In today’s economic environment many companies are turning toLean Six Sigma for the first time. Others are reinvigorating theircurrent Lean Six Sigma programs. With its focus on bottom line

financial benefit through sustainable productivity and efficiencyimprovements obtained by minimizing process waste and varia-tion, Lean Six Sigma is the perfect tool forreducing your operating costs as the marketretreats. While this is an obvious necessity,now is a good time to remember that the ulti-mate goal of Lean Six Sigma is not simplyreducing operating costs but rather increas-ing customer satisfaction through sustainablebreakthrough performance improvements.When the pie shrinks, you don’t just want toincrease the number of cherries in your slice,you also want a bigger slice of the pie. Lean Six Sigma can be aprincipal tool to increasing market share, revenue and earnings.

Linking Customer Satisfaction to Meeting the Customers’NeedsCustomer satisfaction is achieved by giving the customers whatthey want – meeting their needs. When addressing customer satis-faction with Lean Six Sigma, the Kano model of customer satisfac-tion can be helpful. Developed by Professor Noriaki Kano in the1980’s, this model places customer needs into three categories:basic, performance, and excitement.

Needs are graphically plotted with the X-axis representing the

provider’s ability to meet the need and the Y-axis representing thecustomer’s degree of satisfaction, as shown in Figure A. Startingwith this model of the customer’s needs can focus Lean Six Sigmaefforts on those needs that will significantly impact the customer’ssatisfaction. Significantly increasing customer satisfaction will lead

to increased sales and market share.Basic needs are those that are expected by

the customer to be fulfilled by the product orservice provider. As shown in Figure B, meet-ing a customer’s basic needs has a neutralimpact on satisfaction. Failure to meet basicneeds, however, has a significant negativeimpact on satisfaction.

Here is an example to which we can allrelate; windshield wipers are expected to be

included in the price of a new automobile. Having the salesmantell you that windshield wipers are optional on a particular modelwill promptly lead you to question his real desire to sell the car.Examples of basic customer needs in the industrial gas businessinclude DOT shipping compliance, failure to leak, correct labeling,and on-time delivery. The ability to meet these needs is taken as agiven by the customer and required for companies to stay in busi-ness.

Failures to meet a customer’s basic needs are, therefore, to beavoided because of the immediate and significant impact of thesefailures on customer satisfaction. Thus, Lean Six Sigma efforts arefrequently focused on fixing these failures. There is usually abun-

6 I O M A B R O A D C A S T E R March–April 2009

Improving Customer Satisfaction with

Lean Six SigmaBy Hermann MiskellyDirector of Quality and Six Sigma Master BlackbeltMatheson Tri-Gas, Inc., Irving, TX

“Lean Six Sigma can be a

principal tool to increasing

market share, revenue

and earnings.”

I O M A B R O A D C A S T E RMarch–April 2009 7

dant historical data available since failures to meet basic needs aretypically documented through quality and corrective action sys-tems. Assigned Lean Six Sigma teams can quickly begin findingroot causes, implementing process improvements to correct the rootcauses, and putting controls in place to ensure that the improve-ments are maintained and the failures eliminated or significantlyreduced.

Performance needs, the second category of customer needs, arethose where the ability to meet the need has a proportional impacton customer satisfaction. For performance needs, as shown inFigure C, more (or less) is better.

Going back to the windshield wiper exam-ple, one performance need is price; the lowerthe price, the greater the satisfaction with thewindshield wiper. Conversely, as the priceincreases, so does the dissatisfaction.Performance needs are the customer’s needson which companies generally compete.Within the industrial gas business, companiestypically compete on performance needssuch as price, lead times, purity, etc.

Improving the ability to meet performanceneeds is also a frequent Lean Six Sigma proj-ect. The desired outcome is easily measured:lower cost, shortened lead times, orincreased purity. Improvement targets for specific needs must be setand Lean Six Sigma teams must be tasked with hitting the targets.These targets are generally set by halving the difference betweenwhere the company currently is and what they think is possible. Theteams start studying the current processes used to meet theseneeds, identifying and eliminating the non value-added work andwaste from the processes, designing and implementing stream-lined, waste-free processes, and, once again, putting controls inplace to sustain the newly achieved improved performance.

There are problems with competing on performance needsalone, however. First, improvements in the ability to meet perform-ance needs produce generally only mild increases in customer sat-isfaction. Very significant improvements in performance areneeded to drive large changes in customer satisfaction. For exam-ple, shortening the lead time for a product from five days to three

days will probably not have a very large impact on overall satis-faction. The second problem is that incremental improvements inperformance can be, and will be, very quickly matched by com-petitors, thus eliminating any competitive advantage a companymight have had. This leads to new targets and new Lean Six Sigmaprojects. So on it goes.

Breakthrough, game-changing improvements in the ability tomeet the customer’s needs are required to achieve significantimprovements in customer satisfaction. Breakthrough improvementsto products or services will minimize competition, significantly

increase sales and market share, and – if theimprovement excites the customer enough –allow the provider to name the price!Generally, breakthrough improvements, espe-cially if derived from patented or protectedprocesses or methods, take longer for thecompetition to copy. Thus, the market leadassociated with breakthrough improvementstends to be longer lasting.

This leads us to the third category of cus-tomer needs, called excitement needs.Personally, I prefer the term latent needs forthis category since these are needs that thecustomer does not know a given provider canmeet or, in many cases, the customer is not

even aware of the need. I also like the term Tom Peters uses for this category of needs:

WOW! Failure to meet a latent requirement has no impact on a cus-tomer’s satisfaction since he is not aware of the need in the firstplace, to say nothing of anyone’s inability to fill it. But, as shownin Figure D, successfully identifying and fulfilling a latent need hasa very large impact on customer satisfaction.

Relative to the automotive example, an excitement feature couldbe a windshield wiper blade that never wears out or one that auto-matically turns on when it rains. Think about the TiVo, the iPod, orthe Boeing 707 Jetliner – all filling latent needs. Latent needs thatare currently going unfilled in the industrial gas businessinclude………HA! Did you really think I was going to share thatinformation with you!? We all need to find these potential marketdiscriminators ourselves. Continued ä

“Improving the ability to meet

performance needs is also a

frequent Lean Six Sigma

project. The desired outcome

is easily measured: lower cost,

shortened lead times, or

increased purity.”

Achieving Breakthrough Performance ImprovementsObviously then, companies need to be constantly searching, iden-tifying, and fulfilling needs that excite the customer. There are twoways to achieve customer excitement, either through a significantimprovement in the ability to meet a known, stated customer need(breakthrough performance improvements) or through the identifi-cation and fulfillment of an unknown,unstated customer need (latent performanceimprovements).

Lean Six Sigma can provide methods andtools that will facilitate achieving sustain-able customer-exciting performance in fulfill-ing existing and unstated needs. The firsttype of needs, existing needs, is the bestplace to start.

Companies need a detailed understandingof what the customer expects from their prod-uct or service. Answers to the following questions are requiredbefore starting to make improvements:

• What are the customer’s stated needs? What does the cus-tomer really expect the product or service to deliver? Are weinterpreting the stated needs in a way that meets the cus-tomer’s real intent?

• How well do we currently fulfill these needs? Equally impor-tant, how well do our competitors fulfill these needs? Wheredo we lead the market in performance and where do we trail?

• What improvements in meeting these needs are reasonable?

One Lean Six Sigma tool that can help answer the first questionis Quality Function Deployment (QFD), commonly called the Houseof Quality. Developed by the Japanese in the 1960’s for complexengineering construction work, QFD is now extensively used in theU.S. for new product development. This tool is used to translate thecustomer’s needs into product or service requirements (using thelanguage of the business) and then identify the links between theserequirements and the features or methods by which a companyintends to meet these needs. With QFD, holes in understanding the

customer’s needs quickly become apparent,as do any conflicting needs. QFD can beused to quickly and fully address qualityissues with a customer and to identify any dif-ferences in interpretation of, or subtle con-flicts in, the stated needs.

Only once the customer’s needs are thor-oughly understood can a company setimprovement targets. Of course largeimprovements can achieve significantimprovements in customer satisfaction. But

how much of a breakthrough improvement will excite the customer? Equally important is identifying what is really achievable. Can

the target be achieved within the current processes? Can it beachieved within current state-of-the-art? Can it be achieved withinthe financial limitations of the company? Setting improvement tar-gets that are not achievable, either physically, financially, or politi-cally, will doom Lean Six Sigma projects to failure in terms of per-formance, schedule, or budget.

Again, Lean Six Sigma provides tools that can help addressthese questions and set reasonable, achievable improvement tar-

8 I O M A B R O A D C A S T E R March–April 2009

Improving Customer Satisfaction with Lean Six SigmaContinued from page 5

“Only once the customer’s

needs are thoroughly

understood can a

company set

improvement targets.”

I O M A B R O A D C A S T E RMarch–April 2009 9

gets that are significantly large enough to impact customer satisfac-tion. To determine appropriate targets for breakthrough perform-ance improvements a company must understand 1) how the com-petition currently performs (inside) and 2) what is “best in class”performance (outside) for comparable needs. Commonly calledbenchmarking, both inside and outside comparisons are useful inestablishing the minimum improvement required and the maximumimprovement possible.

The Lean Six Sigma tools most useful inassessing your competition’s ability to meetthe customer’s needs (inside benchmarking)are the Quality/Cost Profile and the ValueMap. Shown in Figures E and F, these toolsprovide both a head-to-head comparison foreach customer need and an overall valueassessment for each competitor. With thisinformation, a company can identify thoseneeds where they lag behind the competition— needs that require they at least match thebest competitor to eliminate a potential nega-tive market discriminator. More importantly, however, this informa-tion can be used to identify those needs where a company leadsthe competition. To achieve breakthrough performance the LeanSix Sigma teams must be applied to further increase the marketlead so that a company can leverage these needs as positive mar-ket discriminators.

To determine potential “best in class” performance relative tospecific customer needs requires that the Lean Six Sigma teamsbreak down each specific need or group of needs into general-ized, abstract needs. For example, specified lead time require-ments to multiple locations can be abstracted to distribution needs.Once abstracted into general terms, a company can identify theleaders in distribution methods and technology; Federal Expressand Walmart quickly come to mind. Now the teams can study thedistribution systems of the “best in class” and identify methods andtechnologies that can be applied to their specific industry andprocesses. After potential breakthrough performance improve-ments have been identified, it simply becomes a matter of “runningthe numbers” to verify that the potential increases in sales and mar-ket share are worth the investments required to implement the newmethods or technology.

Achieving Latent Performance ImprovementsIdentifying and fulfilling latent performance improvements is difficult,but also much more rewarding. The only way to identify theseunknown customer needs, so that they can be fulfilled, is to under-stand the customer. A company must intimately know how the cus-tomer procures, handles, uses, and disposes of their product or serv-ice. When they understand their product or service in the customer’senvironment they identify opportunities for improvement that canalso improve how the customer uses the product or service.

Two tools are extremely useful in understanding the customer’senvironment with respect to the product or service. One is a gen-eral marketing tool and the other is the most important Lean SixSigma tool. The general marketing tool is a simple system for col-lecting information regarding the customer. It is important that allinformation is collected, no matter how the information enters thecompany. Experience shows that the most useful pieces of informa-tion relative to identifying a customer’s latent needs can come fromthe most unlikely of sources. Companies touch customers in manyways: sales staff, delivery personnel, quality engineers, account-ing, on-site servicing, and many others. Each of these organiza-tions sees a different aspect of the customer’s environment. Latentneeds can be found when all of these different “images” arebrought together and combined through methods like affinity dia-

gramming or Ishikawa analysis.The second way in which the customer’s

potential latent needs can be identified isthrough the use of value stream mapping andprocess mapping. Value stream mapping is ahigh level look at the internal life cycle of theproduct or service from receipt of the cus-tomer’s order to delivery of the product orservice. The value stream map includes infor-mation flow (both inside the company andoutside to the suppliers), material flow, in-process inventory, and processing time infor-mation. With a value stream map of the cur-

rent process a company can visualize a future-state map that elim-inates or minimizes waste: waiting, inventory, defects, transporta-tion, motion, over production, and non value-added processing.This future-state map presents an idea of an optimized system thatminimizes production costs while “wowing” the customer.

A second approach is to use process mapping, which is adetailed step-by-step construction of how the product or service isprocured, produced, delivered, used, and discarded. Process map-ping can be used to identify activities that are non value-added,wasteful, or prone to mistake in the current process. A companymust particularly look for opportunities where small changes inwhat they do internally have a major simplifying effect on the cus-tomer’s work. They also need to look for opportunities where sub-optimization of a particular step in the process has impacted theoverall effectiveness of the system. Construction of the customer’sportion of the process map is best done with the customer’s partic-ipation, which in many cases may not be practical. In these cases,a company can again fall back on the “images” obtained throughthe myriad of contacts the company has with the customer. Thisinformation can be used to construct the customer’s portion of theprocess map.

“Experience shows that the

most useful pieces of

information relative to

identifying a customer’s

latent needs can come from

the most unlikely of sources.”

Continued ä

10 I O M A B R O A D C A S T E R March–April 2009

I have found that with a process map of the entire productor service, production, delivery and use opportunities forlatent performance improvements become apparent. In anexample from a previous employer, a detailed process mapfor a particular hazardous product showed us that our cus-tomer was required to stock our product in a remote locationto his facility. In his assembly process thecustomer subsequently removed ourproduct from the remote storage, trans-ported it to an assembly area, andassembled it to another hazardous prod-uct that was stored at a separate remotelocation. This necessitated two trips(transportation waste) to two differentlocations (inventory waste). We recom-mended that, for a very nominal fee, thecustomer have the second hazardousproduct directly shipped to our facilityand that we would assemble it to ourproduct and ship the assembly to the cus-tomer. Once assembled together the twoproducts could be stored at a singlelocation. This simplified our customer’sassembly process and greatly increasedhis satisfaction with our company. (At alater date we convinced the customerthat we could produce the second haz-ardous product and effectively doubledour revenue with this single customer.)

SummarizingLean Six Sigma has been demonstrated time and time again tobe the premier tool for improving internal productivity and effi-ciency. It has also been very successfully used to improve cus-tomer satisfaction by addressing failures to meet a customer’sbasic needs. Failure to meet the customer’s basic needs is detri-mental to the reputation of a company and will eventually forceit out of business, if not quickly and fully corrected. Continualimprovement in fulfilling the customer’s performance needs is also

important to ensure competitiveness. In diffi-cult economic times such as we are currentlyexperiencing, we need to refocus Lean SixSigma efforts so that we are also addressingthe customer’s performance and latentneeds. This will lead to significant growth insales and market share.

Unfortunately, there is a fly in the oint-ment: over time what were once the cus-tomer’s latent needs become his basicneeds. Automatic transmissions, car radios,air conditioning, and CD players were allonce latent needs in the automotive industry.Now they are basic needs that must be ful-filled in order to compete.

In today’s world, the slide from latentneed to basic need is ever accelerating.Only through the application of focused,disciplined, data-driven methods like LeanSix Sigma will companies be able to per-form with the speed and accuracy requiredto stay ahead of the competition and thecustomers. n

Improving Customer Satisfaction with Lean Six SigmaContinued from page 9

“Continual improvement in

fulfilling the customer’s

performance needs is also

important to ensure

competitiveness.”