Page 67 - Six Sigma Demystified

48 Six SigMa DemystifieD

tion of 1.995 inches. Parts exceeding these values (i.e., shorter than 1.995
inches or longer than 2.005 inches) will not be acceptable for use. These defects
typically would be returned to the supplier for replacement or credit, resulting
in potential delays (waiting for replacement parts) and other additional costs.
The returned parts, in turn, cost the supplier in the short term (through the
credit it issued, the rework of the long pieces to finish them to an acceptable
length, and the scrap in discarding of the material, labor, and lost capacity asso-
ciated with the short pieces that cannot be used by the customer). From a
longer- term perspective, many customers prudently monitor their suppliers so
that those with consistently poorer records of performance will be replaced
eventually by suppliers who can meet the requirements consistently.
In many business- to- consumer (B2C) transactions and in some B2B transac-
tions, specifications may not be stated so clearly. Instead, expectations tend to
dictate perceptions of performance. Various customers may have different
expectations; a given customer’s expectations even may change depending on
external considerations. For example, what is an acceptable queue time waiting
for a teller at a bank? Do business customers who visit each day for deposits
have different expectations than nonbusiness customers visiting twice a month
for deposits? Is the acceptable queue time influenced by your personal schedule
for that day or whether you have a small child pulling on your arm? Unstated
expectations clearly are more challenging in many ways, yet they offer great
potential for market differentiation and resulting revenue enhancement.
Whether detailed specifications have been provided by customers or are
developed internally to meet perceived but unstated customer expectations,
they tend to become the focus. Even customer- conscious personnel will define
customer needs in terms of specifications: “As long as we meet their require-

ments, we’ll be fine.” These product specifications are viewed as goalposts:
“Anywhere within the requirements is fine.” Often, service attributes aren’t that
important: “The main thing is to deliver what they want, even if it’s a bit late.”
When customer requirements are perceived as goalposts, as shown in Figure
3.1, there is equal value for all products or services within the specifications, so
there is no perceived advantage in improvement beyond this point.
In most cases, the goalpost approach does not maximize customer satisfac-
tion because it does not represent the customer’s preference accurately. Instead,
customers tend to think in terms of optima. For bilateral specifications (where
upper and lower specifications are provided), the optimal value for the product
or service typically lies midway between the requirements, with deviations
from that point less desirable. Customers value predictability, or minimum