IE-23-Quality Function Deployment in Banking.pdf

8/10/2019 IE-23-Quality Function Deployment in Banking.pdf

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Proceedings of the 7thIMEC &16thAnnual Paper Meet

02-03 January, 2015Dhaka, Bangladesh

Mechanical Engineering Division Institution of Engineers, Bangladesh

QUALITY FUNCTION DEPLOYMENT IN BANKING

Mohammed Shaukat Ali1, Dr. Engr. Md Mamunur Rashid

2

1Millennium Corporate Branch, Trust Bank Limited

2

Bangladesh Institute of Management (BIM)[email protected],

[email protected]

ABSTRACT:In the beginning of New Product Development, organizations need to match customer

requirements and firms resources; this is eventually translated into developing products and servicesthat feature such characteristics and attributes that feed the need and expectations of consumers. Even

though, the fact that product development is only a partial phase of the entire product life cycle, the

decisions made during this stage are critical for the overall success and performance of the newproducts. Organizations must be ready to develop products that will gradually be valued by the

market, which can be achieved through the use of Quality Function Deployment models and

applications. This paper tries to use the quality function deployment framework to ascertain customers

voices as fundamentals for product development and estimating the relationship among customerrequirements and product characteristics and finally identifying those design features that more

effectively fit the customer needs.

Keywords: Quality Function Deployment, QFD, Customer Requirements, Product characteristics.

1. INTRODUCTION

In the beginning of New Product Development, organizations need to match customer requirementsand firms resources; this is eventually translated into developing products and services that feature

such characteristics and attributes that feed the need and expectations of consumers. Even though, thefact that product development is only a partial phase of the entire product life cycle, the decisions made

during this stage are critical for the overall success and performance of the new products.

Organizations must be ready to develop products that will gradually be valued by the market, which

can be achieved through the use of Quality Function Deployment models and applications.

Quality Function Deployment (QFD) is a way of making the 'voice of the customer' heard throughoutan organization. It is a systematic process for capturing customer requirements and translating these

into requirements that must be met throughout the 'supply chain'. The result is a new set of target

values for designers, production people, and even suppliers to aim at in order to produce the output

desired by customers. QFD is an important tool for translating the voice of customer into productsspecification (Akao, 97). It has been widely used for product development and quality improvement

around the world. It is a customer-oriented approach, supporting design teams in developing new

products based on an assessment of customer needs. Basically, in the QFD, customer needs aretranslated into design attributes. To begin the design process in the QFD, the design team needs to

listen to the voice of the customer.

The voice of the customer contains the customer needs expressed in their own words. It can be

captured through questionnaire, observation and so many other ways for an existing product or service.

However, for a new product, questionnaire will be the only way in most of the cases. From theresponses as collected, the team will identify the level of satisfaction of customers. If the satisfaction

level is so poor, customers grievances should immediately be heard. Customers will not spend a single

penny in the long run to purchase dissatisfaction. Even if the customers are satisfied, their voice shouldbe considered to make them more satisfied. The House of Quality is the most commonly used tool in

the QFD methodology. This matrix translates the voice of the customer into product specifications. The

paper deals with designing a house of quality as a QFD tool to capture voice of customers that leads to


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devising the way out for ensuring more satisfaction. The use of QFD in manufacturing industry is verycommon, and from such an assumption, here QFD is used in a service industry to devise out the way of

ensuring more customer satisfaction.

2. OBJECTIVE OF THE RESEARCH

The objective of this study is to evaluate the level of satisfaction of the respondents regarding the

service at a Bank, to study and understand the customer satisfaction among the customers, to

understand the customers attitude toward the bank and to offer suggestions to the Bank to

improve their customers satisfaction level on different factors.

3. LITERATURE REVIEW

The purpose of this literature review is to gain an understanding of quality function deployment

process for service sector especially banks with concepts, frameworks, strategies and components that

are current and emerging in the field. The crucial elements of identifying and implementing

customers voice in production development and service improvement are examined in detail. Specific

information is given on the implementation of house of quality, its existing frameworks, trends and

important considerations.

Yoji Akao (1997) presented a paper at International Symposium on QFD 97 Linkping titled QFD:

Past, Present, and Future reflecting on the early days of QFD, the current status, and future challenges.

Much more progress is expected in the QFD world, as it renders a tangible method to manage new

product development, an area that will be most important in future TQM. QFD will be also positioned

as an effective tool for quality assurance of systems in the information age. For these goals, QFD

methodology needs to be standardized and incorporated in the ISO.

Jinea Akhtar (2011) stated that the physical aspects were positively and moderately related to service

quality. The customer services determinant had insignificant relationship with service quality.

Luis Bernal, Dr. Utz Dornberger, Alfredo Suvelza and Trevor Byrnes (2009) published a QFD

handbook for services providing step by step procedure for completing house of quality for completingquality function deployment in a dental clinic.

4. METHODOLOGY OF THE RESEARCH

The nature of this report is descriptive, so instead of doing any survey or using sampling method,

observation and selective questionnaire method is used to complete this qualitative research. Most of

the necessary information has been collected by personal interview with customers of the branch; both

descriptive and inferential research were conducted to identify existing practices in their organization.

The following steps are involved in this research-

Step-1: Variable selection

Step-2: Questionnaire Preparation

Step-3: Data Collection

Step-4: Data Processing and Analysis.

In the primary stage of this study, secondary data has been collected from the relevant publications,newspapers and books. An in-depth questionnaire survey was carried out in the study area where 30respondents were selected randomly for necessary information.


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5. THEORETICAL ORIENTATION

Quality Function Deployment (QFD) is a means of translating customer requirements into the

appropriate technical requirements for each stage of product or service development and production.

This approach seeks answers to the following six questions:

Voice of the customer:What do our customers need and want?Competitive analysis:In terms of our customers, how well are we doing relative to our competitors?

Voice of the technical team:What technical measures, relate to our customers needs?

Correlations: What are the relationships between the voice of the customer and the voice of the

Technical Team?

Technical comparison: In this comparison, product or service performance compares to the

competitors to identify the improvement needs and to guide the design of the product or services.

Tradeoffs:What are the potential technical trade-offs?

5.1. QFD Deployment Phases

QFD is essentially a process where customers voice is translated into design attributes. A typical QFD

process has four successive phases as depicted in Figure 2.

Figure 1: QFD Process

Product planning: This phase begins with customer requirements. A set of design requirements is

determined, which, if satisfied, will result in achieving customer requirements.

Product development: It involves design /redesign and fabrication of new or modified product and then

testing it to find its usefulness. Product development is essential in order to meet changing consumer

needs, maintain sales position and profit margin etc. The various steps involved in developing aproduct are given below:

get new ideas

evaluate ideas technically evaluate ideas from markets point of view

take the final decision

get into production and introduce product into the market

5.2 House of Quality: A QFD Tool

The primary tool used in QFD is the house of quality. The house of quality translates the voice of the

customer into design requirements that meet specific target values and matches those against how an

organization will meet those requirements. It is a collection of six interrelated matrices clustered insuch a way that essentially gives shape of a house having boundaries, pavements, ceiling, roof etc. as

shown in Figure 3. Different parts of the house of quality are stated below:

1. The customer attributes: The left exterior walls of the house represents customer requirements

determined by the market research is essentially the Voice of the Customers.


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2. The technical descriptors: The ceiling or second floor, of the house contains the technical

descriptors describing how the product may achieve its required performance in general terms

which are not solution specific that represents the Voice of the Designer.

3. Relationships: The interior walls of the house are the relationships between customer

attributes and technical descriptors indicating where there are strong, moderate or weak

relationships.

4. Technical matrix: The foundation of the house is the prioritized technical descriptors based on

the relationships between customer attributes and technical descriptors.

5. Technical correlations: The roof of the house is the technical correlations representing the

interrelationship between technical descriptors. This correlation is important to show to what

extent the technical descriptors may be mutually supporting and contradictory.

6. Planning matrix: On the right side are the prioritized customer requirements or planning

matrix providing quantitative market data for each of the customer attributes based on user

research, competitive analysis or team assessment.

Figure 2: House of Quality

5.3 Building House of Quality

Building a house of quality is not a simple task. Marketing experts, quality team (or, say, QFD team),

and technical experts should work collectively to design the house that will ensure better quality for the

customers. However, the designing of a house of quality follows seven consecutive steps as mentioned

below:

Step 1: List Customer Requirements (WHATs)

Step 2: List Technical Descriptors (HOWs)

Step 3: Develop a Relationship Matrix between WHATs & HOWs

Step 4: Develop an Interrelationship Matrix Between HOWs.

Step 5: Competitive AssessmentsStep 6: Develop Prioritized Customer Requirements.

Step 7: Develop Prioritized Technical Descriptors.

5.4 Customer Requirement Related Issues

Major wants / requirements are identified from the questionnaire survey of customers of the branch.

After analyzing primary data it is tabulated as below:


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Table-1.1: Major wants / requirements of the sample clients of the bank

Sl. Issues Total points Rank

1 Cheque payment from the credit available in short term account 135 38

2 Withdrawal of money from current account by ATM card 190 15

3 Sending bank statements to you at the end of each month 172 23

4 Possibility of cheque payment from an account into another one via internet 158 305 Payment of loan installment via internet 151 36

6 Demand and receipt of various currency & cash facility via internet 177 20

7 Demand and receipts of various reports via internet 153 34

8 Receipt of Bank statement via internet 187 17

9 Checking credit balance via internet 177 20

10 Cheque payment by bank upto a certain limitation 148 37

11 Interest payment to current account 152 35

12 Transfer of credit balance from one account to another 185 19

13 Receipt of documents in envelop after service providing 174 22

14 Provision of all services needed by customers in all branches 187 17

15 Good and spruce looking Bank employees 162 26

16 Secrecy of Bank employees 155 32

17 Friendly and intimate attitude of Bank employees 256 3

18 Employees can remember customers names 235 5

19 Duration of waiting in line (waiting for turn) 227 7

20 Availability of waiting area 168 25

21 Cleanliness of branchs environment 160 27

22 Beauty of branchs decorations 158 30

23 Provision of financial consultancy 250 4

24 Sufficient and cheerful environment of branch 221 10

25 Delays in cash receipt 268 1

26 Delays in cash payment 261 2

27 Provision for POS 160 27

28 Provision for Mobile Banking 201 14

29 Provision for Internet Banking 225 830 Provision for ATM Cards 212 12

31 Provision for Online Banking 155 32

32 Attractiveness and beauty of bank advertisements 210 13

33 Quality and content of bank advertisements 214 11

34 Provision for adequate rest rooms 189 16

35 Provision for adequate cash counters 223 9

36 Friends judgments about service quality 172 23

37 Own judgment about service quality 159 29

38 Past service performance of the branch 230 6Source: Questionnaire Survey, 2014.

5.5 Developed Consequences

After getting the results of the questionnaire considered as voice of the customers as simplified above,the following consequences have been developed:

I got prompt service from cash counters.

There were no delays in receiving services.

I received account statements monthly.

I received internet banking service from home.


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I got any branch service from the bank.

The bank employees were well mannered and groomed.

The bank employees were empathetic and knowledgeable

My financial queries were answered accurately and timely.

Provision for financial consultancy. The branch was neat, clean and spacious.

Bank advertisements were attractive and informational.

The past performance of the branch was very good.

Bank offers technologically advanced services.

Bank offers ATM services.

I received bank statements as and when required.

5.6 FINDINGS AND RECOMMENDATIONS

After the completion of analytical section, the major findings of this research can be listed as below for

the bank to improve: Advertisements;

Branch management;

Employee training;

Queue management;

Technology improvement.

RECOMMENDATIONS

The main recommendations in relation to this research are given as below:

Improve the quality and emotional content of the advertisements.

Improve employee training on various aspects customer service.

Improve queue management to reduce redundant delays in providing service.

Have to invest in improve technological advancements to provide e-banking services.

Improve some necessary aspects of branch management.

7. CONCLUSION

Both manufacturing and service industries should implement quality function deployment to

improve the process continuously to improve the products and services. Customers now-a-days

are very choosy for spending paisa. Quality is the first and foremost preference. Even, they like

to state that we are paying not for the product but for the value. Therefore, it becomes a

challenge for every company to pay heed to their customers continuously and also to show

proper respects to their feelings. QFD is the right tool to listen to the customers and responding

to what they want continuously. Once customers get the idea that they are rightly addressed,

they will take care of the bank.

REFERENCES

Akao, Y. (1997). QFD: Past, Present, and Future. International Symposium on QFD 97 Linkping ,

1-12.


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Amoah-Mensah, A. (2010). Customer Satisfaction in the Banking Industry: A Comparative Study of

Ghana and Spain. Spain: Universitat de Girona.

Chapman, A. T. (1993). A Tutorial On Quality Function Deployment. Engineering Management

Journal, Vol. 5, No. 3, 24-35.

Jayshree Chavan, F. A. (2013). Factors Affecting On Customer Satisfaction in Retail Banking: AnEmpirical Study. International Journal of Business and Management Invention, Vol. , Issue 1,

55-62.

Luis Bernal, D. U. (March 2009). Quality Function Deployment for Services Handbook. International

SEPT Program, 1-25.

Ma, Z. (July 2012). Assessing Serviceability and Reliability to Affect Customer Satisfaction of Internet

Banking. Journal of Software, Vol. 7, No. 7., 1601-1608.

Authors

Authors Name: Mohammed Shaukat Ali

Authors profile:Mr. Mohammed Shaukat Ali was born at Adamjee Jute Mills under

Narayanganj district in 1975. He completed MSS in Economics and MBA in Finance from

Dhaka University in 1997 and 2007. Now he is serving his as Vice President & Manager

(Credit & Foreign Trade) in Trust Bank Limited, Millennium Corporate Branch, Dhaka. In

addition, he is at the last step in completing PGDHRM degree from Bangladesh Institute of

Management.

Dr. Engr. Md. Mamunur Rashid

Dr. Rashid is Bangladeshi National, Author, Researcher, Academician, Trainer and Consultant. He was born

in November 1, 1970. He has been serving as a Faculty and Management Consultant at Bangladesh Institute

of Management (BIM), Dhaka since 16 February 2004. As a faculty and top level national master trainer hehas been facilitating for the Graduate and Professional training programs more than 100 in the areas of

TQM, HRM, Compliance of ISO9001:2008, SA8000, WRAP, ISO 14001, OHSAS 18001, Productivity andCompetitiveness, Project Management with MS Project-2007/2013 and Industrial Safety Management . Now

he is as adjunct faculty at Jahangirnagar University and BUP. He also worked as adjunct faculty at IEB, DIU,BOU, IBAISU, BUBT, BUET, IPM, DIPTI and Planning Academy. Prior this job he worked as a

Mechanical Engineer of Jamuna Fertilizer Company, Bangladesh for around seven years. He obtained BSc inMechanical Engineering degree from RUET (erstwhile BITR) in 1993 with 1stclass and 8thposition, MSc in

Mechanical Engineering degree from BUET in 1996 under NST Fellowship Program of GoB and MBA

degree from BOU in 2004. He completed a Diploma in Computer Science and Applications from BOU, a

PGD in Human Resource Management from IPM with 1 stClass and a Post Graduate Diploma in Marketing

Management from BIM. He completed almost 30 training programs/short courses at local and abroad. Healso completed Management Accounting, Project Management, Technology Management, Safety and

Maintenance Management, Information Technology in Business and Artificial Neural System courses in

Graduate level study at Industrial and Production Engineering Department of BUET, Bangladesh. Now he is

pursuing for LLB degree from National University of Bangladesh. He has around 42 publications inrenowned Journals (20) and International Conferences (22). He also obtained Doctor of Engineering in

Manufacturing Engineering degree under Bangabandhu Fellowship program of GoB at Kitami Institute ofTechnology, Japan on March 18, 2013. He also awarded the Scholarship from class IX- Graduation degree

from GoB. His journals are indexing almost Universities of the world. He is life member of the followingprofessional organization/body: IEB, BSTD and IPM. He is also member of the following professional

organization/body: JSPE, BSME, and BCS. He is the founder and Chairman of Birganj Technical and

Business Management College, Dinajpur since 2002. He can be reached by e-mail:mamun87245 mail.com and cell-01712700412.

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IE-23-Quality Function Deployment in Banking.pdf