Value Driven Six Sigma-So What's New?

Traditional Six Sigma Mantra
Six Sigma has always been about reducing variation. Traditional Six Sigma strove to reduce process variation and its success at doing so has been well documented. Traditional Design for Six Sigma (DFSS) strove to utilize quality tools in the design processes to yield products that meet customer expectations. DFSS successes have been less prevalent, which might be the case because it can be more difficult to quantify and demonstrate veritable results.

Criticisms of Traditional Six Sigma
The critics of traditional six sigma often cry: sure you've reduced process errors, but how has that influenced the customer perceptions of product/service value? Sometimes the influence on customer perceptions are direct as in the case of reductions in call center wait times or paper work cycle time (which makes the organization more responsive to customer requests), but is the customer really receiving more value when callers are routed through a complex call filtering system for the sole purpose of reducing variation of in-call handing times?

Then there's DFSS, with tools such as the Voice of the Customer (VOC), Quality Function Deployment (QFD), Analytical Hierarchical Process (AHP), etc. Well...., these tools as proposed and traditionally used are good in theory, but..., well..., they're difficult to use in practice and often collapse under their own weight, which ends up forcing managers to shoot from the hip anyway.

Value Driven Six Sigma
The mantra of Value Driven Product Management is to use product value, product cost, and pace of innovation to guide variation reduction decision making. Value Driven Six Sigma and Value Driven DFSS looks at variation reduction through a new lens: reduce process and product variation so long as the result is positive net-value creation. The net-value of any product management decision is the change in product value minus the change in product cost. The third fundamental metric of product management is pace of innovation, which is a measure of how fast the product/process changes can be made.

Further Reading:
Design for Six Sigma as Strategic Experimentation

Book Review: "Designing and Delivering Superior Customer Value" by Weinstein and Johnson

5 Stars (Out of 5)

The following is a book review of "Designing and Delivering Superior Customer Value: Concepts, Cases, and Applications" by Art Weinstein and William Johnson. The book was first published in 1999 by CRC Press.

"Designing and Delivering Superior Customer Value" was written to serve as a text for MBA students on the concepts and theories of customer value, but would serve as an excellent read for general managers who are striving to make step changes in products and services. The book goes a step further than many other books on customer value as it not only proposes a framework and supporting logic (where most books on the subject stop), but backs up the propositions with real world data and several case studies (half the book is applications and case studies). The book is clearly written, has an excellent bibliography, and uses real-world examples to illustrate main points.

One of the major contributions of this book is that it suggests a relationship between customer value and Total Quality Management (TQM), which was a continuous improvement initiative the proceeded Six Sigma. Indeed, one of the major criticisms of traditional Six Sigma is that it focuses largely on cost savings and forgets to consider improvements in customer value. The authors state it clearly: The losers in the quality battle will be those who attempt to do things right, while the winners will be the organizations that learn to do the right things.

The book serves well as a foundational piece as the methods and tools are largely qualitative, but those interested in the latest analytical techniques that include quantifying and forecasting value metrics may want to seek another book on the subject. Another consideration is that even though the words "Designing and Delivering" show up in the title, the book is largely focused on delivering, i.e. the processes that make up the "service" side of the business and how they contribute to customer value.

In summary, "Designing and Delivering Superior Customer Value" is an excellent contribution to the area of Value Driven Management and is highly recommended for marketing and general managers. This book would also be a good addition to the library of quality managers because of the attention given to the link between customer value and quality.