Shiba, et al. (1993) note the difference between the traditional ‘Product - Out’ concept, where the company works to a set of standards and a ‘good’ product is one which conforms to the company standards, and the ‘Market - In’ concept where the focus is on satisfying the customer. As long as the standards are aligned with the customer requirements, it may be argued, there is no conflict in these two approaches. However, the difference lies in the behavioural implications. A ‘Product - Out’ mentality will lead to adherence to standard despite unhappy customers “It meets our standard so it must be OK”. This approach will be compromised with an unexpected change to customer tolerances, and has led to the demise of many organizations when a better alternative hits the market causing customers to suddenly expect more of the product.
An example might be the advent of smart phones and the problems Nokia have experienced (search the web for the Nokia “burning platforms” memo) in their market share since Apple launched the iPhone, and radically changed the market. Playing catch - up when the market changes suddenly is very deficit and expensive, as Nokia has discovered. A ‘Market - In’ approach encourages the active engagement with customers which makes it less likely that companies will stick to outmoded specifications, or miss coming trends for too long.
There is also a degree of arrogance which can set in with the ‘Product - Out’ mentality. An assumption (often expressed by designers) that the customer does not know what they want. Whether this is true or not is largely a moot point. A quote attributed to Ford is often used to illustrate this idea:
“If I had asked my customers what they wanted, they would have said a faster horse.”
Of course this merely misunderstands the idea of customer focus. What customers can (and should) be asked for is what they need, or what they would value in this case faster movement from A to B - rather than how we should deliver the requirement the horse versus internal combustion engine. This is not to say that at times an innovation cannot create a hither to non - existent need, simply to say that this happens fewer times than is perhaps suggested. Did Apple truly create a new set of customer needs, or simply respond innovatively to emerging trends of mobile computing?
Six Sigma recognises the value of customers to the organization and focuses on creating value for the customer. Six Sigma initiatives which focus on cost reduction miss the point that what delivers long term profitability are happy customers, even more so than lower costs. A good Six Sigma project focuses on the customer rather than short term financial gain (Anderson et al, 2006).
Six Sigma Related Interview Questions
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Six Sigma Tutorial
Background And History
Why Six Sigma?
Six Sigma: Key Strategic Concepts
Strategic Six Sigma
Processes And Scientific Investigation
People And Organizational Learning
Sustainable Six Sigma Deployment
Six Sigma Projects: Key Concepts
Customer Focus In Dmaic
Variability Reduction In Dmaic
Soft Aspects Of Dmaic
Processes In Dmaic Projects
Dmaic In Service Organizations
Example Of A Six Sigma Project
Quality By Design (for Six Sigma)
Six Sigma: A Critique
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