation process. After all the
search for a new order winner suggests the need to examine all aspects of the market place
demand and supply dynamics to see if there are new possible solutions to provide that
competitive edge which will make it easier for the customers/users to accept your value
propositions. However it is often the case that existing suppliers to a market have looked
at the issues in similar ways for so long and are choosing to compete on well established
criteria that they are blind to possible new entrant offers from outside of their industry.
The classic example of this is the Swiss watch industry that was built on very precise and
innovative mechanical methods of timekeeping. While some success had been achieved in
applying electronic mechanisms to wrist watches it was not until companies coming from
an electronics background offered digital watches at much reduced prices compared to
traditional Swiss offers, that the global market fundamentally changed. The predominantly
Japanese companies had highly productive and automated production lines and deliberately
aimed for volume of sales rather than high individual profit margins. The Swiss Swatch group
had to follow this lead in reducing the costs of production through design simplification
(51 parts instead of 91), aggressive marketing and competitive price points. Other high-end
producers stayed with traditional methods but went up-market to focus on customers/users
looking for status symbols and high skill levels in the production process.

In the global aircraft business no single company has the capability or financial size to be
able to master all of the technologies involved in making an airliner. Effectively, we are very
close to having only two major world brands in Boeing and Airbus as other manufacturers
merge with the giants. No emerging companies from other parts of the world are showing
signs of out innovating or out producing the current incumbents. Yet these global giants
cannot build a complete aircraft by themselves. Instead they collaborate with a large number
of main supplier partners in engines, avionics, interior fit out and so on. While the main
brand company still carries much of the reputational risk, they are dependent on the
expertise in their partners to design the complex and interrelated product. All of the design
decisions are interconnected. The size and operational characteristics desired by the launch
partner airline will determine size, passenger capacity and mix of first, business and economy
passengers and the required levels of luxury, while on board services and distance ranges
all mean that as one parameter changes then others are also forced to change. Flight range
and fuel efficiency might be driven by airline demand or might result from a technology
push from the engine makers. Increasing the weight of any item has implications for the
power and maybe size of the required engines and so it goes on.

Aircraft also demonstrate an interesting insight into customer behaviour or maybe just
attention to detail. Ask yourself and those about you if they know who supplied the engines
on the last flight they took and I am willing to bet that the majority will not know and

39
QUALITY BY DESIGN Innovation

might not even care. They place their trust (if they think about it at all) in the airline or
even the travel agent (or their insurance company) to whom they pay their travel money.
So in this market travellers do not seem to care what is inside the product. In contrast,
think about the very clever marketing campaign in the personal computer market where for
Microsoft computers, Intel created the slogan “Intel inside” as if the customers/users could
tell (or initially care about) the difference between microchip companies with essentially
similar capability.

So we come to the point where design can be a major differentiating factor in consumer
products. For more complex industrial products it is more likely to be less visible and less
important of itself to the users of the products. However, we can argue that in the latter
case, design is even more important because of the need to be at the leading edge of all
of the technologies and the overarching need to have them properly integrated into the
complex and complete product. Even if users do not see the effects directly, the customer
company (Boeing or Airbus) totally depend on their supplier experts for their market success
and choose to work with supply partners who understand and practice the highest levels of
design and quality management.

The need for quality is real in every market however, even if customers/users are not aware
of the effort going on behind the scenes to achieve results. This means that the role of
the brand owner (Boeing or Airbus above) is to represent and ensure the targeted quality
levels, since if there is any failure from anywhere in their extended chain of suppliers the
customer will firstly, and possibly only, blame the brand company. A point we will make in
more detail later is that brand companies can never outsource the responsibility for quality
to others in the supply chain and if you are responsible for something you had better pay
attention to how it is performed and assured.

3.4 INTELLECTUAL PROPERTY (IP)

We have already used this term but we need to explore the details some more for the
design and quality world have a great interest in this. IP refers to the situation that an idea
embodied in some product or process has been created by some individual or organization
and that they should be granted the opportunity to generate some financial benefit from
it without that benefit being stolen or reduced by someone else who did not make the
creative investment. However, society generally wants to know what is new and in some ways
better than before as part of general development and to stimulate others to also innovate.
So this balance is struck by some protection of the ownership and development rights in
the property being regarded as exclusive but for a specified period of time after which the
information can be used by anyone else without reward being due to the owner of the IP.

40
QUALITY BY DESIGN Innovation

There are a number of different kinds of IP.

Patents relate to inventions of products or processes and are normally for 20 years from first
filling of the application. There are some problems for the inventor whose ideas are to be
protected. Patents apply in geographical regions of the world so if there is anticipated to
be a global demand then more areas have to be covered, thus increasing the costs. Also to
justify the patent there needs to be evidence of newness, uniqueness and the solving of a
particular problem. However in proving this capability the applier has to disclose information
about her solution in such detail as to show to others that 1) such a solution is possible and
2) that there may be another way to use this information to design a solution which the
patent application might not cover. In this way a competitor gains much of the information
that was supposed to be protected. In some cases this risk is too great and so these trade
secrets are held very closely and not shared by anyone outside of a small group of trusted
insiders. Such secrets do not have any protection in the legal system.

Copywrite applies mostly automatically (but can be applied for in some jurisdictions) to
any information written in some fashion. It is not the idea itself which is controlled but
the form of discussion of the idea. The restriction lasts for between 50 and 100 years after
the death of the original copywrite holder. Thus authors of books such as this who wished


678'<)25<2850$67(5©6'(*5((

&KDOPHUV8QLYHUVLW\RI7HFKQRORJ\FRQGXFWVUHVHDUFKDQGHGXFDWLRQLQHQJLQHHU
LQJDQGQDWXUDOVFLHQFHVDUFKLWHFWXUHWHFKQRORJ\UHODWHGPDWKHPDWLFDOVFLHQFHV
DQGQDXWLFDOVFLHQFHV%HKLQGDOOWKDW&KDOPHUVDFFRPSOLVKHVWKHDLPSHUVLVWV
IRUFRQWULEXWLQJWRDVXVWDLQDEOHIXWXUH¤ERWKQDWLRQDOO\DQGJOREDOO\
9LVLWXVRQ&KDOPHUVVHRU1H[W6WRS&KDOPHUVRQIDFHERRN

41
QUALITY BY DESIGN Innovation

to use a paragraph(s) or diagrams originally produced by another author would have to

apply for permission to use that section of the other works with due attribution of the
permission from the copywrite holder. There would normally be a payment made to the
copywrite holder to facilitate the granting of the permission to use the copied material.
In this way the copywrite holder can generate an income stream into the future while the
ideas themselves are promulgated to a wider audience.

Industrial design rights represent the external appearance of an item rather than the inherent
technology inside which may or may not be patented separately. This is a more aesthetic
part of design but no less important in marketing terms. Simple examples include the safety
pin and the BiC ballpoint pen.

A trademark represents a product or service which distinguishes its owner’s products or

services from other, possibly similar, offers. It is intended to act as a guarantee that the
good or service is real in that it comes from the correct source rather than from someone
else who is passing off an alterative offer as exactly the same and providing equal value (but
often sold at a lower price). Perhaps the most instantly recognizable trademark relates to
the Coca-Cola ribbed contour bottle. Even colours can be trademarked, for example Tiffany
Blue, Cadbury Purple and UPS Brown.

There are some general points to note about Intellectual Property. If the person inventing a
new item is employed by a business then generally the IP belongs to the business not the
individual. When one company contracts with another company to be part of a process
which creates an innovation then again the normal situation is that the company acting as
buyer is likely to claim the rights in the new IP but we need to examine this a bit more.

A business or other organization (by means of its experience and previous registration of
earlier IP) has a set of skills and capabilities that they use to enable them to trade in the
market. This is theirs in law and is called background IP. A supplier uses this background
IP as a qualifier to attract trade with a customer organization. The supplier has an interest
in developing and protecting any new IP (called foreground IP) but the earlier statement
about the buyer assuming the IP ownership rights is a problem for the supplier. We also
need to recognize that the customer might be more interested in solving a problem, or
creating some immediate advantage they have identified, by means of the new IP and once
the problem is solved or the opportunity satisfied, might have no further interest in using
the IP in any other way in other markets. The foreground IP does not therefore have the
same level of interest to the customer as to the supplier.

42
QUALITY BY DESIGN Innovation

The supplier might be in a better situation to exploit the foreground IP in the future as it
adds to their capability to serve another business request. The customer might however not
wish the supplier to use the new IP too quickly with one of the first customer’s competitors
as any advantage to the customer might be lost if the new order winner becomes easily
available to their competitors. In these cases the customer might seek to contract with the
supplier so that the foreground IP becomes the property of the supplier but the supplier is
constrained from offering it to the customer’s competitors for some agreed period of time.
The customer will also expect and contract to have continuing access to the foreground IP
for as long as they wish for no additional charge (they would regard themselves as already
having paid for it and perhaps driven the development through their identification of the
new need to be satisfied by the innovation).

This is an example of the Agency issue (Jensen and Meckling 1976). The buying customer
is acting as the Principal and contracts with the supplier who acts as Agent for the Principal
in developing the new IP. Agency theory is built on the initial position that a principal
in choosing an agent assumes that the agent will behave as would the principal and truly
represent the interests of the principal. However as we have seen in the development of the
foreground IP the interests of the customer and the supplier are not aligned in regards to
their future intentions with the new IP so it is safer to recognize this from the beginning
and contractually define desired outcomes and processes at the beginning of the process,
rather than fight about it at the end.

Even when no new IP is intended to be developed, agency theory helps understand that
when a customer and supplier relationship is present, in some cases the interests of the
agent are in fact to learn as much as possible and somehow acquire the IP of the principal
so that the former agent becomes a competitor.

In global supply chains, as we have already seen, there can actually be government supported
drives to gather IP by legitimate processes of learning through principal and agency contracts
and of course in many markets there are incentives to obtain the IP by dishonest means
in which case this is called industrial espionage. Where the protection of IP through legal
enforcement is difficult it can be very difficult for the principals to protect their IP. In such
situations the choice is not to contract with suppliers to participate in business activities.
But if this is the only way for a principal to enter a market place controlled by the same
government that wants to gain this knowledge quickly they are faced with difficult decisions
and they might have to do more to protect their trade secrets. It is true that if there is
some competitive advantage knowledge that is crucial to your future business success it is
better not to share that with anyone. Dyson engineers, for example, are not allowed to
take any business information out of their workplace or talk about their work with people
outside the company, even their families, and all are required to keep hard copy books of

43
QUALITY BY DESIGN Innovation

all of the business decisions and results which are locked away and never leave the Dyson
premises. Their competitors try however to recruit Dyson engineers in the hope that the
tacit knowledge they carry in their heads can be brought over to the new employer to help
close the innovation gaps.

Design in these environments becomes a major source of differentiation and competitive

advantage and really drives the success of the business. There is the need to design for
immediate benefit to create competitive advantage but also to try to design in such a way
that a competitor would struggle to copy the innovation (whether the IP is protected or
not). In any principal and agent relationship how much design information to share must
be carefully considered and communications carefully monitored.

None of this changes the need to design and manage the quality effort. In fact, innovative
design let down by poor quality, is the worst outcome. The customers are disappointed but
now have recognised that there are new wants they can have satisfied and the competitors
know what they have to do well to gain the new market that was created and not satisfied.

UNIVERSITY WEST
IN SWEDEN
With a University West master’s degree,
you’ll have the opportunity to gain the
skills you need to thrive - as a person
and as a professional.

44
QUALITY BY DESIGN Design for ‘X’

4 DESIGN FOR ‘X’

Your goals for this chapter are to:

• Understand the role and operation of the House of Quality in capturing the
Voice of the Customer and bringing it into the whole organization through a
cascade of interlinked designs
• Realize the spread of issues that need to be considered and possibly built into
design for production thinking and the role of standardization to aid this process
• Understand the complexities of chains of supply of parts and services along with
material logistics flows and the design challenges these bring
• Realize that packaging design is trying to accomplish many competing objectives
in one design and is becoming more challenging as society tries to reduce
plastics pollution in particular
• Recognize the many challenges of designing items that can be used and
maintained and possibly upgraded during its lifetime
• Understand the need for a much more integrative view of the design task to
delivery quality across the totality of supply chains in complex societies

4.1 DESIGN FOR FUNCTION

We now recognize that quality is important to capturing and retaining customers/users but
we have also said that sometimes customers/users do not know they want something until
they see it so what can we do to really understand what customers/users need, what might
they want and how we can persuade them that our new innovation will actually benefit
them is some ways?

For businesses that can interact closely with customers/users, they can just ask them and if
the current offer is not quite right then it can be changed. Some services are very like this
but fewer manufactured products have this luxury of rapid and reactive change. Superyachts
fall into this category where whatever the client wants they will get, even if it changes the
finish time and the cost, since this level of customization is what the future owner values
and for which (s)he is prepared to pay. Similarly bespoke suits of clothes or couture dresses
can be adapted and tailored to fit shape, style and budget. In these examples the supplier
knows as best they can that the client will pay the final bill, so to some extent the production
costs are not important.

45
QUALITY BY DESIGN Design for ‘X’

For more standard products there is a fundamental issue about who gathers information
from the customer, both about their needs and also about their degree of satisfaction with
what has been provided. In traditional western businesses the separation of functional areas
affects this in that marketing and sales regard the customer as belonging to them and design
and engineering should respond to the information provided by marketing. This raises
the issue of whether marketing and sales personnel are best able to understand what the
customers/users are saying in technical terms or indeed to translate what they are saying so
that a comparison can be made between wants and possibilities. These functions are also
suspicious of engineers who might tell the customers/users too much about the commercial
implications of a discussion thereby limiting the pricing options for sales negotiators later.

The best Japanese companies do not have these concerns and will often send teams of
engineers to live with users for some time to truly understand how the users will interact
with the products and how their product experience can be made better next time. Even
after the new product is launched some of the same engineers will go back into the market
to ask the customers/users if the design has met their requirements.

What all businesses are trying to do is to capture the voice of the customers/users as to what
they want and bring that into the business to translate that into details so that production
of the item can take place with a good chance of satisfying the customer demands.

Even without the direct interaction between designers and customers/users in the west a
process to capture the Voice of the Customer (or House of Quality) was discussed by Hauser
and Clausing 1988 and shown in simplified form in Figure 4.

Trade-offs
HOWs vs HOWs

Design Specifications
HOWs
WHYs
Customer Ranking of
Priority

Customer Wants Relationship Matrix

Competitors
WHATs WHATs vs HOWs
WHATs vs WHYs

Assessment & Targets

HOW MUCHs

Figure 4 House of Quality (simplified) – The Voice of the Customer

46
QUALITY BY DESIGN Design for ‘X’

So, whether by engineers or marketers, we have to talk to existing or prospective customers/

users to understand (in their own terms) what they know they want, or indeed what they
might be persuaded to try, as a new product. This information is enhanced by asking for a
priority ranking of what is ‘absolutely necessary’ through to ‘nice to have’ criteria and this
capturing of their voice (called in figure 4 the WHATs) is then brought to the designers and
engineers to translate into a set of HOWs for each of the desired features to be produced.
For example, if we were designing a laptop computer the customer might have identified that
it is to be robust so that if dropped, nothing would be broken. The engineers might then
think that they could do this by making the casing from a metallic alloy or an engineered
polymer. These HOWs enter into the matrix for further evaluation. Please note that choice
of materials becomes ever more important when we consider the use of scarce resources.

As other details are added to deal with other criteria, we begin to get into the nature of
trade-offs. This is where if we make one choice which is the best decision against one criteria
we often find that is less than optimal for another criteria. The triangle at the top of the
figure, which represents the trade-offs, represents the roof of the house of quality with the
other rectangles likened to the exploded walls of the house.

47
QUALITY BY DESIGN Design for ‘X’

The roof section shows the interconnections between each of the HOWs and allows us
to see if they work together or in opposition to each other and in this way we can get
closer to a solution that makes the best possible compromises between different kinds
of possible solutions.

Another major value input from customers/users is their ranking of our product (should it
exist) and competitors’ offers. This comparison, along with their priority of WANTs, gives
us a ranking of WHATs against WHYs so that we can see how big the gap is between us
and the competition and therefore what we should focus on in closing the gap, or indeed
in opening up a new gap with a new order winner.

The final rectangle allows us to both define our technical measurement requirements to
deliver the HOWs and also to establish how much it will cost to buy or make the item to
these requirements.

Once we have evaluated all of the interactions and trade-offs to provide a best possible
solution, we can then believe that we have captured the Voice of the Customer. We can
always go back to perhaps a focus group of typical customers/users to ask them if they think
our proposed solution would actually meet their requirements. However, if marketing are
being protective of ‘their’ customers/users and set up the meeting without technical support
being available to the customer contact people, one can wonder if some of the conversations
will be properly informed as to why something customers/users’ desire is not feasible for a
certain reason or at a certain time.

Once there is approval in principle then the voice of the customer, as defined after the
House of Quality exercise, is then passed to the design team to put the details into product
characteristics which then get cascaded down to the next level of detail in quality features
and measurements and associated production process requirements and capabilities. Of
course if the associated item specifications do not allow a zero defects result with currently
available process capabilities, the overall process might need to reverse and changes to
design specifications will be needed. The final cascade might be to inform the Make or
Buy decision about where the item is to be produced. That is, will we make it ourselves
or will we contract with an external supplier to provide the item. Either way there needs
to be complete details of every aspect of production and subsequent operation created and
then quality of conformance fits into place to ensure the output achieved is the same as
the designed intention.

This cascade into more and more detail is called Quality Function Deployment (QFD) and
is intended to carry the voice of the customers/users deeply and consistently into the total
organization. When it works, then products are produced in a quality assured way with
little need to revisit decisions as more information emerges (often when it is very expensive
to change or very late in a planning process for a new product launch).

48
QUALITY BY DESIGN Design for ‘X’

So far we have talked about meeting customers/users’ expectations but how about delighting
customers/users? The logic of this is that if we give the customers/users more than they
expected they will be delighted and see us as providing more than their specifications,
maybe even more value? This is another tricky area to decide on since delight as seen by one
customer might be seen as wasteful to another. In addition, the one who is less impressed
with the extras might then ask is she paying for the extras even although she had not asked
for them? So one hotel visitor is delighted by the handwritten note from the manager and
the bottle of pillow spray on their turned downed bed sheets while the second does not
like the perfume of the spray and wonders if they could not just have taken a little off the
room rate. Here again, evidence that quality is in the eye of the beholder!

Nevertheless many organizations see providing a little bit of delight as part of their offer to
their customers/users and a small inducement to return for more goods or services.

4.2 DESIGN FOR PRODUCTION

One of the crucial decisions taken by manufacturers is the degree to which they will allow
their customers/users to have a choice from a range of product offers. Even pure services
do not offer full ranges of capability as it is simply too expensive to have paid for capacity
which is not used continuously enough. So lawyers might choose to support clients in civil
or criminal cases or stay with house buying, wills or family matters. For the service business
it is often a factor of how many qualified staff that can be supported by flows of business,
for a given population around their location.

Some products can be designed to be essentially the same regardless of who (or indeed where
located) is the customer, while others (our superyacht for example) is completely bespoke
and will never ever be repeated in exactly the same way. So the extremes are complete
standardization or uniquely bespoke.

Standardization has many benefits and was initiated by the need to move away from a
bespoke approach to allow for increased volume of output. The argument is to design once
and produce many times and in that way spread the design cost over many units. This is
the economic justification for mass production. For bespoke items some of the design costs
cannot be spread over many units and therefore the unit cost of the unique item has to be
recovered in its selling price that must therefore be higher than its somewhat, equivalent
volume produced item.

49
QUALITY BY DESIGN Design for ‘X’

The key initial moves in early industrialization were to specify standards for materials, tools,
mechanisms and so on. The design of standardized and repeatable nut and bolt fastenings
allowed for metallic assemblies to be constructed and from these early efforts global
standards institutes have evolved whose purpose is to approve and manage production of
items and processes so that if a designer needs a certain function performed in the design
they do not have to start from nothing each time. The design short circuit is to specify an
approved standard so that everyone in the business environment knows precisely what the
thing is and what its properties should be. Over time some of these standards have become
measures against which items need to be proved to be compliant. That can be fossil fuelled
automotive engines or the chemical composition of a generic drug or food additive. Most
parts of human endeavour are affected by standards to a greater or lesser degree.

So the business decision will be to conform to all applicable international standards where
they must and vary to some extent for uniqueness in a marketplace, but by how much?

Some products can be designed and fixed for some time without change, which makes
for efficient design and probably production while others will have some standard parts
but will leave other parts unspecified until decided in response to customer choice. Of
course the third way is to essentially design standard parts or sub-assemblies but allow the
customer to choose a combination of the basic building blocks to create something that is

INNOVATIVE
LIKE YOU.
If you’re hoping for a truly modern education, one where you’re
encouraged to speak your mind and to think long-term, both when
it comes to your own future and the future of the planet. Then the
University of Gothenburg is the place for you.

Study a Master’s programme in Gothenburg, Sweden | www.gu.se/education

50
QUALITY BY DESIGN Design for ‘X’

more personalized to their requirements but still allows the producer to produce in enough
volume to allow for a reduced cost per unit. This is the logic of the Lego brick.

If a factory is already in operation and designing a new product there are some constraints
which need to be considered because of the existing investments which are likely to be in
machines to produce, move or store materials. It makes sense to try and recover a financial
contribution from these existing investments. The accountants argue that these investments
are costs that are sunk, that is the money has already been spent and this money should
not be factored into more up to date decisions but nevertheless there is a human tendency
to try and (almost retrospectively) justify spending the money the first time. So it might be
that a perfume bottling operation might try and design new bottles so that they will still
fit along the conveyors and guides even if they look quite different in overall shape so as
to avoid stopping the factory to replace kilometres of material handling equipment. Other
factors for different products might be space requirements for ovens or paint spray booths.

It is not even some constraints inside the factory that need to be thought about. When
the Airbus A380 airliner was designed its wingspan was so wide that some of its intended
airports did not have enough space to park the airliner to allow the loading and off loading
of passengers at the docks. Another example would be ocean freight where the size and
capacity of vessels grew bigger than the ability of the Panama Canal to allow them passage
through and another wider channel had to be created.

Existing machines might have capacity limitations so that a new design can only be produced
if we also buy new machinery. Electronic chip fabricating plant experience this problem so
that as they find ways to etch more and more circuits onto chips of silicon then the ability
to define the lithography line to be separate but closer and closer together is a process
technology that drives chip design developments.

Most factory produced complex products are as a result of a mass of choreographed flows of
materials, people and machines in which each of the work stations along the lines operates
repetitively to produce their part of the whole. Ideally each of these workstations is allotted
the same amount of time to complete their cycle and when this happens the factory beats
to a heartbeat, called the Takt time, to deliver just what the customer wants in that day.
It is therefore required that the designers consider how long each production or assembly
cycle will take so that the flow can be maintained without interruption or delay.

As well as flow considerations and balancing the allocated work to each station it is important
to recognize the effects of bottlenecks, pinch points or capacity constraints. This is informed
by the thinking of Cox and Goldratt 1988 into the Theory of Constraints. This argument
is that there is at least one but usually not too many activities in a complex system (like

51
QUALITY BY DESIGN Design for ‘X’

a factory) that completely determines what output can be achieved. The capacity of the
constraint limits what the factory can produce. Any production lost at the constraint is lost
forever and extra output produced away from the constraint is a mirage since the constraint
can only support its own output. This theory therefore aims to manage the constraint and
make all the flows leading up to it and away from it, supportive of getting the most through
the constraint. For designers to change things it makes sense to save time or increase output
at the constraint but there is not the same return for clever design away from the constraint.
It is dynamic however since continuous improvement effort should be focused on the first
constraint and if this can be improved such that this item is no longer the constraint then
all that happens is that the focus moves elsewhere to the next constraint. This is a form of
continuous improvement of processes.

All operations require time to set up and to get them ready and fully productive. In itself
this is an incentive to spread the cost of set up over many repeated cycles of uninterrupted
operation. This is the logic of mass production. Variety of required output types breaks this
logic and forces the system to incur changeover and setup costs for the next operational
run. In this way variety of the product types works against the efficiency of the process.
However, perhaps for reasons of allowed workstation time, it might be sensible to reduce
the time and cost of changeovers. Part of the Just in Time production logic is to so engineer
changeovers as not to be an economic cost of managing in small numbers and for variety
in output. So we can talk of batch sizes or production runs of single items as the change
over costs are so reduced as to be unimportant.

Sometimes the costs involved in the changeovers are due to different kinds of materials
needed for the different products. For example in painting items the sequence in which
the paint is used affects the degree to which total system cleaning is required. So paints are
sprayed in sequences running from light to dark which is more tolerant of slight residues
being left from the cleaning process. Different qualities of raw materials can also affect the
best sequence of change over where cutting might be better from softer to harder materials
and so on. Even physical shape can be a factor when working from a bar or a cylinder of
metals to reform some feedstock into new shapes.

The design thinking to enable best quality of output also needs to recognize that what
has been specified must also be measured and tested so there is a need to design the
inspection processes. This will include measuring and controlling input materials as well
as transformation processes but it might also need to be considerate of how measuring
instruments can actually be applied to the dimensions they have to measure. A feature of
digital design software systems and computer screens is the ability to see in virtual 3D the
artifact to see how parts interact or interfere with each other and in some cases digitally
walk through the overall system in the digital model. This is the digital twin where the

52
QUALITY BY DESIGN Design for ‘X’

artifact can be manipulated and modified much easier in its IT form than in the real world
physical situation. In this way one can for example, sense if maintenance workers will be
able to gain access to apparently difficult corners or tight spaces. Data interactions can also
be visualized in this way so that less tangible products can also be visualised. Another of
the beauties of digitalization of the design process is that once the design is approved, the
resulting digital code (which the computer aided design system has created) can be sent to
the machines that are also digitally controlled so that production can begin without any
need for human transcription thus avoiding introducing any new errors. Even better, this
same code can then be used by digitally controlled measuring systems, again avoiding any
transcription errors being introduced. This is also true regardless of where manufacturing
takes place so that a supplier to whom production is outsourced can use the same data
files, assuming they have compatible equipment. So the design that allows for zero error
production is aided by zero error data transcription and machine controls.

Many products (and indeed many services) are made up of interconnecting and interdependent
parts and if joined together these are called sub-assemblies, which are then aggregated into
complete assembled products or services. This raises another need, to design for assembly.
Another of the uses of the normal distribution effects are in assembly processes where things
have to fit together or one inside of another, or precisely aligned alongside one another so
that they can be efficiently joined. So holes and rods for example need to have specification

53
QUALITY BY DESIGN Design for ‘X’

tolerances such that when put together they can slide together (and sometimes apart again)
without a clash of dimensions. Sometimes this is deliberately designed (when movement after
assembly is undesirable) so that one part needs to be heated or cooled enough to change
the dimensions temporarily until a fit is achieved, then when everything returns to normal
temperature the parts are almost fused together.

Joining can be done by fastening together using such things as nuts and bolts, rivets, buttons
and zips, sewing stitches and so on. The attraction of such fastenings is that it can be a two
way process. That is, if required, the process can be reversed so that disassembly is possible for
reasons of repair, partial replacement to repair damage or to upgrade with improved designs.

Some assembly methods are mechanical in that the joining mechanisms are designed into each
part which when brought together with some little force to overcome a spring effect, ‘click’
together and form a strong enough connection to allow the complete assembly to function
reliably. Many simple polymer based items work this way. The difficulty however is that it
is much more difficult to reverse this process since the clicking mechanism might be inside
the product so access needs to be designed in to allow the unclicking process to be possible.

Other assembly processes are irreversible and involve some processes of atom to atom joining
of the materials of separate parts so that the spaces in between the joining parts become
fused solidly together. This might be by glueing the surfaces together or melting a third
metallic product into the spaces in between (solder or welding). Again this makes disassembly
much more difficult. These factors become even more important when we think about re-
cycling issues shortly. As we shall see one of the difficulties is to know what materials we
are working with and how to disassemble them so the designers also have to think about
producing a way of identifying the materials they are using so that some time later other
people will know how to disassemble and re-cycle them. Polymers are very challenging
in this sense and metals are often a mix of a variety of elements in different proportions
so this information needs to be coded and attached in some way to the items so that the
information can be retrieved, perhaps years later.

Disassembly of services is a less meaningful concept although legal contracts are often
constructed using standard clauses or paragraphs the concepts contained in which, can be
reused but for pure services it is not sensible to think about this.

With all of the potential variety in many product ranges there is a need to spread design
effort over as many repeat orders of similar items and even over large proportions of similar
products. The automotive companies have long worked on this principle, which they call
design platforms, even producing largely the same vehicles identified under the badges of
the different brands owned by the same group of companies.

54
QUALITY BY DESIGN Design for ‘X’

For example as of early 2019 Volkswagon group had in it’s A class platform of compact
family cars, the following: Audi A3, Audi Q3, Audi TT, VW Golf, VW Jetta, VW Eos,
VW Tiguan, VW Scirocco, SEAT Leon, SEAT Toledo, SEAT Altea and Skoda Octavio.

Examples from the Ford company (and its sometime affiliates) for its C1 platform included:
C-Max, Focus, Kuga, Grand C-Max, Haima 3 (in China), Lincoln MKC, Mazda Premacy,
Mazda 3, Land Rover Freelander and the Volvos C30, C70, S40 V40 and V50 before they
sold the company to the Chinese, Zhejiang Geely Holding Group in 2010.

The logic of platform engineering of this type is that the design effort goes in under the
skin of the vehicle in things like the floorpan for the chassis, front and rear axles, steering
systems, suspensions, and some of the features of the engines and power distribution systems.
These will be designed with some adjustments possible to allow for some changes in the
driving ‘feel’, but the design investment is spread over a much greater number of vehicles.
By varying features more visible to customers/users the companies are offering variety to
customers/users while allowing some benefits of standardization and volume to improve their
production efficiency and reduce production costs. Once you add in variations like colours,
wheels, trims and accessories the number of combinations of all of the possible selections,
the customer gets much closer to their unique vehicle but each one is still very recognizably
one of the similar family. Customer apparent variety and producer higher efficiency makes
for economic benefit but a high degree of sameness across brands.

In the online world the same logic of design platform is a product in itself where individuals
or companies can buy (or access as a service) an existing web design to be tailored to
individual requirements but without needing to design the web pages themselves.

A complementary approach to these design choices is to recognize the value of international

standardization in making global trade more efficient while ensuring customer satisfaction.
This applies to items, complete products and operational and managerial processes.

For example, the International Labor Organisation (see www.ilo.org) is a United Nations
Agency that is tasked to promote rights at work, encourage decent employment opportunities,
enhance social protection and strengthen dialogue on work-related issues. In effect they are
promoting the quality of working life for workers and thus, they would argue, their employers.

Ideally all employers around the world would adhere to the principles established in the
ILO in managing their workforces. However for some organisations moving to low labour
cost areas part of the attraction is to allow the employment of people under conditions far
away from these standards. Too often this means that people are working in conditions that
are not safe and under managerial controls that are far from the normal in the countries in

55
QUALITY BY DESIGN Design for ‘X’

which their output is sold. Unfortunately customers/users often are blind or uninterested in
these issues until they are brought to their attention through a fatal accident in a garment
factory in Bangladesh or by worker suicides in factories in China producing electronic goods
for western customers/users.

The global standards to ensure that all trading partners understand what each other is talking
about is managed by GS1 (www.gs1.org) and evolved from the first bar code agreements
to become the basis of inter organisational business language. The system works on a level
by level categorisation of items and is crucial in retail, healthcare and logistics for example
so that data can be communicated efficiently and reliably while avoiding the same human
transcription errors we talked of before. This standardization enables global trade by making
sure buyers and sellers are talking about the same things and are properly evaluating some
of the important costs of doing business across international borders.

Many national and international organizations have particular standards for their own
specialist field and professionals in these fields will be expected to follow these requirements.

More generally, the International Organization For Standardization (see www.ISO.org) works
globally to create and approve documents of specifications, guidelines and characteristics
to help ensure that materials, products, processes and services are to best available practice.

56
QUALITY BY DESIGN Design for ‘X’

They work in the same way as all of these standards in that they provide support and a
form of shorthand that organizations working to these standards have met the requirements
contained in the standards and that a buyer can have comfort in their purchase from such
an approved supplier. Often the proof of conformance requires an inspection process from
an approved inspection organization. The ISO 9000 family of standards is the home for
standards related to Quality Management but there are other families of standards for a huge
variety of business settings. At the time of writing there are over 3200 standards relating
to Quality Management.

Quality Prizes also set standards for others to aspire to although in all these cases the winners
will likely have been on a quality journey for many years.
The Deming Prize in Japan (see https://www.juse.or.jp/deming_en/award/03.html) was the
first and the current major criteria categories demonstrate the range and reach into the
organization of quality issues they look to evaluate. The high level criteria start from top
management’s objectives, strategies and leadership, through the utilization and implementation
of Total Quality Management thinking and approaches and looks for tangible effects of
TQM on business results.

The American Baldridge Quality Award was an attempt by American government to persuade
industry to catch up with the Japanese practices in this area and is influenced by similar
thinking. (see https://www.nist.gov/baldrige/publications/baldrige-excellence-framework).
They start with Leadership; Strategy; Customers/users; Measurement, analysis, and knowledge
management; Workforce; Operations and Results. What is also clear is that the underpinning
principles demonstrates why we can really talk of TOTAL quality since they believe that high
quality businesses exhibit the following key values: Systems perspective; Visionary leadership;
Customer-focused excellence; Valuing people; Organizational learning and agility; Focus on
success; Managing for innovation; Management by fact; Societal contributions; Ethics and
transparency and Delivering value and results.

In Europe the equivalent approach is organized by EFQM (see http://www.efqm.org) and

in a similar way they emphasise (in no particular order) the following key concepts: Leading
with vision, inspiration and integrity; Managing with agility; Succeeding through the talent of
people; Sustaining outstanding results; Adding value for customers/users; Creating a sustainable
future; Developing organizational capability and Harnessing creativity and innovation.

The importance of people in all of these areas is very obvious. We have already highlighted
that in services the customer contact person is key and has to be trained and motivated
to deliver the service as the provider intended but even in non customer contact areas of
manufacturing it is clear that if the people are not equally trained and motivated, these
systems cannot deliver the level of quality performance they should have been designed to do.

57
QUALITY BY DESIGN Design for ‘X’

As we have indicated, services also need design effort but their inherent intangibility means
that some of the standardization issues are more difficult to apply. Of course standardization
of processes is largely what some of the quality standardization approaches are all about but
standardizing the more interactive aspects of a user/provider experience is very difficult. This
is made more complicated in that the purer the service the more the provider and the users
are jointly deciding what is to be delivered in the service and are in effect co-designing the
service encounter and so the skills and capability of the service provider is the key design
input from the provider side.

4.3 DESIGN FOR SUPPLY CHAIN

Very few, if any, sophisticated products can be produced by individual businesses acting
alone. For example there can be 30000 individual parts in a passenger car and 6 million in a
jumbo jet, most of which will be produced by suppliers to the main company who choose to
make certain parts and sub-assemblies themselves and buy the rest from carefully selected and
managed suppliers in a supply chain. This is because, as the technology advances, it becomes
more and more difficult to continue to invest in equipment and intellectual resources to
stay at the leading edge of developments. Businesses therefore have a fundamental decision
to take on each of these technological areas which is whether they will keep investing and
retain a capability internal to their own organization (the make or do option) or to source
this capability from an organization outside their business boundaries who is specialized
and up to date in this area (the buy or trade option).

This process has been aided by the increase in world trade, which resulted from reductions
in barriers to trade through removal, or reductions, in tariffs and other indirect ways of
limiting the ease of transferring goods and money across international borders. Global trade
and Foreign Direct Investment (FDI) (where businesses set up subsidiary operations inside
other countries), allowed trade to grow by 35 times between 1980 and 2010. China joined
the World Trade Organization in 2001 and has since become the factory of the world and
the second largest economy in the process. (see www.wto.org).

Global trade has allowed an increasing specialization process to become established in

those product markets where there is a massive global demand. These include automotive,
electronics, chemicals, some clothing sectors and pharmaceuticals. This is reinforced as
the developing nations joining in the trade develop their own economies and generate
disposable income and a rising middle class of consumers of their own. So supply chains
are increasingly global, which also means the transportation links between suppliers and
their customers/users have to span the globe since product assemblers and final customers/
users are located all over the world.

58
QUALITY BY DESIGN Design for ‘X’

The business decision about make or do internally in some ways simplifies things for the
design and quality management processes since their internal users and operators of the
specifications and procedures can be assumed to be trained and motivated to do the right
thing as they are all parts of the same organization and will succeed or fail together. It is
also easy for them to ask for clarifications or slight modifications, since all of the interrelated
decisions can be considered together. However these assumptions do not apply in the same
way for the buy or trade option. By definition, this option means we are choosing to work
with another business we do not own or control so we cannot assume any alignment of
interests and motivation happens simply because we have placed a purchase order on their
organization to deliver some good or service. We have to work to build understanding
and commitment through clear, open and two-way communications. We also need to be
very clear that all of our design and quality process specifications are completely clear and
understood (and we might need to spend some effort proving this to our satisfaction), before
we allow them to move into full production volume and speed. We also need to remember
our discussions about leakage of IP from the Principal to the Agent.

So far we have been talking as if we are the experts in what we wish to buy but the
discussion above indicated that often we are not just buying a supplier’s time to produce
to our designs. Rather, we go to a supplier because they are the experts, so rather than

WE WILL TURN YOUR CV

INTO AN OPPORTUNITY
OF A LIFETIME

Do you like cars? Would you like to be a part of a successful brand?

Send us your CV on
As a constructer at ŠKODA AUTO you will put great things in motion. Things that will
www.employerforlife.com
ease everyday lives of people all around Send us your CV. We will give it an entirely
new new dimension.

59
QUALITY BY DESIGN Design for ‘X’

making their product to our specifications we need to communicate what we wish their
design to deliver and then let them apply their expertise to design, specify, produce and
quality control their part of the whole product so that all we have to do is to accept it into
our factory for assembly into our larger product.

The design task in this scenario changes dramatically from providing all of the detail, to
supplying functional specifications and what is called corner engineering. In other words, we
specify what the supplier’s part or sub-assembly has to do, under what operational conditions,
to produce which results and to allow what maintenance and upgrading possibilities. The
corner engineering refers to where the supplied part has to touch and fit into other parts
of the larger product, how it is to be connected to power supplies and instrumentation and
the range of people who have to access it for operational or maintenance purposes. We are
then dependent on the supplier to manage their own design processes to use their expertise
to produce a solution that meets our minimum requirement (even better if they can be
innovative) then they need to design and operate their own quality processes to ensure a fit
for purpose delivery to us so that we do not need to do anything further to check on their
quality performance. The level of responsibility thus transferred to the supplier means that
they are less a subordinate player and much more an equal partner in the overall process.
These suppliers are really an extension of our own business and critically important for
our future success. We need to manage them as such and help motivate them to see us
as very important to their future success and in so doing reduce our concerns about any
lack of motivation on their part. However, we can never forget they are a legally separate
business with other customers/users who may become more important to them. We also
need to be careful of leakage of intellectual property from our business to them but they
will also be aware of the threat of such a flow in the opposite direction. This suggests a
very close partnering type of relationship in which we are mutually bound together by joint
considerations and co-destiny expectations so that it feels like we are the same business (but
still legally separate entities).

For all decisions to source from an external market we need to recognize that we can be
increasing our dependency on the outside business continuing to be the best partner for
us but we are often going to feel safer if they are not the only business who has a current
contract to deliver this kind of good or service, so that the risk of a failure by one supplier
does not put at risk our whole operation.

It is for this reason that there is an attraction to dual source (that is, have two suppliers
for each critical commodity group) rather than be wholly dependent on just one (the
single source choice). Of course, sometimes a critical supplier may be the only source of
the particular expertise (through patent protection perhaps) so the buyer organization has
no option but to buy. However, the buyer might look to encourage some other business to

60
QUALITY BY DESIGN Design for ‘X’

enter the market to reduce the monopoly risk they perceive. If the business is dual sourcing
then it is important to ensure that the parts produced by each supplier are completely
interchangeable so that if one fails then supply can be switched to the other, without
major interruption. Toyota go even further than this by expecting each of the suppliers to
continuously innovate and share the benefits both with Toyota and the other supplier so that
no difference in the supplied parts is created in the short term. They then use the innovation
success rate to modify the relative size and benefit of the purchase orders between the two
suppliers. In this way they benefit from security of supply and continuous innovation and
build long term commitments from and to their cooperative suppliers, who behave as if
they are almost members of the same business family. Of course Toyota is a very big and
important buyer and not all buying organizations will be able to influence (or control?)
their suppliers in this way.

Global supply chains (or more accurately networks) of connected and interdependent
separate businesses, depend on free trade approaches to allow the materials to cross national
borders without delays for customs and documentation clearances. Here again the use of
digital data from the design system can be communicated directly to the operations and
inspection machinery used in the suppliers’ plants and for those more intimately involved in
sub-assembly design we can gather the digital data from their processes to provide assurance
of their performance levels.

The need for this kind of awareness of the supply chain interactions and new dependencies
reinforces the view that the design decisions need to involve a wide group of people both
internally and with external partners so that all of the decision ripple effects are considered
at the beginning of the design process in order that quality has a chance of being delivered
across all of the organizational and national boundaries.

Thinking in terms of chains or networks of interacting business entities raises the issue of
the materials moving between them and so the role of logistics comes into focus. We have a
number of logistical flows to consider. We can have raw materials or sub-assemblies flowing
into our business, materials being managed and moved through our business and finished
goods being transported through retail channels or direct to customers/users. Increasingly
we also have to design and manage the reverse process of getting product back from the
customer at the end of its first life so that the re-cycling processes can start.

In services it might be the flow or scheduling or location of the service provider people
which have to be managed so ensure service is possible when the user is present.

61
QUALITY BY DESIGN Design for ‘X’

In all physical logistics systems there are considerations of transfer in bulk or in particular
discrete items. This is often a factor determined by the stage in the manufacturing stage we
are looking at. For example raw materials of minerals, oil and gas, water, grain will usually
be transported by pipeline, bulk tanker ships and in smaller (but still large) quantities by
ships, canal barges and road and rail tankers. At the end of the manufacturing process
our finished goods will be packaged into discrete customer focused orders that need to be
delivered, potentially across a number of distribution channels.

Anything that can be done to avoid having to build, assemble or distribute finished product
to store in anticipating of demand is useful in postponing for as long as possible, the need
for a specific choice to be made. Much better if this can be driven by an actual customer
order so there is some higher likelihood that the customer will actually buy.

Physical logistics operates by a separation between unique items and bulk transfer by the
use of efficient (in terms of unit cost of movement) bulk methods between major hubs with
more specific collection and distribution of the more unique and individual parts in more
flexible but smaller capacity modes of transport. Hub to hub transfer is by bulk means,
for example, from a port to an inland distribution centre. At the hub individual packages
inbound might be stored for a while and then many gathered together to fill a transport
container for onward shipment using a bulk transfer solution to another hub. The second

Develop the tools we need for Life Science

Masters Degree in Bioinformatics

Bioinformatics is the
exciting field where biology,
computer science, and
mathematics meet.

We solve problems from

biology and medicine using
methods and tools from
computer science and
mathematics.

Read more about this and our other international masters degree programmes at www.uu.se/master

62
QUALITY BY DESIGN Design for ‘X’

hub takes the inward bulk and breaks it back into its separate items for onward transfer by
a more flexible method like smaller road vehicles or package delivery companies. Visually
the hubs can be likened to the hubs of a bicycle wheel and the many local distribution
routes spanning out from the hubs are like the spokes of the bicycle wheel. So logistics
people talk about hub and spoke logistics. Of course at the second hub they are doing the
same kind of collection and building bulk for materials moving in the opposite direction,
so the system overall is trying to manage the flows back and forward. The reality however
is that often it is more difficult to fill the bulk containers on the return journey and so the
systems often have different unit transportation costs depending on direction as well as on
weights and volumes being moved.

There is little for our product design team to work on in the logistics system (but a complex
task for the logistics warehousing design team to work on) but when it comes to returns for
reasons of failure, updating or end of life, one issue is the identification of materials and
design for disassembly so that when end of first life products are returned for re-cycling
they can be routed in the appropriate directions for further action.

One consideration with logistics is the amount of environmental impact that each of
the modes of transport (road, rail, shipping, air travel and pipeline) and their required
infrastructure and land use, especially fixed routes and hub terminals, have across the range of
issues, including energy consumption, air and water pollution (which includes the transport
of invasive species in disposable water ballast in ships across the globe), noise, the effect
of major accidents and spillages and the impact on the habitat of various species of fauna
and flora. However in product design terms the issues are more to do with the forms of
packaging to be used for the different transport modes that we will discuss shortly.

Since the Japanese taught us how important it was to minimize waste of resources through
Just in Time (JIT) operation many businesses have followed down this path but of course
reducing spare resources in the supply chain makes it inherently less robust and the impacts
of any disruptions to the flows along JIT supply lines means that businesses can run out
of materials very quickly.

The earthquake and tsunami that hit Japan in 2011 stopped Toyota’s production lines in
Japan for around two months while in North America the Toyota production dropped
30% for six months due to shortages of around 150 of the key components sourced from
Japan and since then they have moved away from the purest forms of JIT by having more
suppliers for critical parts, requiring their suppliers to hold more stock and redesigning
their products so that there are more common parts produced in multiple supply chains.
They also try and make different regions more self-contained so that geographical disasters
cannot impact globally dispersed supply chains.

63
QUALITY BY DESIGN Design for ‘X’

For the design function therefore we need to be refocusing on the platform thinking we
already discussed while our quality concerns increase as we become more dependent on
multiple suppliers. This can be exacerbated by using the same wide specification limits we
argued for before as a means to avoid creating rejects but now we can find different suppliers
operating inside the specification limits but located in different regions of the distribution
so that their parts are less interchangeable. The design and quality teams therefore need
to work harder to ensure real conformance of the quality output and compatibility of the
produced items between the multiple suppliers. As a further insurance against interruptions
there might be a need to look for more local suppliers in each of our trading regions and
select and develop them to be truly capable and reliable supply partners into the future.
Some of the economic benefits of JIT inventory and supply base reductions are deliberately
traded away to mitigate the risks of any supply chain disruptions.

4.4 DESIGN FOR RISK AND SECURITY

We have discussed above some aspects of risks in supply chains which can affect design
decisions which might make supply chains more complex to mitigate risk of interruptions.
There is also a design issue around the need for physical security of our products as they
travel along logistical distribution systems. So far we have put a lot of effort into producing
the best design we can at the required quality level and we now have good product at the
end of the production line but we cannot put them into the distribution system without
having already designed and produced some physical protection around the items. Now
the challenge is to consider the factors in the environment which can adversely affect the
quality of the items during delivery to the next customer along the chain, whether another
production stage or the final consumer. Transportation means movement and handling of
items, many of which can be damaged by careless movement or handling. So temperature
during transportation, either too hot or too cold can impact quality; physical damage
through dropping or careless stacking of boxes causing crush problems, radiation effects
(either out of the item or into the item from outside sources) can impact quality and when
any item of value is in transit or storage there is always a concern about corrupt behaviour
by insiders or attack or theft by outsiders. For food products, especially moving into retail
situations, there is always a concern about possible deliberate contaminations by those
seeking to extort the retailer or to simply damage consumers for whatever twisted ends of
the perpetrators. At a simpler level designing caps for liquid containers that are child proof
is a really important safety feature.

Some containers have to be designed to be effectively cleaned between tasks so that some
shipping holds might transport grain and then a liquid on the next trip so need to be
able to be cleaned completely in between as quickly as possible but also in such a manner
that any people working in the container cannot be trapped or injured and can operate
in fume free environments.

64
QUALITY BY DESIGN Design for ‘X’

The nature of bulk containers has simplified matters dramatically since the container offers
physical protection to disparate packages stored internally and a degree of robustness against
attack by thieves. Of course containers can transport not just goods for trade but bombs,
illegal drugs, trafficked people or illegal immigrants so another security aspect is to design
systems to ensure that contents are controlled at the loading stage and are not changed
from the time of loading until arrival at a distant port. In addition, their progress across
the globe and in variable weather and port traffic situations needs to be tracked across the
world as well so as to coordinate unloading at ports or airports (for import and export tax
collection and insurance) and to allow planning for onward transfer to their destinations.

Many products will also depend on computer software for their operational roles or for
communications to condition monitoring processes and GPS location and item identification
purposes (perhaps for trade taxation) using Radio Frequency Identification (RFID) tags
of some sort so designers need to have experts from these areas of expertise contribute
to overall designs. Increasingly such products are being shown to have vulnerabilities to
malicious access and external control of software for nefarious purposes. So design for cyber
security is also a requirement.

Copenhagen
Master of Excellence cultural studies
Copenhagen Master of Excellence are
two-year master degrees taught in English
at one of Europe’s leading universities religious studies

Come to Copenhagen - and aspire!

Apply now at science

www.come.ku.dk

65
QUALITY BY DESIGN Design for ‘X’

4.5 DESIGN OF PACKAGING FOR DISTRIBUTION AND DISPLAY

Having considered the route from concept through to distribution we also need to consider
how to protect some items in the retail situation from damage through handling but also
to present the items for marketing and sales. The current solution seems overly dependent
on hard plastics in bubble packs that appears to solve these two problems but they carry a
number of disadvantages.

The plastic bubble packs firmly hold the items in place so they can hang on rails perhaps and
can display the contents well. They are however often very difficult to open needing sharp
implements with attendant risks for the unwary, physically impaired or clumsy customer.
They might even be impossible to open for the young or infirm. Even when open the
problem has just increased since the packaging now has no purpose and must be disposed
of. However, their protective strength means they are difficult to compact for disposal and
of course we will need to consider how to get rid of this unwanted packaging. This problem
is exacerbated when we use other paper or plastic products as padding around items in
larger containers, often made of engineered cardboard. The cardboard package containers
are often design masterpieces as complicated shapes are created using flat sheets cut and
folded like industrial origami, to fit the product items. This packaging material must also
be disposed of. The problem is made worse by the need to pack the logistics containers
and vehicles efficiently so some pack sizes are standardized to maximize the packing of the
container but often this means we are paying to ship the air round about our product as
well as pay for the weight of our items. Also, in order to reduce the number of package
size variations that the distributors have to manage, they hold stock of boxes to suit the
biggest items to be dispatched and fill them with packing materials when smaller items
are to be sent. The final customers/users now have to find a way to dispose of all of these
materials in societies that are becoming more concerned about what to do with them to
avoid sending them to landfill.

The problem of plastic waste is increasingly visible and politically charged around the planet
as the waste does not degrade quickly and enters the food chain to harm ocean animals
in particular. Paper packaging does degrade so is less of a challenge but does not offer the
same levels of physical protection as plastic based designs. In re-cycling terms we also have
the problem of knowing exactly what form of polymer has been used in the packaging so
that we can take appropriate action in the waste recovery process. Polystyrene packaging
can be formed to closely fit around items and fit securely into the outer container and can
absorb major shock impacts so offers great protection, but is itself challenging to reduce in
size for re-cycling convenience.

Societies around the world are increasingly thinking of the quality of our environment and
potential environmental damage though the use of these materials so we have additional
elements to consider in our design considerations.

66
QUALITY BY DESIGN Design for ‘X’

4.6 DESIGN FOR DELIVERY

Of course packaging design is a factor in the consideration of how users access the product
in order to put it into use when they receive it. Here instructions become an issue for
designers. Paper based instruction booklets can become large for goods traded into many
countries as language specific versions are needed, so increasingly paper booklets are replaced
by online instructions for downloading if desired by the customer but this is at the customers/
users’ cost not the sellers so simplifies and reduces costs for the seller. Also, YouTube has
allowed many companies and more individuals to demonstrate how to unpack, assemble
and operate a variety of equipment. This speaks to the issues in consumer markets but
for some items and many customers/users, delivery is also about installation, especially if
industrial strength foundations and power supplies are required which will also often require
officially recognized approvals to be obtained. For some sellers the installation is also a
means to build customer support and satisfaction so they will employ their own installation
agents to protect the seller’s reputation and also obtain feedback from customers/users that
is less likely to be captured and relayed by an external agent. The installation agents can
also provide some customer training in the equipment’s operation to further contribute to
customer satisfaction. Complicated installations also benefit from training provided by the
equipment seller to their installation agents.

This option also simplifies the processes of accessing the items plus removing old equipment
for re-cycling or other disposal and removing the packaging materials. Since the costs of
the installation in these circumstance falls to the seller there is another incentive to design
simpler and lower cost solutions, to reduce the cost impact.

4.7 DESIGN FOR USE AND SUSTAINABILITY

We have discussed the need to design for function but we also need to think about the
needs of the customer and the product during its lifetime. Attitudes have changed in this
regard over time as a result of the Japanese view of customer satisfaction over time. It
was once seen as smart to design a product with a limited life so that even in saturated
market places repeat business would ensue because the product would have failed and so a
replacement product could be sold to the same customer. However a minimum period of
operation needed to be guaranteed to provide a minimum level of comfort to customers/
users that any failure during the guarantee period would allow for repair or replacement
at the seller’s expense. This thinking further suggested that if possible the product should
be designed with the planned obsolescence date just longer than the guarantee period. The
Japanese however listened to the marketing view that the cost of finding a new customer
greatly exceeds the cost of keeping a satisfied customer and so the manufacturers not only
increased the time to failure design criteria but also provided a degree of customer support
such that repair or replacement costs would still fall to the supplier.

67
QUALITY BY DESIGN Design for ‘X’

In effect they redefined what quality meant in these product areas (driven again by automotive
examples). In this way, the customers/users experienced high reliability in avoiding failure
costs while the incentive on the supplier to avoid failure costs put increased pressure on
designing the item to be very reliable. Here again we have two order winning criteria of
customer satisfaction. That is, higher quality performance for longer and more reliability such
that 1 or 2 year guarantees look to be poor comparisons to effectively lifetime guarantees.
In addition, by putting more emphasis on designing for extended operations they were
reducing their own costs while any competitors driven to offer the same level of customer
service but without the refocusing of the design effort were hit by two increased costs in
marketing and production.

So we can design to increase the operational continuity of the item but many need to be
maintained over their lifetime. Many products need to have regular inspections to check for
wear and might need cleaning, oiling or greasing to keep moving parts from seizing together.
Design therefore has to consider what operational intervals are suitable between required
maintenance episodes on a planned basis and also to find ways to identify and ideally avoid
the need to recover from a breakdown. So condition monitoring systems have to be designed
and the data produced by them analyzed to inform maintenance requirements. For example
the condition of aero engines on aircraft are subject to flying times and operating conditions
(hot and cold climate and ice or dust damage) but without monitoring these parameters it
can be difficult to anticipate how much repair work will be needed without stripping down
the engine for physical inspection. As a result, planning for how long an engine needs to
be off the wing for refurbishment or repair is very difficult. What currently happens is that
as the airliner crosses the airport perimeter, data is transmitted from the engine monitoring
systems to ground data processers so that some analysis of the likely scope of the required
maintenance time is available to plan the required work.

Again as more engines are managed by the supplier on a ‘Power by the Hour’ basis (where
the supplier is responsible for ensuring that whenever the airline needs an aircraft to fly
then there will always be engines available), this shifts the costs of failure and maintenance
to the supplier and creates another incentive to design engines that are more reliable and
cheaper to maintain. The customer has a fixed cost contract that avoids them carrying stocks
of repair parts and the removes the organizational challenges of managing the maintenance
operations by themselves.

Sustainability considerations mean we need to think carefully about the source of the energy
used in production, operations and aspects of the logistical factors in the supply chain and
move away from dependence on fossils fuels. This is complicated in moves to electric vehicles
when the energy source for the charging stations might still be largely based around coal
and gas. Nuclear power is coming back into consideration because of its negligible CO2

68
QUALITY BY DESIGN Design for ‘X’

emissions but of course the potential for disaster and the need to manage the spent fuel
for thousands of years after use need to be factored into the sustainability equations. The
avoidance of excessive depletion of natural resources also affects decisions here and will be
covered in the next section.

Many technologically advanced products, especially if their intended lifetime is measured

in years rather than months, need to have designed in ways of upgrading the technologies
embedded in the product at possibly frequent intervals. One only needs to consider how
often upgrades and bug fixes on our electronic products occur to understand some of the
issues. However given an internet connection such upgrades can happen easily and relatively
quickly if the forward upgrade path has been considered and designed in from the start.
Too often however customers/users who are early adopters of new technology products can
be abandoned as a new upgrade makes their original investment completely redundant. For
more physically defined products the problems are more severe. Warships for example can
have lifetimes measured in decades for the superstructure of the vessel but the electronics,
war fighting and defense equipment and the engines will need to be modified or changed
on much shorter timescales. Engines are a particular problem since often the ship’s structure
will be built up around the engines and any replacement or major repair might involve
cutting the vessel open to take out and replace the old systems and then join the parts back
together again. Even just performing maintenance without cutting the vessel in half might
be a problem in allowing humans to get into tight spaces if this has not been thought
about at the design stage.

4.8 DESIGN FOR END OF FIRST LIFE AND FUTURE POSSIBILITIES

With our planet having a finite total of currently recoverable resources, then any designs
which assume that a replacement can be provided by going back to the extraction process to
dig more raw materials out of the ground, cannot be sustained into the future. Indeed the
common definition of sustainability is meeting the needs of the present without compromising
the ability of future generations to meet theirs. So society needs to consider how to re-use
these materials that have already had much processing done on them to create the first
product, but which have reached the end of their first useful lifetime in their current form.

The worst thing that can happen is that waste products are simply put into landfill and
forgotten. We are rapidly running out of space on the planet to do this in areas close to
concentrations of populations that create the waste. In addition, many products contain
rare metals that are poisonous to human life and leaving such items in the ground allows
rainwater to leech the metals out of the product and if this then flows into groundwater
it can contaminate the drinking water cycle. Lead in electronic solder connections is, for
example, very harmful to developing babies’ brains, so if the ground water is polluted and
ends up in drinking water to make up baby feeds, then real damage will result.

69
QUALITY BY DESIGN Design for ‘X’

We therefore have a hierarchy of approaches from most desirable to least, to cover the ‘re-X’
possibilities. In Europe this set of approaches is captured under the heading of Zero Waste
(see https://zerowasteeurope.eu/2019/05/a-zero-waste-hierarchy-for-europe/).

In the UK, the government Department of Environment, Food and Rural Affairs uses a
simplified diagram which takes the form of an inverted triangle with the biggest impact
coming from Prevention (that is avoiding or at least minimising using resources, perhaps
by designing long life into products), Preparing for re-use, repair or re-purposing for
the next life, Re-cycling (parts and components or material recovery), Recovery of any
value or indeed energy and if all else fails then Disposal (perhaps to landfill once any
toxins have been removed.)

Re-use. This is the best form of second life solution since all that happens is that a second
customer takes ownership or use of the product without needing any new input of resources,
apart from putting customer 1 in touch with customer 2. This can be done through a third
party intermediary. So mobile phones that are no longer leading edge in one market can be
used in another market where there is less money or choice. Donations of eye glasses for use
in poorer countries is one example. There are no design implications here and identification
is less of a problem since eyeglasses often will have their prescription details marked on the
legs of the glasses, so can be sorted for particular new users.

Brain power By 2020, wind could provide one-tenth of our planet’s

electricity needs. Already today, SKF’s innovative know-
how is crucial to running a large proportion of the
world’s wind turbines.
Up to 25 % of the generating costs relate to mainte-
nance. These can be reduced dramatically thanks to our
systems for on-line condition monitoring and automatic
lubrication. We help make it more economical to create
cleaner, cheaper energy out of thin air.
By sharing our experience, expertise, and creativity,
industries can boost performance beyond expectations.
Therefore we need the best employees who can
meet this challenge!

The Power of Knowledge Engineering

Plug into The Power of Knowledge Engineering.

Visit us at www.skf.com/knowledge

70
QUALITY BY DESIGN Design for ‘X’

Re-purpose. This again does not fundamentally change the product it simply uses it in a
different way or for a different purpose. One example might be to convert a jar of fruit
preserve into the cover for a light bulb or a cocktail shaker? One example I heard discussed
by employees of Nokia (when they were the largest mobile phone company in the world) was
to recognize that many end of first life phones still had cameras, GPS location capabilities
and were communicators and so their idea was to re-purpose the phones to be used to
support people with dementia who often forget where they were going and do not recognize
where they are. It would not take many changes to make it possible for third parties or
family members to check on where their relative was through the GPS locator and talk to
them to aid their journey or to alert first responder assistance. The camera could also be
used to help location identification. Some element of new design might however be needed
to make this a robust solution to a real problem in society.

Re-cycle. If neither of these first two approaches works then we are into attempts to recover
some of the value that was incorporated in the first product. So we need to be able to
disassemble the product to recover and re-use individual components or sub-assemblies
that still have useful life in them so that they can be sent back to the beginning of another
assembly process to be incorporated into new products. This can extend back to the base
elements from which the product was constructed so that plastics and metals can be separated
from other parts and brought back to physical conditions in which they can be processed
into new artifacts.

Recover energy. If the previous Rs cannot be made to work effectively or economically

enough, it might be worth burning the item to generate some heat for industrial processing
or space heating but here again the possible pollution (this time from the chimney stack
rather than the ground water) is a real concern and processes will be needed to clean up
the smoke before it is spread over the landscape.

Identification of component parts and materials is an issue we have mentioned before as is

the need to consider the design of assembly and disassembly options in the original product
design for the re-X to be possible but we have a fundamental issue in deciding who should
pay for additional efforts. Additional design efforts will cost the producer more initially but
might be cost justified if the re-X task falls to the producer but each end of the product
lifecycle requires fundamentally different skills sets.

Quality is a difficult issue as well. We already know that much effort is required to
produce a quality product and get it to the first customer. However, unless we have full life
environmental and operating condition monitoring, we will have no idea what the quality
level of the product is at the end of its utility to the first customer. So before any re-X is
possible we might have to perform extensive quality testing before evaluating which re-X
path makes sense.

71
QUALITY BY DESIGN Design for ‘X’

Although manufacturers are increasing aware of their societal responsibilities for protection
of the environment and sustainability there will always be a concern that by accepting the
increased costs of operating ethically in sustainability terms any of their competitors who
ignore these concerns can have a cost advantage in the competitive marketplace. As a result
governments have realized that they need to place obligations on producers and users to
cooperate to provide a benefit for all of the local society.

In Europe, for example, there is the Waste Electrical and Electronic Equipment Directive
(WEEE) that places an obligation on the manufacturers or distributers of a large variety of
goods containing electrical or electronic components and connections to pay for the re-cycling
of their equipment. They can do this themselves but more likely they pay others to perform
the re-cycling. Local governments have targets in terms of tonnages of re-cycling achieved
per year and per citizen. The RoHS directive was to avoid designing such equipment with
lead and other toxic materials incorporated into them, so as to remove the pollution threat
at source. (See references for details of both of these.)

Globalization has made this process more difficult as it has been seen to be acceptable for
the polluting nations to simply ship their waste materials to poorer countries where workers
break down the products but without proper controls (in developed nation terms) over the
working conditions and environmental controls so that the health of the workers involved
is very likely being adversely affected.

This is hardly a planetary solution that is in any way sustainable. For example, for many
years many western countries shipped their waste plastics to China to be re-cycled there since
there was a demand for re-cycled plastics to be turned into new products in the factory of
the world. However, in 2017 China banned this trade and as a result the countries, which
formerly exported their waste problem now have to find new ways of managing the issue. Of
course other countries have been tempted to fill the role of China but the real solution must
be a combination of avoiding creating the waste in the first place (so a design choice to use
more recyclable materials, for example multi-use glass containers, possibly with returnable
deposits charged on first purchase) or finding better ways to make the re-X work, (so back
to our design for packaging discussion earlier).

72
QUALITY BY DESIGN Design for ‘X’

Customer’s input?

General Issues Impacting decisions Function Existing Technological Capabilities

Current Equipment
Finance
People skills
Production
Equipment Suppliers information
Global Standards
Global Markets
Produce to our design
Transportation
Government Demands Supply Chain Innovate and Design
Supplier Capability

Trade Flows Physical protection

Security Software

modification by someone
Threats

Environment Distribution
Mitigations
Design for X Packaging Display and Sales

Accuracy
Access and Installation
Format Delivery Old product and packaging removal
Timeliness Data Availability
Design for Sustainability
Understanding?
Reliability
Use and
Sustainability Maintainability

Upgrading

Material ID

Disassembly
End of First
Life New Processes

Re-design Processes and Systems

Figure 5 Design For ‘X’

Overall we have seen here that the design function is too important to be left exclusively
to design experts whose training has been in only one or two sets of expertise. Currently
the author knows of no design software solution that is capable of gathering data from all
of these disparate areas of focus.

While a lot of the recent discussion here has focused on products and less, necessarily, on
services, it is still worth thinking this through much more carefully.

As figure 5 indicates there is an enormous range of considerations and one can sympathize
with the designer sitting in front of her Computer Aided Design computer trying to think
through all of these links. For although we have discussed this as a serial process we have
already recognized that design is a set of branching decision trees in which paths have to be
re-traced and decisions changed. The worst thing that can happen is to travel along many
of these branches only to find out near the end of the process that we have come to a point
where we can go no further but we still do not have an overall solution. We then have to

73
QUALITY BY DESIGN Design for ‘X’

reverse our journey across the tree and choose an alternative branch and start all over again.
This is essentially what happened when the RoHS directives were introduced when many
electronic products had to be scrapped and replacements designed and produced on a very
tight timescale so as to keep the market supplied.

Even when some of these actions are locally determined the global market place often requires
everyone to take action if they want to trade in that locality. This is another example of
the global nature of business.

If we can find no individual capable of covering all of this range of decision areas and our
computer systems have as yet not been designed to have this capability, what can we do?
We are in effect forced to see design as a much more integrative process in which groups
of people across the whole supply chain need to be involved in providing meaningful data,
evaluating interim decisions and evaluating possible solutions. So design (especially when
we are dependent on the expertise of our suppliers) becomes a much more collegiate process
which requires a collaborative and consultative management style and set of processes. These
are skills sets that, in the UK at least, have not normally been trained into the technologists
designing for function and production.

Imagine if you will the business that can bring this together, or the software company that
can draw all of these data sources together, so that a full ‘what if ’ analysis can be done in
real time and the effect it would have on their business prospects and the quality of the
resulting output they could design and deliver!

74
QUALITY BY DESIGN Randomness and Design for Quality

5 RANDOMNESS AND
DESIGN FOR QUALITY
Your goals for this chapter are to:

• Recognize that variation is present in most human activities and is both a

problem and a possible mechanism we can use to allow quality to be designed
into products and services and delivered in practice
• Realize that a defect is something which lies outside of a defined zone of
acceptable outcomes and the designer is the one who defines this zone based on
stated or inferred expectations of the target customers/users
• Understand the interaction between design limits and process capability
and how we can design using this information to both increase quality and
reduce production costs
• Recognize that some mathematical and statistical understanding is needed but
can be gained with a little effort (and that hopefully this chapter makes the
learning more achievable for those less confident in this area)
• Understand the thinking behind Robust Design and how it helps make
zero defects possible

Trust and responsibility

NNE and Pharmaplan have joined forces to create – You have to be proactive and open-minded as a
NNE Pharmaplan, the world’s leading engineering newcomer and make it clear to your colleagues what
and consultancy company focused entirely on the you are able to cope. The pharmaceutical field is new
pharma and biotech industries. to me. But busy as they are, most of my colleagues
find the time to teach me, and they also trust me.
Inés Aréizaga Esteva (Spain), 25 years old Even though it was a bit hard at first, I can feel over
Education: Chemical Engineer time that I am beginning to be taken seriously and
that my contribution is appreciated.

NNE Pharmaplan is the world’s leading engineering and consultancy company

focused entirely on the pharma and biotech industries. We employ more than
1500 people worldwide and offer global reach and local knowledge along with
our all-encompassing list of services. nnepharmaplan.com

75
QUALITY BY DESIGN Randomness and Design for Quality

5.1 THE NATURE OF NATURAL AND HUMAN MADE PROCESSES

Very many populations of things in the natural world demonstrate a range of values that
approximate to the Normal or Gaussian distribution that is represented by a readily recognized
bell shape. This means that in Figure 6 we would expect all of the actual population values
to be found in the space bounded by the normal distribution curve and the x-axis. For
example, persons’ heights and IQs, the results of applying a test to a number of items or
people, and so on.

The normal distribution has a number of very useful features that we can apply to the design
and quality issues. Firstly, the area enclosed below the bell shaped curve and the x-axis is
1 which allows us to think of the curve as a probability distribution where the likelihood
of having a result in a particular range of locations on the x-axis scale is given by the area
under the curve between these nominated locations.

The curve is equally distributed on either side of its central location or mean value known
by the Greek letter mu, usually indicated by the symbol μ.

The other measure is the amount by which the distribution is spread around the mean
value, or in statistical language, the standard deviation from the mean. This is denoted by
another Greek letter sigma, σ.

0.4

0.3

0.2 34.1% 34.1%

0.1
2.1% 2.1%
0.1% 13.6% 13.6% 0.1%
0.0
-3σ -2σ -1σ 0 1σ 2σ 3σ
Figure 6 The Normal Distribution

Looking at Figure 6 we can note that 95.4 % of the population is located between -2σ and
+2σ or to describe it a different way – we would expect to see a result from this population
lying between -2σ and +2σ distance from the mean value, 95.4 times out of every 100 trials.
Now let us look at the two tails of the distribution. We can see that there is a possibility of
getting a value between -2σ and -3σ as well as between 2σ and +3σ, a total of 4.2 times
out of every 100 trials Obviously this number only makes sense in repeated trials of 100
at a time since we can get 4 or 5 as a value but not 4.2.

76
QUALITY BY DESIGN Randomness and Design for Quality

In terms of how we use the distribution these two tails become very important. If we think
about the tail on the right to illustrate this we can say that the probability is that in 100
trials we would expect that approximately twice we would get a result in this region of the
figure. However the probability of getting this result increases if it actually came from a
different distribution of values in which the mean value had moved to the right along the
scale, shown by the new curve in the diagram, distribution B.

0.4

0.3 Original distribution A ‘New’ distribution B?

0.2 34.1% 34.1%

0.1
2.1% 2.1%
0.1% 13.6% 13.6% 0.1%
0.0
-3σ -2σ -1σ 0 1σ 2σ 3σ

Result location
Figure 7 The Normal Distribution with different mean location value

So a result in either of the tails can be interpreted in two ways. Firstly we can believe
that the result has come from the initial distribution A and is to be expected, not often,
but nevertheless predictable (2.1% of the time). The second possibility is that the result is
because we are actually looking at a distribution which has changed its position (moved
to the right in Figure 7) and so we need to change our belief that the result comes from
distribution A and in fact is part of distribution B. These two possibilities may in reality be
correct or wrong and we might not be sure at the time of the test but only realize afterwards.
However, as we shall see in discussions about quality control, we need to make decisions
about whether to accept or reject a test finding based on this probabilistic information.
This information is used in testing different beliefs or hypotheses.

Let us try and explain the two possibilities. Let us start with the belief that distribution A
is correct. In statistical language this is the null hypothesis (usually indicated as H0) and
our result has occurred as shown. If we think that the true distribution is B (that is, we
are rejecting the null hypothesis that distribution A is correct) then we can be making an
error of Type I, which is rejecting the null hypothesis when it is actually the correct belief.
(This is also called a false positive). In our example the chance of us doing this is 2.1%.

If we look at our result and think that it is quite possible that it has come from distribution
A (the null hypothesis) when the reality is that it has come from distribution B (called H1
in hypothesis testing discussions) then we are making a Type II error which is to accept
the null hypothesis when it is in fact wrong. (Called a false negative).

77
QUALITY BY DESIGN Randomness and Design for Quality

If for example we were trying to control the level of quality of a product leaving our factory
by applying tests at the end of the line and just before shipping the product to the customer,
we can think of distribution A as the range of acceptable good products and distribution
B as representing those which were not acceptable. (The reality of the situation is more
complicated because the distributions overlap.) In this case the type I error means that we
reject the null hypothesis and we throw it in the scrap bin, when the result is actually a good
product. The type I error suggests we are scrapping something that is actually good and this
is also called the Producer’s risk as the costs for the producer are increased immediately. A
type II error means that what is actually a bad product (since it comes from distribution
B) but has been accepted as if it comes from distribution A, and that it will be shipped
to the customer who then finds out it is not a good product. This is called the consumer’s
risk since the impact is felt by the customer first.

A key message from this discussion is that when we are operating close to the tails of the
normal distribution we need to be very careful in interpreting the results of our statistical tests.

We also need to remember that as well as the location of the distribution, that is the value
of the mean μ, we also need to recognize the other key parameter, sigma σ, which measures
the degree by which the distribution spreads out around the mean. We can create the same

This e-book
is made with SETASIGN
SetaPDF

PDF components for PHP developers

www.setasign.com

78
QUALITY BY DESIGN Randomness and Design for Quality

kinds of errors if we are working with a distribution that has changed its shape dramatically
from the original. As we shall see later that means that when we use these properties to
control our quality performance we need to measure both μ and σ to see if either or indeed
both values have changed from their original situations.

So why is this important? Rather than dealing with two populations or distributions businesses
are facing at least three. The first is the uncertainty about what customers/users’ need or
want and the definitions of these can cover a spread of values, creating a distribution of
needs and wants.

The second is that even when we understand what we need to supply to satisfy this range
of customer needs, all processes to deliver these items or services are themselves subject
to variations around some target value. These variations become even more of a problem
if people are involved in the process since we all have different capabilities, experience,
understanding, motivations and attention to details depending on how we feel at any
particular time. So we have a distribution of capabilities.

The third problem is that the way in which we measure the actual output from a production
process also generates a set of different distributions depending on the technical accuracy
possible; stability of the mechanisms in the face of changing physical conditions of
temperature, vibration, lighting, power supplies, and so on; as well as the ease of use by
our variable human operators.

Variations are inherent in all processes and especially ones involving humans. We need to
recognize this and build our own systems of specification, measurement and control to
mitigate the effects of variations or to compensate in some way for them when they occur.
This is the challenge that faces the design activity.

5.2 DEALING WITH IMPRECISIONS AND VARIATIONS

Given the recognition that anything we try to do in business is subject to the effects of
probability distributions, we are beginning to realize that the design activity is crucial
in providing the means to live with and profit from having a full understanding and
implementation of good practice to avoid the worst results and so design things that these
random factors cannot cause major problems.

Now is the time to define what we mean when we discuss the possibly of creating defective
products or outcomes, or in the shorthand version - defects.

79
QUALITY BY DESIGN Randomness and Design for Quality

A defect is something that does not meet expectations or requirements. In the business
world it refers to an outcome that does not fall in what is defined as the acceptable range
of outcomes from a process. The word defined is the important one here. We acknowledge
that customer expectations are not represented by single points on a scale, rather they form
a distribution of values, and if the actual results occur anywhere within that range then
the customer should be satisfied. So another way of thinking about this is that good or
acceptable quality is inside the limits defined by the design activity and everything that falls
outside these limits is by this definition, a failure to meet requirements, that is, it is defined
as a failure or a defect. So ideally the design activity needs to have information that allows
them to understand the parameters of what customers/users see as acceptable results so that
they can set the design tolerance to provide the appropriate range of acceptable values. We
will return to this issue shortly.

Quality, in the sense of something that meets specifications, is in this sense an occurrence,
which falls inside of the defined limits while ‘unquality’, or rejects/defects are results that
fall outside of the defined limits. So while many processes are inherently subject to random
fluctuations and produce results with their own probability distributions of actual values
falling in particular parts of our measurement scale, the design activity recognizes this but
forces the definition of good and bad by reference to two key points on the scale. Informed
by the properties of equal distribution of the normal curve around the mean value, we define
an Upper Specification Limit (USL) and Lower Specification Limit (LSL). The gap between
these two values is the design tolerance. Any result lying between these two values is by
definition good or acceptable and everything outside of these values is a reject or a defect.

The design activity is by this process defining what quality is in practice.

5.3 PROCESS CAPABILITY AND REJECTS

We now need to examine the second of the distributions we identified in 5.1 above, that
is the range of values that a process is capable of producing. Most processes to produce a
desired output follow the normal distribution logic. They are subject to so many influences,
which are individually small but collectively mean that the process is not able to produce
a precise outcome (even if it were desired and even if it could be measured).

We already know something about the properties of the normal distribution. It is defined
by the mean value of the centre of the distribution and the value of sigma to indicate by
how much the distribution spreads around the central value. So our production processes
produce output values according to the probability of their occurrence that are distributed
according to our normal distribution, bell shaped curve. But quality, we have just defined, is
determined by where that actual value lies according to our two point values of USL and LSL.

80
QUALITY BY DESIGN Randomness and Design for Quality

Design
Tolerance

Rejects /Defects

Design
Tolerance

Rejects /Defects

B
Figure 8 The Interaction of design tolerance with process capability

Figure 8 shows two situations to show examples of how the design tolerance limits have
effects which depend on how distributed (size of sigma) is the actual production distribution.

Diagram A in figure 8 shows a situation where the design tolerance is too small for this
production process as we are going to create a large number of rejects because of the areas
under the curve which lie outside of the limit lines. Diagram B shows that if we could
extend the limit lines to create a wider specification of acceptable values then the areas in the
tails of the distributions are much smaller and therefore we will produce fewer rejects. Note
however that in both diagrams rejects will always be produced because of the interactions
of the design tolerance and the spread of both output value distributions. If you were the
manager in charge of either of these two production processes you would not be happy
since you are always going to produce a number of rejects. Because of these two shapes (one
driven by a decision about what customers/users’ want and the other by what the production
processes can actually deliver) we can argue that neither of these processes is really capable
of satisfying the design standards even although figure B is the better of the two.

What then can we do? We could increase the size of the design tolerance but this might
create problems for some customers/users because of the increased allowance we would then
be building into what the customers/users will receive. Alternatively we need to look for a
more precise distribution, that is, one with a much smaller value of sigma.

81
QUALITY BY DESIGN Randomness and Design for Quality

Please also note that so far we have only looked at the same distribution being matched
up with different design tolerance values. If we keep the design tolerance and vary the
distribution we need to remember that the distribution is fully specified by the two values
of mean and sigma. We therefore need to look at what happens if the value of the mean
changes (or in other words where on the x-axis the centre of the distribution is located)
and also whether the distribution changes its shape over time, (that is if sigma increases).

The measures we then calculate give us an understanding of the process capability (location
and shape) of the distribution.

Remember that, as shown in Figure 6, that the normal distribution is centred on μ and that
the range between +3σ and -3σ away from μ, contain 99.8% of the whole population. These
relationships allow us to define the basic process capability measure of Cp. This is defined
as (USL-LSL)/6σ or in words, design tolerance divided by the spread of the distribution.

Sharp Minds - Bright Ideas!

Employees at FOSS Analytical A/S are living proof of the company value - First - using The Family owned FOSS group is
new inventions to make dedicated solutions for our customers. With sharp minds and the world leader as supplier of
cross functional teamwork, we constantly strive to develop new unique products - dedicated, high-tech analytical
Would you like to join our team? solutions which measure and
control the quality and produc-
FOSS works diligently with innovation and development as basis for its growth. It is tion of agricultural, food, phar-
reflected in the fact that more than 200 of the 1200 employees in FOSS work with Re- maceutical and chemical produ-
search & Development in Scandinavia and USA. Engineers at FOSS work in production, cts. Main activities are initiated
development and marketing, within a wide range of different fields, i.e. Chemistry, from Denmark, Sweden and USA
Electronics, Mechanics, Software, Optics, Microbiology, Chemometrics. with headquarters domiciled in
Hillerød, DK. The products are
We offer marketed globally by 23 sales
A challenging job in an international and innovative company that is leading in its field. You will get the companies and an extensive net
opportunity to work with the most advanced technology together with highly skilled colleagues. of distributors. In line with
the corevalue to be ‘First’, the
Read more about FOSS at www.foss.dk - or go directly to our student site www.foss.dk/sharpminds where
company intends to expand
you can learn more about your possibilities of working together with us on projects, your thesis etc.
its market position.

Dedicated Analytical Solutions

FOSS
Slangerupgade 69
3400 Hillerød
Tel. +45 70103370

www.foss.dk

82
QUALITY BY DESIGN Randomness and Design for Quality

Design
Tolerance

A
Cp = 1

Design Design Design

Tolerance Tolerance Tolerance

B C D
Cpk > 1.33 Cpk > 1.33 Cpk > 1.33
Longer production run

Figure 9 Process capabaility measures Cp and Cpk

In diagram A of figure 9 we look at the situation where we just have a capable process in
that if it stays centred where it is and does not change its shape then we will not produce
any defects/ rejects. (In reality, there will always be a very small possibility of a result
which is further away than +3 sigma or -3 sigma from the mean, and still be part of the
distribution, but we usually ignore that.)

As the production manager we are likely still to worry about having a process capability of
only 1 since if anything changes then the reject rate will increase.

To measure how much of a safety margin we can give the production manager, we define
another measure called Cpk that works with the design specification limits to find out which
value is the smaller. So if we calculate (USL – μ)/3σ as well as the equivalent measure on
the other side of the mean (μ-LSL)/3σ and take the smaller one we have Cpk. Note that
we are only dividing by 3σ since we are only looking at half of the distribution at a time.

This calculation tells us how close our distribution is likely to come to the specification
limits. If we then monitor what is actually happening to the distribution we will get a
warning of danger and can stop the process to reset it and get it back into statistical control.

83
QUALITY BY DESIGN Randomness and Design for Quality

Diagram B in Figure 9 shows a very capable distribution Cpk>1.33 which starts in the
centre of the design tolerance between USL and LSL. It can therefore change its location
and its shape without us running into immediate danger of creating rejects. Diagram C
shows a movement in location to the right and an increased spread, but we can still avoid
rejects. Diagram C makes use of a high Cpk as well as other knowledge that says that for
this process operation the location value only moves in one direction. For example, if we
were putting glue on an item by dispensing it through a nozzle (like we were squeezing
toothpaste) then over time the orifice in the dispenser (hole in the toothpaste tube) gets
bigger as the passage of material wears away some of the orifice. The volume of glue dispensed
(value of μ) increases over time. Setting the production process at the low size and allowing
wear to move the mean value to the increased sizes allows the production manager to avoid
rejects and also minimizes the lost time of stopping the process to reset the mean value. We
therefore assure quality and increase production efficiency at the same time.

In practice, it is things like the tool wear example which cause the location of a distribution
to move while general increases in variation, process machine maintenance issues, temperatures
and humidity, human variation in the operators and other similar factors, which tend to
affect the spread, but usually over a longer timescale.

This discussion highlights the possibility that by managing the two separate processes of setting
design specifications and measuring and choosing a process with the best process capability
characteristics, we can get to the situation where the ideal of Zero Defects is a real possibility.

Please visit the web page listed below to see a simulation

of the effects of different values of Cp and Cpk to get a
better feeling for the situations described above.

https://elsmar.com/Cp_vs_Cpk.html

We will talk about the processes and need for quality control shortly but this section has
emphasized that we cannot control quality into a situation. We must firstly design the
situation and its systems to make it possible to create quality and then use parts of quality
control to make sure that what was designed to be the required quality is actually managed
well enough so as to ensure that it happens in actual operations.

Please also recognize that in chapter 4 we discussed Design for ‘X’ where x can be substituted
by a title for all processes used in the organization. So we come to the core of this book
that Design is the most important activity after finding and understanding customers/users
and their needs and wants. Sometimes the sequence is as stated here especially in a market
pull innovation situation while in the technology push innovation the sequence is reversed.
Design still sets all of the quality parameters that we need to monitor and control.

84
QUALITY BY DESIGN Randomness and Design for Quality

5.4 ROBUST DESIGN OF MANUFACTURED GOODS

One of the Japanese quality gurus was Genichi Taguchi who made three important
contributions to quality thinking and practice. (Taguchi et al 1999). Most of this thinking
applies to products and processes, while services are less likely to consider these issues because
of the problems of measuring some of the people variables.

The first was that any variation from an ideal solution in manufacturing creates costs to
society in terms of waste of resources and the problems caused by imprecision. In effect,
this argues against the discussion we have just had about having high Cpk values since in
Taguchi’s view the tolerance limits must be set too wide and therefore they increase the cost
to society. However, in a different way this also supports a point we will return to which is
that the search for perfection is ongoing and so we should progressively reduce the tolerance
limits through continuous improvement efforts while still innovating to obtain even more
precise processes and thus still benefit from a high Cpk but in a reducing gap between the
upper and lower design specification limits. So the overall cost to society reduces while still
ensuring a zero defect outcome.

The second contribution lies in his belief in the power of the designer to so design items in
order that factors outwith the designer’s control cannot affect quality. The argument relates
to the causes of variation we highlighted in increasing values of sigma where many random
fluctuations in temperatures, vibrations, employee attention and so on combine to increase
the spread of outcomes from the process. His suggestion was that the designers could work
to reduce the impact of these factors (which are largely uncontrollable) through a process
of Robust Design. The design that results is effectively removed from the influence of these
factors and is more robust in ensuring a quality of output.

His third contribution is in the processes around the statistical design of experiments to
identify these random factors whose influence has to be removed during the design process.

The subtitle of the above book says it all ‘How to Boost Quality while Reducing Costs & Time
to Market’. Quality thinking of this type is not only about making manufacturing more
effective in creating good output it also does it in ways which reduce the amount of resources
needed to create the output and at the same time does it faster than the competition and
so brings the product to market sooner so that they obtain a sales advantage as well. Truly
such design thinking can contribute much to business success.

85
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

6 QUALITY CONTROL,
IMPROVEMENT AND
BUSINESS IMPACT
Your goals for this chapter are to:

• Realize that even if the design allows for good quality we still need to measure
how the processes are producing so that we can be sure that they are conforming
to the design specifications and through them to customer requirements
• Understand that part of the conformance quality processes are to minimize the
gaps identified in the SERVQUAL model which, while designed for service
quality, applies as well to more physical products
• Recognize the goal of quality control to monitor actual performance so that we
can take action to prevent rejects being created and how control charts built
around our normal distribution help this activity
• Understand the nature and powerful impact of continuous improvement
thinking by harnessing the ideas of the people most involved in process
operations and providing tools of analysis and brainstorming to use the PDCA
repetitive improvement cycle
• Recognize the multiple approaches and advice from US and Japanese quality
gurus who argued for a much more integrative approach to Total Quality
Management TQM
• Realize how quality capability changes the nature of market competition in
favour of the business who understands it and implements it well. When used as
an order winner it rapidly becomes a qualifier and then you need to be sure you
are doing quality properly and reducing your costs as well

6.1 QUALITY OF CONFORMANCE

We have discussed how we can gather information to inform the design requirements
gathered from the market as market pull (in chapter 4) or generated internally as an
innovative, technology push (in chapter 3) so for now we will assume that that has been
done correctly and we have performed a design task which has created the opportunities
to produce quality outputs. Now we need to recognize the truism that quality cannot be
any better than the design decisions that created the specification limits and the associated
processes selected by their process capabilities.

86
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

In order to do this we need to consider how to measure the actual output of the various
processes that create the output. We do this so that we can identify if the processes are
failing to meet the specified values and therefore putting our output quality and customer
satisfaction at risk. We are trying to avoid a situation where there is a gap between the
designed values and the actual values. In other words we are measuring the extent to which
there is a gap between the actual performance and the target. Put another way, is the output
performance conforming to the designed specifications?

So far we have been talking as if the only processes that need to be designed in this way are
physical product producing types but services have also to be designed. The same issues of
customer requirements need to be identified and the process performance capabilities need
to be measured and aligned with the service requirements. What is different, and it is a huge
difference, is the involvement of humans in the service delivery process. Humans are usually
much more variable in their performance range than most manufacturing processes so we
need to recognize this and allow for it in our design decisions and operational processes.

87
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

6.2 SERVICE QUALITY AND THE SERVQUAL MODEL

Services are very dependent on the interaction of the service delivery person and the customer
and it is in this interaction that some definition of the service ‘product’ can take place.
The more the service offering can be standardized the more it can be treated like a physical
product, so a fast food restaurant is much more designed in its details and potentially more
controllable compared to a more ‘pure’ service like hairdressing for example where until the
customer and the hair stylist begin to talk, it is not completely clear what the customer
wants and expects. To that extent the design of services has to focus on some issues different
from manufactured products and can be more a real time and interactive, rather than an
in advance, process.

Parasuraman et al 1988 published an important article about their studies to measure service
quality in which they recognised a number of factors defining service quality. Their list was
later redefined to include five main categories. These are often remembered by the acronym
RATER from the first letters of the factors.

Reliability is the ability of the service provider to perform the service dependably, accurately
and (perhaps we should include) repeatedly. Assurance covers knowledge, courtesy and the
provider’s ability to project trustworthiness and confidence to the customer. Tangibles cover
the physical equipment and appearance in the immediate service environment and the
overall ambience in which the service encounter takes place. Empathy is the feeling of care,
concern and attention given to the customer and their needs. Responsiveness recognises the
need to modify the service according to customer needs and to project that such a change
does not cause the provider any problem.

Given these less than precise or easily quantifiable factors, there is a difficulty for the
designers to recognise what performance and attitudes they must specify for the human
service delivery personnel to perform.

This is further emphasised by the model that the authors used to measure service quality.
This is the SERVQUAL model, which is also called the 5 gaps model.

88
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

Other people’s reports Needs and Wants Past Experience

Customer side Expected service

Gap 5

Received Service

Service Delivery Gap 4 External

Gap 1 (including before and communications –
after service) sales and marketing

Gap 3

Translation
Provider side of perceptions into
specifications

Gap 2

Management
perceptions of
customer expectations

Figure 10 SERVQUAL Model (5 Gaps )

Figure 10 separates out the customer side of the transaction from the service delivery side.
It recognizes that in services, even more than in physical products, perception is everything.
It is what the customer perceives that she needs which creates expectations of what should
be delivered. These needs and wants are also informed by any previous experience of the
service delivery experience as well as other communications from friends and family and
increasingly online media as well as traditional information sources. Expectations are
also influenced by communications from sales and marketing about what the provider
is claiming they will deliver.

The most crucial stage is the first one of gathering information about the customer’s
expectations but while these can only be perceptions they nevertheless will form the input
to the design decisions about how to design the service system to meet these expectations.
(This need is the same as in product design to capture the voice of the customer but the
intangibility of some services has to be accommodated somehow). Any difference between

89
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

the customers/users’ actual expectations and the management perception of them creates the
first worrying gap highlighted in the model. The second gap can occur in the translations
of expectations into specifications through ineffective design thinking so that the outputted
specifications do not align with the inputted perceptions of the customer expectations. Gap
three is like the quality of conformance discussions earlier but now we have the human
variability concern coming into play since even if the specifications are inherently well
determined then all of the variability in learning and application of the specifications and the
motivation to perform, means that the actual delivered performance by the human service
provider is less than intended. Gap four reflects the possibility that actual performance is
not the same as was promised in the communications to the customer, which helped form
the customer expectations in the beginning. The final and most critical gap is gap five
where the customer evaluates their perceptions about the actual service delivered against
their expectations. This is the gap that will affect evaluations about value for money, overall
quality of service and possibly the potential for repeat business or indeed complaints and
bad reviews to the company and, worst case, across social media.

So services are very challenging but we need to remember that the distinction between
services and products is sometimes not clear and it is better to see quality as an issue that
covers tangible physical criteria alongside perceptions of service versions. The SERVQUAL
model is one to bear in mind in both scenarios. Many academics are unhappy with some
of the processes and definitions used in the model but as an aid to thinking about what
businesses need to consider in creating a quality performance it has much to offer.

So given we have tangible as well as intangible criteria to manage we can now look at how
we might control quality measurements. As before, this is easier for the tangible factors and
we will focus there first of all.

6.3 QUALITY CONTROL

Control is a fundamental management process. It operates at the generic level in the same
way everywhere. There needs to be a target value of some factor to which we wish to
perform. We need to be able to measure the value of some variable of interest to compare
it to the target and this will allow us to decide if we are in the right place or moving in the
right direction. This comparison allows us to decide whether we need to change anything
to improve (increase or decrease) the size of the gap between actual and target but we
need to do this in enough time to make the change effective before we get into trouble.
Driving a car demonstrates all of these features as we sense our position on the road and
steer to maintain safe progress. Technically we are operating a negative feedback process
where we are trying to reduce any gap (in both directions) so that we return to the targeted
requirement. (Positive feedback is where we wish to increase the size of the gap for example
when measuring the effects of a marketing campaign on sales.)

90
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

The way we do this is to use the properties of the normal distribution we showed in Figure
6 but now recognizing the time to react issue highlighted above. So rather than wait until
we get a measured value at 3σ, where the specification limits indicate the boundary between
good and bad, we put in control limits at +2σ and -2σ. Remember, that we can expect to
see actual values in the zones between 2σ and 3σ on both sides of the central mean value
just over 4% of the time but we are worried that what has actually happened is that the
distribution has either changed its location (change of mean μ and/or has increased its value
of spread σ) as we discussed in association with Figure 7.

-3σ
A
-2σ
B

Control Specification
μ
limits limits

+2σ

+3σ

Time
Figure 11 Quality Control Chart

Having set up our control chart (we turn the distribution curve through 90 degrees and plot
time across to the right) we then take a sample of the actual output from the process and
calculate the mean of the sample and plot it on the chart (in our case with an X). After a
suitable time interval we take another sample and repeat the process. By joining the plotted
results we can examine the trend in the results. We can expect to have a variation of results
scattered around the chart (remember that the distribution is of the probability of getting a
result of a particular value). In our example we do not see a pattern until the seventh plot
results in the zone between the control and specification limit. Now if we continued with
the same time interval between samples it could be possible that we could actually get some
results outside of the specification limit, that is a reject, so we take another sample more
quickly and plot its mean value. Here there are two possibilities shown. If the new result
is at A then we are really concerned that our process is moving out of statistical control
since the trend line is pointing in that direction. It is beginning to look like the location
and or spread has changed. To avoid creating any rejects we will stop the process and reset
it so the results are more towards the centre of the distribution.

91
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

In this way the chart has allowed us to control our quality performance. Of course we
also run the risk of making the wrong assumption since the two results in the same zone
might have happened by chance and the next sample might show a move back towards the
mean. This would be a Type I error. If this were the case we would have wasted resources
by stopping and resetting our processes, but we would still have avoided any rejects.

In Figure 11 we also show another outcome of the faster sample measurement, point B.
Here the plot has moved away from the control line and the danger zone so we believe
that nothing fundamental has changed and we can return to our normal sampling interval
and watch out for new worrying trend lines. Of course this assumption can also be wrong
and would be a Type II error so we should watch the next measurement result carefully for
more evidence of a pattern in the trend line.

We can also use the approach indicated in diagram D of Figure 9 to set the distribution
starting location at a distance of 3σ to one side of the specification limits and monitor the
distribution as it moves location towards the control limit at the other extreme of the control
chart and thereby obtain the benefit of a longer production run without interruption while
still avoiding the major risk of creating rejects.

The Wake
the only emission we want to leave behind

.QYURGGF'PIKPGU/GFKWOURGGF'PIKPGU6WTDQEJCTIGTU2TQRGNNGTU2TQRWNUKQP2CEMCIGU2TKOG5GTX

6JGFGUKIPQHGEQHTKGPFN[OCTKPGRQYGTCPFRTQRWNUKQPUQNWVKQPUKUETWEKCNHQT/#0&KGUGN6WTDQ
2QYGTEQORGVGPEKGUCTGQHHGTGFYKVJVJGYQTNFoUNCTIGUVGPIKPGRTQITCOOGsJCXKPIQWVRWVUURCPPKPI
HTQOVQM9RGTGPIKPG)GVWRHTQPV
(KPFQWVOQTGCVYYYOCPFKGUGNVWTDQEQO

92
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

We will normally watch for both kinds of changes in the mean value (location of the
distribution) and in its spread.

In theory, the same kind of control chart can be used for the more intangible service
dimensions but it is clearly easier the more tangible we can make the measurement scales,
for example, numbers of complaints, time to answer the telephone, time between taking the
order and serving the food in the restaurant, but perception measurements are still a difficulty.

In describing the process of using measurements from samples to allow us to use the chart,
we were describing a series of inspection processes but one where we take the completed
item and measure it to determine its actual dimensions. We then take the average value of
the number of items in the sample to determine which value to plot on the chart.

This is actually a more sophisticated approach compared to the quality inspection processes
that started the quality journey for most organisations in manufacturing. We are emphasising
manufacturing here because of the separation in time between the production process
and the time at which the customer accesses the item. In services, the customer is present
during the service delivery so can comment on the success or failure of the process as it is
happening, for example ‘can you cut some more hair from the front please’.

Without a customer present then someone has to take the role of representing the
customer’s interest to provide some guarantee that what is produced will meet customers/
users’ requirements. For the craftsperson it is usually their internal drive to perfect their
craft that ensures that the item meets expectations but the factory was designed not to
need craftspeople. However it often employs people with similar desires to perfect their
abilities to produce to required standards (and as we will discuss later, with the potential
to improve the processes dramatically). In the early stages of industrialization the role of
customer representative fell to quality inspectors. These people acted as filters measuring
output and comparing the results to the design specification to decide if it was acceptable
or was outwith the specification limits and therefore should not be allowed to pass the
inspection stage. In this way bad product was ideally stopped from leaving the factory and
therefore could not reach the customer’s hands. This was an inherently expensive way to
ensure only quality output reached the customers/users and had to be replaced by more
integrative and scientific methods as we have discussed.

While tools were employed to assist the inspection process it was still highly dependent
on the person’s motivation, skill and attention to detail in what was often a very repetitive
and boring job. Bad product could still get through the go/no go test gate and into the
customer’s hands. Inspection was not good enough. Apart from anything else, finding the
error at this stage in the production cycle was simply too expensive as no information could

93
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

be provided about how the process was functioning so that control actions could take place.
Thus it was that quality control using the statistical tools we have been describing came to
be seen as a more effective and cheaper way to ensure the quality of items sent from the
factory to the customer (remembering that in probability terms there is always the chance
of some things being passed that should have failed). All such inspection and measuring
processes are part of the appraisal cost of quality we mentioned earlier.

Inspections and control charts as part of a quality control regime are fine as part of appraisal
but they only address the issue of quality of conformance to the design specifications. Of
themselves they do little to inform how designs can be improved or processes made more
robust and fit for purpose.

We therefore need to think about the next stages in the evolution of quality thinking and
look for quality improvement.

6.4 QUALITY IMPROVEMENT

Japan was devastated at the end of World War II and as part of the Americans’ administration
of the country’s recovery and the rebuilding of their economy they sent a number of
their statisticians to the country to teach shop floor and senior managers how to perform
statistical quality control. They received an enthusiastic hearing, as the Japanese believed that
part of the American success in the war was as a result of the strength of their industrial
output allied with quality control. Collectively the country listened, learned, applied (and
later improved) on the US teaching but they did it in their own ways and recognizing a
different set of priorities and attitudes. As they developed their own understanding, they
in turn became the teachers for those in the rest of the world ready to learn from them in
the same way they had learned from the US experts.

We have already talked about one of these Japanese experts, Taguchi, but another influential
person was the founder and leader of the Panasonic company, Konosuke Matsushita. He
articulated a more cooperative vision of a leadership style in which higher, internalized values,
including respect and growth of individuals and benefit to society, as well as the success of
the business, were key. This translated into a fundamentally different view of the roles of
managers and workpeople in terms of quality and improvement. He argued that at that time
the American managers were following the principles of scientific management established
by Frederick Winslow Taylor (Taylor, 1919), at the turn of the twentieth century. This
allocated the thinking roles to managers and experts and the doing roles to the work people
with little interaction and little value placed on anything suggested by the workpeople. For
Matsushita this was completely the wrong way round as the workpeople had a much more

94
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

fundamental understanding of the processes they were using day in and day out. So part
of the methods used in Japan came to be known as quality circles in which the workpeople
would get together with experts to gather data on their current processes and how they
were operating to see if they could brainstorm ways of saving time or other resources while
ensuring or improving the level of output quality they were creating. The quality circles
were trained to use a variety of simple data collection and analysis tools and applied this
to quality control processes. (The seven tools are described at https://en.wikipedia.org/wiki/
Seven_basic_tools_of_quality.)

The seven tools can be categorized according to their purposes. These are firstly, data collection
and analysis and include: Check Sheets which simply allow the recording of outcomes against
predetermined categories of interest; Scatter Diagrams which record two (or more) variables
measured at the same point in time; Histograms which plot the number of occurrences of
particular categories in vertical bars and in so doing begin to demonstrate the shape of the
distribution from which the values have been collected; Pareto charts collect and order the
most important categories and at the same time their cumulative total as a concave curve
which allows for prioritizing intervention actions of some kind.

Technical training on
WHAT you need, WHEN you need it
At IDC Technologies we can tailor our technical and engineering
training workshops to suit your needs. We have extensive OIL & GAS
experience in training technical and engineering staff and ENGINEERING
have trained people in organisations such as General
ELECTRONICS
Motors, Shell, Siemens, BHP and Honeywell to name a few.
Our onsite training is cost effective, convenient and completely AUTOMATION &
customisable to the technical and engineering areas you want PROCESS CONTROL
covered. Our workshops are all comprehensive hands-on learning
experiences with ample time given to practical sessions and MECHANICAL
demonstrations. We communicate well to ensure that workshop content ENGINEERING
and timing match the knowledge, skills, and abilities of the participants.
INDUSTRIAL
We run onsite training all year round and hold the workshops on DATA COMMS
your premises or a venue of your choice for your convenience.
ELECTRICAL
For a no obligation proposal, contact us today POWER
at [email protected] or visit our website
for more information: www.idc-online.com/onsite/

Phone: +61 8 9321 1702

Email: [email protected]
Website: www.idc-online.com

95
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

The second category is to understand how processes can be understood through visualizing
the logic of production or repair perhaps by showing a series of connected visual symbols
representing actions and decisions against a time line. This is called a Flow Chart. Creating
one helps designers think through their options, operators to understand a required sequence
of actions or the repair person or doctor or pilot to go through a suggested sequence
of checks and tests.

We have already discussed the use of the tool to control quality which we called a Control
Chart (also called a Shewhart chart after the American inventor of it).

The final tool is called an Ishikawa diagram, named after the Japanese originator Kaori
Ishikawa. They are also known as Cause and Effect diagrams or Fishbone diagrams for
reasons that will be obvious when we look at Figure 12. This tool is quite different from
the others as it helps us conceptualize things and is an aid to brainstorming. It has uses
in quality analysis to try and identify what might be the cause of a problem but it also
can play a part in the initial design thinking of what features need to be designed into
a product or process.

Possible Causes
Maintenance Machines Methods Materials People

Effect

Mission /
Suppliers Management Measurements
Environment
Figure 12 Ishikawa Diagram, Cause and Effect, Fishbone

The essential idea is that we list at the head of the fish the outcome of interest to us; this
is the effect we are trying to analyze. We then construct the bones of the fish (which we
can expand out) but which usually starts with a framework of categories to which we add
more details. Figure 12 is appropriate for a manufactured product and of course we can add
more details. For example in the People category we might include: capability/skills, training
and experience, motivation, reward, shift patterns and so on. Not often included in some

96
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

literature would be the supplier category but for most manufacturers a high percentage of
the total item will have been brought in from the market so some of the issues in quality
can often be traced back to problems at the supplier’s operations.

This same approach can be used in product marketing where variations around the marketing
mix might include the categories of Product/Service, Price, Promotion, Place (location of
service and/or customer), Process, People, Physical evidence, Performance and Page (when
we think of how users might search our website for information).

For services, variations around service Provider people skills, Surroundings, Systems and
associated Suppliers, are common.

The key distinguishing principle of operation inside the best of the Japanese companies was to
train all of their people in these tools and then empower them to use them to continuously
improve their workplace performance. Of course the range of possible causes of the effects
of interest include people and other parts of the organization over which the work people
might have no formal influence. However, people empowerment of this kind is about those
other people recognizing and valuing the ideas coming from the direct workers and taking
the ideas seriously enough to really evaluate if the suggestion is technically feasible and
affordable in terms of enhanced customer experience or reduced operating or production
costs. Any possible improvement is worth it for reasons we shall discuss shortly.

An important reason for the use of some of these tools of analysis is to identify what issues
to prioritize for concentrated effort to improve. Once identified then the brainstorming
of ideas for changes can be focused but we also need processes to do this in a controlled
and productive way.

Like all scientific ways of working this follows a similar path. Identify the issue to be addressed
and create a Plan to change it in some way (similar to hypothesis testing), we then need to
Do something to put some of the planned changes into place, we then need to Check or
study the results of the test to evaluate if the changes to the causes have resulted in changes
to the effect of interest and if so we then Act to formalize the changes into new standard
values or operating procedures and if no improvement has resulted then we move back to
the plan stage and try another test. We are describing a repeating cycle of this sequence
PDCA (attributed to Shewhart or Deming). Some people describe the process as a spiral of
cumulative, incremental improvement. Others suggest the PDCA wheel is moving quality
up an improvement slope while consolidating the improvements into new standards (which
are then rigorously enforced), stops the wheel rolling back down the slope.

97
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

This process of continuous improvement in quality is often referred to by the Japanese word,
Kaizen and it is very obvious if this thinking is in place if on visiting a workplace one finds
lots of charts and data on boards near the workplace and the people clearly understand what
the charts mean and how the resultant analysis and the people’s contribution to quality
improvement brainstorming and PDCA processes, contribute to improvement on a regular
basis. Please note however that changes will only happen in test conditions and no formal
change will be built into standard operating procedures unless and until the evidence justifies
it. Current production and quality will not be put at risk by random experiments. Control
over quality is about reducing the effects of randomness, not increasing them.

Kaizen
Performance

“If it aint Broke don’t fix it”

Time
Figure 13 Step Change Vs Kaizen

There is a proverb in the western world which is “If it ain’t broke, don’t fix it’. Which
argues that if something is currently all right and seems to meet requirements it is better
not to risk any changes that might actually not make things better and might even make
them worse. This thinking produces the plot on the bottom of Figure 13. When we get
to a stage when we have to do something to make things better (since often each stage
of the curve is not perfectly horizontal, instead it is on a downward path) we have to do
something but at this point we need to make major changes and, if they work, we jump
up the performance scale for a while before beginning another slow decline.

The Japanese developed Kaizen process (Kaizen translates as continuous improvement) operates
completely differently and by aiming to make continuous change the new normal (but
properly controlled and managed), we then produce the improvement line at the top of the
figure. In this way businesses believing in continuous improvement have an every-increasing
performance gap to their competitors locked in old thinking. So continuous improvement

98
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

is better than infrequent step changes and of course there is nothing to stop the Kaizen
business also introducing big step changes if they can find them thereby increasing their
positive slope to an even steeper angle and leaving their competition even further behind.

For western people in business the need for continuous improvement seems a large challenge
but in other areas of human activity in art, music and sport for example, this continual
search for improvement is what the participants are all about. Just think about athletics
where a difference of a fraction of a second makes the difference between having a record
or a medal. The best businesses try to create an environment for their people where they
want to accept this kind of personal challenge, to be the best possible performer they can
be, and bring this new ability into their workplace. Many managers who have allowed
their workpeople the chance to develop and improve their own workplace experience and
performance are amazed at the scale of improvement they can create and note how happier
they are for the opportunity. It took the Japanese leaders to illustrate to the rest of us that
there were better ways to think and act about managing quality and innovation, so maybe
we should all be practicing Kaizen in all of our activities?

�e Graduate Programme
I joined MITAS because for Engineers and Geoscientists
I wanted real responsibili� www.discovermitas.com
Maersk.com/Mitas �e G
I joined MITAS because for Engine
I wanted real responsibili� Ma

Month 16
I was a construction Mo
supervisor ina const
I was
the North Sea super
advising and the No
Real work he
helping foremen advis
International
al opportunities
Internationa
�ree wo
work
or placements ssolve problems
Real work he
helping fo
International
Internationaal opportunities
�ree wo
work
or placements ssolve pr

99
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

6.5 TOTAL QUALITY MANAGEMENT. TQM

During the American administration of Japan various teachers on quality methods were
brought to the country to promote their thinking and there were a number of people who
later became quality gurus both in Japan and in the west although in some cases it took
a long time for the Americans to recognize how important their citizens had been to help
Japan lead the world in manufacturing methods. However in this period of time most
people were emphasizing the word control. Even the Toyota process was called Company
Wide Quality Control.

Possibly the most important to Japan was Deming (2000) but he was only published much
later in the west. His impact was so great that a highly prestigious prize was instituted in
Japan in 1951, which gained high level support in business and government. In 1988 the
same ideas were used to motivate US businesses to learn these lessons through the US
Government instituting the Malcolm Baldrige National Quality Award.

Although Deming did not use the term, he is credited as launching the Total Quality
Management movement as these approaches spread from one successful business to another.
He saw many of the problems with traditional quality approaches as lying with the managers
who did not see how all of the sub-systems interacted and influenced each other (including
those connecting to customers/users and suppliers). He also argued they did not understand
the nature of variation that we have discussed and also did not pay enough attention to
the social side and psychology of managing people and how to evaluate properly what
kinds of information can be trusted and to what degree. He produced a list of 14 things
that management should do and 7 ‘deadly diseases’ that they should avoid. In this way he
emphasized the need for a total approach. This meant everyone in the business and in the
interconnected supply chain to customers/users and from the suppliers, all seen as part of
a total systems view.

While Deming was working with the Japanese, another American, Armand Feigenbaum,
(Feigenbaum 1961), was developing his approach, but this time inside the General Electric
company before becoming a management consultant. He talked of Total Quality Control
but his range of advice covers much of the same territory as Deming’s.

Lecturing to the Japanese, almost in parallel with Deming, was Joseph Juran (Juran 1951),
who again referred to this as quality control although his reach was again much wider. He
emphasized three aspects. The first was Quality Planning that this book very largely echoes
in its argument for quality thinking from the beginning and in the design process. Secondly
was Quality Control as we have been discussing and then thirdly an emphasis on Quality
Improvement, where he had his own 10 step plan to guide managers.

100
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

During all of this time, and including Crosby, we have similar arguments about increasing
the scope of quality, getting everyone involved in its improvement and challenging managers
to think in new ways and to lead and manage in much more significant ways. That all of
this makes sense was demonstrated by the Japanese success in becoming the world’s second
biggest economy in the 1970s and 1980s, largely built on manufacturing products which
set global standards in quality, reliability and value for money, until the whole economy
crashed after policy mistakes affecting the financial markets.

Perhaps governments and financial institutions also need to learn the quality lessons?

6.6 COMPETING ON QUALITY PERFORMANCE

We now understand that if we do quality properly then we can gain benefits following
on from customer satisfaction but at the same time minimizing or avoiding the waste of
‘unquality” that means that we are also reducing our operating costs. In financial terms
we are increasing our revenue results while reducing our costs and therefore increasing our
profit margin. This sounds like a wonderfully attractive result for business success but why
do not more businesses operate in this way?

We need to recognize the ‘ain’t broke’ syndrome and the inertia that it creates. Sometimes it
takes a serious challenge to survival to force managers to investigate what they can change to
get past the threat. For the Japanese it was the need to export manufactured goods from a
war ravaged country with few natural resources and with the initial reputation of producing
very low quality items. The first forays into international markets were unsuccessful because
of their lack of quality and this meant they were not able to generate the international sales
the country needed to earn enough money to import all that their population needed to
survive and prosper. This experience drove the ready acceptance of the quality message and
the need to implement the new thinking very quickly and extensively.

It also takes time to make a difference. Total Quality Management means that just about
everything in the business has to change. This is across financial, human relations, design
and operations, distribution, supply and sales management and distribution and in some
cases including government influence and constraints. The Japanese took 2-3 decades for
only some of their companies, in only certain sectors, to obtain the global reputation for
quality improvement that is recognized now.

It is also hard to keep going when the need for continuous improvement is constant and
constantly increasing in scope and intensity.

101
QUALITY BY DESIGN Quality Control, Improvement and Business Impact

Quality is one of the order winners that very rapidly becomes a qualifier but here again
we need to understand the interconnected nature of business competitiveness. When the
first of the Japanese colour televisions come onto western markets the quality difference
compared to the traditional producers was so great that customers/users switched their
buying choices rapidly to the new Japanese suppliers. This caused the traditional suppliers
to recognize the importance of quality as a qualifier and they switched to market much
higher quality products to try and compete. However, they were still working on the old
models of quality, largely based on inspection, so the higher quality of the output came at
greatly increased production costs. The Japanese then switched quality to being a qualifier
(still continuously improving it of course) and made the cost of the product the new order
winner. The traditional producers could not compete on cost and lost market share rapidly
and of course could not recover because of the time dimension to make any improvements.

We have therefore to recognize that quality is not a fixed point, we cannot achieve quality
as if it is an end state. The expectations for quality are always increasing, so people now
talk of a quality journey since the destination is in a sense always further ahead, down the
road. It is the journey that is most important and how much faster and more efficiently
you cover the ground, compared to your competitors.

www.job.oticon.dk

102
QUALITY BY DESIGN New Technology Implications

7 NEW TECHNOLOGY
IMPLICATIONS
Your goals for this chapter are to:

• Recognize the challenges posed by increased sensor technology and associated

automation in products and service delivery
• Realize how additive manufacturing capability can challenge many of our taken
for granted assumptions in product design and its potential to offer solutions to
many other challenges
• Realize the opportunities and threats in a more autonomous society and the
Internet of Things

7.1 ROBOTS AS PRODUCTS / PROCESS

ASSISTANTS OR REPLACEMENTS
As we have highlighted a number of times, humans are inherently variable in terms of
concentration, effort, wellbeing, capability and commitment to their work tasks as well as
needing food, toilet breaks, holidays and sick time off. This is a major factor in the quality
performance experienced by customers/users of service providers. Imagine therefore what
the world would be like if we could remove these human traits from the entities delivering
the production or service output.

That is what is driving, at least in part, the move towards increased automation of job roles.
Many jobs are inherently very repetitive and while high skills can be developed to perform
these jobs many people are easily bored by them and can lack motivation to improve their
skills when they are seen as ‘machines’ by their employers. When employers actually value
these skills and support and reward them in craft or creative businesses, then that can be
a different situation.

In 2019 the UK Government Office of National Statistics estimated that 1.5 million
jobs could be lost to automation in England and Wales, which was 7.4% of the working
population. Of these the highest risk categories were for women, part time workers and the
young where software algorithms can make better decisions (through their ability to process
large amounts of data faster and more reliably) or where specialist robots can be trained
to perform repetitive actions more efficiently without interruptions or indeed where the
automation of the process of driving for example might replace large numbers of people in
the transportation industries.

103
QUALITY BY DESIGN New Technology Implications

While some of these technological solutions are coming closer we only need to look at
self-service tills in supermarkets on on-line check-in and self-service bag drops at airports
to see people being displaced currently by technological solutions at overall lower cost than
employing humans. High volume businesses have used dedicated robots for some years to
displace humans in automotive assembly or in hot or dangerous environments in nuclear
power situations for example. Drones are used to deliver medicines in Africa and are being
evaluated for package delivery in distribution channels elsewhere. Further developments
are for robots as companions to elderly or frail people and increasingly the term Cobot is
being used for the development of more flexible and perceptive robots that work alongside
humans safely and in a ‘considerate’ manner to aid the humans in their tasks. As production
volume builds, these cobots will become more affordable for the smaller businesses.

The quality future and the economic arguments, especially in countries where their working
age populations are declining (almost all developed countries currently), suggests that these
trends will continue.

Automation has the potential to vastly improve the quality of conformance but the quality
of the design process needs the automation and the application of Artificial Intelligence to
all of the data and decision flows we discussed above in chapter 4, where the ability of Big
Data analysis tools might help the evaluation of the many trade-offs across interconnected
decision domains.

For the robots which are designed to replace human workers we have the potential to
remove the pressure to source from low labour cost countries since the economic cost of
using robots even in the countries which outsourced production around the world reduces
as production volumes increase and robotic capabilities increase. Existing patterns of world
trade could change dramatically without the flows of materials and parts and products
around the globe. This could be complemented by more use of additive manufacturing
close to concentrations of customers/users and would further reduce the need for global
shipping and airfreight thus reducing overall carbon footprint and environmental impact.

Some argue that these developments make it more urgent to consider a future for the human
race in which work is not the way in which economic benefit is delivered to families. Instead
we have discussions and some experiments into Universal Basic Income to allow people to
do more of what they want to do where automation in all of its forms is used to provide
the economic performance which funds the populations’ lifestyle.

104
QUALITY BY DESIGN New Technology Implications

7.2 ADDITIVE MANUFACTURE

At various points in our discussion of the design for function, use and re-cycling we
talked about assembly and disassembly processes but additive manufacture changes all of
these things and possible solutions. Additive manufacture takes a printing approach to the
construction of items but uses various types of materials to replace the printing ink while
progressively overlaying printed strata on each other to build three dimensional artifacts.
The ink replacements can be metals, polymers or biological materials so that human organ
replacements can be created or disfigurement can have new solutions. A recent application
was the computer enhanced processing of fetal heart conditions (observed by MRI scans) to
provide a 3D model of the baby’s heart while still in the mother’s womb, so that surgeons
are better prepared to operate safely to repair congenital heart problems when the newborn
comes into the world.

In the world of products additive manufacturing replaces the need to assemble parts and
sub-assemblies since they can all be printed, even including functioning hinges and moving
parts. However this actually makes disassembling at end of first life a meaningless idea.

Not all of the product might be printable however so here again designers need to think
how to remove other parts from the additively produced ones. These latter are only really
suitable for recovery of the raw materials to enter another printing process later.

Large scale additive manufacturing could replace the need for extended logistical distribution
networks and warehousing to allow more distributed (more local) production and speeding
time to customer delivery. It has the potential to be disruptive to global business flows but still
needs extensive considerations of the design for X scenarios, even if some of the constraints
and options will change. Apart from replacing mainstream products, additive manufacturing
has possibly more important uses in creating replacements parts for maintenance purposes in
remote areas in the world or in space where sending replacement parts is just not feasible.

7.3 THE INTERNET OF THINGS

Increasing automation in products and processes is dependent on more embedded computing
capability to record ongoing situations, measure performance and control parameters and
crucially also increase the capability and reliability of communication between the disparate
entities. (The development of autonomous vehicles demonstrates the need for and the
complexity of this technological development.) This is where we can talk of the Internet
of Things where products and processes can communicate with each other efficiently and
quickly so that complex interactions can be managed in real time to enable better delivery
of goods and services or to coordinate search and rescue operations for example.

105
QUALITY BY DESIGN New Technology Implications

So in the near future we can imagine our refrigerator is monitoring the shelf life of our food
and warns us of expiring dates and perhaps autonomously orders a replacement delivery
from the store. Delivery of the order is monitored and tracked until arrival at our front
door at which time instructions are sent to our intelligent front door to open its coolbox
receptacle to allow secure delivery. Perhaps then the kitchen cobot collects the items from
the front door and replaces old product in our fridge while disposing of the past due date
items in the trash (which it might remove later?)

On a different level, autonomous vehicles need to be able to integrate data about their own
location, those of other vehicles and pedestrians in its surroundings while also recognizing
and/or communicating with road traffic sensors and flow control traffic management signals
to ensure safe passage.

There are huge design and quality issues for each of the things as well as for the overall
hierarchies of systems as they interact so we cannot afford in the short terms perhaps, to
plan on the basis of current capability, but we all need to be aware of the direction all of
this is going. The technological, environmental and social drivers are very strong but social
concerns are also present and growing, so care in our societies will be needed so that we
do not create another great divide between those who remain in personally interesting and
fulfilling jobs and the others left behind as technology developments make redundant their
old work based value to society.

WHY
WAIT FOR
PROGRESS?
DARE TO DISCOVER

Discovery means many different things at

Schlumberger. But it’s the spirit that unites every
single one of us. It doesn’t matter whether they
join our business, engineering or technology
teams, our trainees push boundaries, break new
ground and deliver the exceptional. If that excites
you, then we want to hear from you.
Dare to discover.
careers.slb.com/recentgraduates

AW-1703-170x115-ad-Route 1v3.indd 1 28/01/2019 17:24

106
QUALITY BY DESIGN Conclusions and Final Thoughts

8 CONCLUSIONS AND
FINAL THOUGHTS
In this book we have argued that Quality is a fundamental requirement for success (a
qualifier if not always the order winner), without which the various kinds of customers,
users or clients cannot be satisfied and will not return or send any positive messages to other
potential customers. In fact a failure on quality performance can cause serious reputational
damage from which it might be difficult to recover. However, quality is a difficult thing to
produce, since in many ways it is only evaluated by a customer and even more difficult is
the potential for each customer to perceive it differently. The challenge is huge to try and
understand what customers/users want, if they know of course, and then to translate all
of that data into information that drives the subsequent stages of production of items or
delivery of services or indeed a mix of these two.

The evaluation of all of the options to satisfy customers, while providing the economic
benefits to the supplier, which will allow them to continue in business and prosper and
grow, is the role of the design function. The scope and scale of the design decisions however
need to be expanded to cover the complete supply chain or network for the first life of
the product and service and (for more products than services) to consider what happens at
the end of the product’s usefulness to the first customer. The aim has to be to ensure that
the value embedded in the product is not simply discarded but is used in similar or new
ways for new customers thus avoiding further depletion of our planet’s limited store of raw
materials. Design always has to consider the effective use of materials and energy so as to
limit resource depletion as much as possible.

We have also recognized the important truth that variability is both a problem and in
some senses a solution as we put together the two worlds of customer wants, needs and
expectations with the physical world where variations in process and measurement capability
mean we cannot afford to specify unique point solutions but instead use ranges of acceptable
output values. By managing the distributions of customer requirements with those of process
capabilities we can come to a stage where the chances of producing something outside of
the customer acceptance zone is very remote. However, we also recognize that none of this
stays still and over time customer expectations will increase and processes capabilities will
evolve for good and bad so monitoring and corrective action will be needed.

We have also argued that design is much bigger in its importance and scope than might be
thought (and taught?) previously. To be truly effective, the design task has to reach into and
be informed by many other areas of business activity across many organizational boundaries

107
QUALITY BY DESIGN Conclusions and Final Thoughts

in the internal and external supply chains, many of which are not part of the core business.
These are environments in which traditionally educated designers (in the UK at least) are
not expert. Without vastly improved computer aided design systems, (unknown to this
author), this suggests that quality and design processes need to become much more collective,
drawing in experts from both inside and outside of a focal organization (customers/users and
suppliers) in all of the disparate areas of activity in which external actors in governments,
standards authorities and many others, also have an impact.

The Japanese automakers initially taught us to think about quality in fundamentally different
ways to then current western practice but they were open in making it possible for others
to learn from them as they previously had learned in the other direction. Now we need to
generate a new way of thinking about design and quality that is even more inclusive of all
considerations, especially as the societal concerns about pollution, lost jobs and the effects of
a narrow, profit only, focus of globalization are being shown to create populations left behind
by new technologies and perceived by themselves to no longer have a valued role in society.

A creative and integrative approach to a more societally friendly form of design of both
products and services has the potential to create both economic and social benefits for more
of our world population. We will all have to think in new ways to make it happen, not least
business and country leaders, governments, political parties and trades unions along with
trading and other standards bodies, but thinking in new ways is fundamentally the way of
continuous improvement and so the quality message is both the challenge and the opportunity.

So we can really think of Quality by Design but perhaps not just quality of product or service
but quality of life and survival of the planet. As the climate change threat and the evidence
of extinguishing of species becomes every more pressing and visible, the time to act is now.

Can the impact of Design and Quality thinking be any more significant?

108
QUALITY BY DESIGN References

REFERENCES
Cox, J and Goldratt, E M 1986  The goal: a process of ongoing improvement, North River
Press, Croton-on-Hudson, NY.

Crosby, P B 1979 Quality is Free: the Art of Making Quality Certain, McGraw Hill, New York.

Deming, W E 2000 Out of the Crisis, MIT Press, Cambridge, Mass.

Feigenbaum, A V 1961 Total Quality Control, McGraw-Hill, New York.

Hauser, J R and Clausing, D 1988 ‘The House of Quality’Harvard Business Review. Vol 66 No 3.

Jensen, M and Meckling, W 1976 ‘Theory of the firm: Managerial behavior, agency costs
and ownership structure’, Journal of Financial Economics, Vol 3, no 4, pp 305-360.

Juran, J M 1951 Quality Control Handbook, McGraw-Hill, New York.

Parasuraman, A, Ziethaml, V. and Berry, L L 1988 ‘SERVQUAL: A Multiple-Item Scale

for Measuring Consumer Perceptions of Service Quality’  Journal of Retailing,  Vol 62, no
1, pp 12-40. 

Taguchi, G, Chowdhury, S and Taguchi, S 1999  Robust Engineering: Learn How to Boost
Quality while Reducing Costs & Time to Market. McGraw-Hill Professional, New York.

Taylor, F W 1919 Principles of Scientific Management, Harper, New York

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/
file/69403/pb13530-waste-hierarchy-guidance.pdf

https://elsmar.com/Cp_vs_Cpk.html

https://en.wikipedia.org/wiki/Seven_basic_tools_of_quality
www.ilo.org

www.ISO.org

https://www.juse.or.jp/deming_en/award/03.html

https://www.nist.gov/baldrige/publications/baldrige-excellence-framework

109
QUALITY BY DESIGN References

http://www.efqm.org

http://www.wto.org

https://www.ons.gov.uk/employmentandlabourmarket/
peopleinwork/employmentandemployeetypes/articles/
whichoccupationsareathighestriskofbeingautomated/2019-03-25

https://zerowasteeurope.eu/2019/05/a-zero-waste-hierarchy-for-europe/

(WEEE) Directive 2002/96/EC of the European Parliament and of the Council of 27

January 2003 on waste electrical and electronic equipment (WEEE)

The Restriction of Hazardous Substances Directive 2002/95/EC, (RoHS 1)

Directive 2002/95/EC of the European Parliament and of the Council of 27 January 2003 on
the restriction of the use of certain hazardous substances in electrical and electronic equipment

PREPARE FOR A
LEADING ROLE.
English-taught MSc programmes
in engineering: Aeronautical,
Biomedical, Electronics,
Mechanical, Communication
systems and Transport systems.
No tuition fees.

E liu.se/master

‡
110