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  • January 26, 2023
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1. Introduction – Section 4

Hey, welcome to this section which is the defined phase of DMAC process. And if you are appearing in American Society for Quality certified Six Sigma Black Belt exam, then from this topic you will be getting 20 questions. In this topic we will be talking about the voice of the customer, the business case and project charter. And then we will be looking at some project management tool and some analytical tools. In defined phase you would have agreed on a project and here you will be doing the pre planning of that. What all is the scope of your improvement project, whether that has management approval or not, that we will talk in project charter and how do you plan for that, the scheduling of that, during what time you will finish your defined phase, when your measurement phase will start. All these things we will be discussing in this section, which is the defined phase of the project. Let’s go topic by topic and see what all we are discussing here in this section, starting with A, which is the voice of the customer, that’s the first thing which we need to do, understand what customer wants. Because our Six Sigma project, our improvement project which we are doing, has to be aligned with the customer needs. So for that we need to identify what customer needs are.

We need to collect some data related to customer requirement and understand what customer requires. All these things we will be talking about in part A of this section, which is defined in part B. We will be developing a business case and project charter. Business case will tell us that why do we want to do this particular project? The project charter will include all the details which include the business case, the problem statement, the project scope, goals and objectives of this project, what are the performance measurements related to this project, and then the review and approval of project charter. So that’s all will be covered in this part, which is part B, business case and project charter. Once we have the charter, then we have a go ahead from the management to do this project. Management has already committed by signing on this charter that they will be supporting this project. Then to do this project, you will be acting as a project manager for the project. So you need to learn some tools related to project management. How do you manage a project? Your project could be a big refinery, a big power plan, but here your project is this Six Sigma improvement project. Still you will need some basic tools, some basic project management tools to execute this project. So here in this we will be learning Gantt chart. Gantt chart will help you in planning the project, putting the timeline to various phases of the project. Then we will be talking about toll gate reviews. Here we will be reviewing project at each stage we will talk about that. We will talk about work breakdown structure. Work breakdown structure will help us in formulating the scope of the project, what all is included in the project and what all is not included in the project. Then we will be talking about Raci model here. And Racy is responsible, accountable, consulted and informed. In Racy model, we will be listing down who all are responsible, who all are accountable for a particular activity, who all needs to be consulted, and who all needs to be informed about this particular activity.

So we will have a list of activities. And on that activity we’ll be putting RAC and I, in addition to project management tools, we will be learning about some analytical tools. These analytical tools, if you look at that, these are five tools out of seven advanced quality tools. So if you know there are seven basic quality tools and then in addition to that, these seven tools which were the advanced tools were developed later. So these five tools which are listed here are from those seven advanced quality tools. So in this we will be talking about affinity diagram, tree diagram, matrix diagram, prioritization matrices, and activity network diagram. Activity network diagram, if you see, is the advanced form of Gantt chart. So you do planning at a very high level using Gantt chart. But then if you need to do more detailing of that, you might go for activity network diagrams. So these are all the items which we will be discussing in this topic, which is the defined phase of the project. Let’s get started with the voice of customer. On the next video. You.

2. Customer Identification (BOK IV.A.1)

Hey, welcome to this section. In DMAC approach, the first step is D, which is define, define the issue, define the problem which you are going to solve. But before, before we go into defining the problem, we need to understand customer. Here in this next few sessions, we will be talking about customer, understanding customer, what type of customers are, how do we segregate that, how do we collect data for customer? How do we analyze that data? These are the topics which we’ll be covering here in next few sessions. Starting with the first thing which is customer types. What are the types of customers? Broadly speaking, you can have internal customer and external customer. The concept of internal customer was popularized by quality guru Joseph Juron. He sort of appropriated the concept of internal customer. Earlier customer would mean an external customer only. But when we say internal customer, what is internal customer? Internal customer is within the organization. When you have number of steps, number of processes, then the next process is the customer. So if the first step is manufacturing a part and the second step is assembling the part, then the assembly is the customer of manufacturing. Manufacturing needs to meet the requirement of assembly as a customer, considering assembly as a customer. So this is internal customer coming to external customer. External customer is something which is outside the organization. Here, for example, if you are the company which is making chocolates and then for making that chocolate, you need number of inputs from your number of suppliers.

So your supplier could be supplying you the chocolate wrappers, suppliers could be supplying you the chocolate or suppliers could be supplying you a number of components of that chocolate. So all these suppliers, for all these suppliers you are external customer, your company is an external customer because these suppliers are supplying product to you. So you become you or your organization which is making chocolate becomes a customer for the suppliers. Now, going further, your chocolate goes to your retailers, then retailers become intermediate customers and then it goes to ultimate customer. Ultimate customer could be the parents of the kid who actually pay money and buy the chocolate from the store that becomes ultimate customer. And consumer is something who actually consumes the product. So in this case, the kid who is eating this chocolate is the consumer. So we talked about supplier, we talked about your company organization and we talked about intermediate customer, ultimate customer and consumer.

So that’s the chain of customer types. So to differentiate between internal and external customer, let’s be very clear that anything which is within the organization is internal customer. Anything which is another organization, then it becomes external customer. So, after talking about customer types, now let’s talk about customer segmentation. What is that and why we do that? We will do that on the next slide. So, customer segmentation is dividing customers into different groups to meet specific demands of that specific group. So you can divide your customers based on number of things.

You can segregate your customer based on their location, based on their buying habits, gender, language, local customs, education, past purchases or many other things. You need to decide on what factors you want to segregate your customers on and why do you want to do that. You want to do that because if you segregate your customers then you can satisfy that particular segment in a much better way. You can meet the specific need of a specific group or the specific segment. For example, one segment of the customer would be willing to pay much higher price by having more additional features built into the product. And then there could be another segment just opposite to that who would want the product as a cheap but with less facilities, with less additional items into that. So based on that segregation, you can develop two separate products. One meeting the need of the customer who is willing to pay higher price and one which is meeting the need of the customer who are willing to pay less price.

So that’s why you want to do market segmentation. You can price differentiate, you can provide better service, you can focus on specific need and this will also help you in product development based on the segment. If you see that one particular segment is a big segment and you are not meeting the demands of that particular segment, then you might want to go for a product development to meet the specific need of that particular group or that particular segment coming to the tools for segmentation. So as a company you would collect the customer data, customer information based on the purchases, number of companies, collect different types of data depending on what product they’re selling. And the one simplest thing which you can do is you can segregate your customer based on one particular group or one particular factor. The factor could be male, female, male or female could have a different buying habits, different needs, different requirements.

So you could classify your customer base based on male or female based on the gender or let’s say married or unmarried or many other things. People willing to pay high price, people willing to go for a cheaper product depending on the location, whether this is within the city, whether it’s outside the city or outside the country. So you can do that sorting just by a plane, sorting on one single factor. But when you want to cluster the customer data on multiple factors, let’s say you want to have a male which is younger generation and which is willing to pay more that as a one segment, then you might need to have an advanced tool for customer segmentation. Some of the advanced statistical tools which are used for customer segmentation are cluster analysis, factor analysis, multiple regression analysis. We are not going to go into to details of these but somewhere later in this course, we will be touching these topics. But for now we can understand that you can simply segregate the customer based on single factor sorting or you can use advanced statistical tools for customer segmentation. So with this, we complete our discussion on customer segmentation.

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