Page 66 - Design for Six Sigma for Service (Six SIGMA Operational Methods)

Chapter
3

Value Creation for
Service Product

3.1 Introduction

The bottom line for every company is not its short-term profitability but the
value of its products in the eyes of customers, often called customer values.
Short-term profitability reflects a company’s recent history and past strengths,
but without everlasting enthusiasm from its customers, a company may not last.
As a matter of fact, it is customers’ opinions that determine a product’s fate.
Customers’ opinions decide the price level, the size of the market, and the
future trend of a product family. A product with high customer value often
has increasing market share, increasing customer enthusiasm toward the
product, word-of-mouth praises, a reasonable price, a healthy profit margin
for the company that produces it, and increasing name recognition. Clearly,
the ability to design and deliver service products that have high customer
value is the key to success for service organizations.

There are plenty of books and articles that discuss issues related to customer
value. The famous book Market Ownership by William Sherden (1994) has
an excellent chapter on customer value. Bradley Gale’s book Managing
Customer Value (1994) also presents workable methods to survey and
deploy customer value into product and service design. Many value engi-
neering books and articles (Park 1999) provide detailed value definition and
quantitative methods for value analysis and cost reduction. Quality function
development (QFD) (Cohen 1988, 1995) is an excellent method developed
in Japan that can be used to deploy customer wants into product design,
including service product design. Using well-designed surveys is a basic
way to obtain customers’ opinions. There are some excellent articles in the
literature regarding customer survey design (Rea and Parker 1992).
Customer value is also highly related to brand recognition. Usually,

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