iConsultant is committed to implementing appropriate quality management systems and processes to enable the delivery of the highest practicable quality products and services. Dyson Limited engaged iConsultant to strategize a total quality transformation for the company to overcome its current quality challenges and hone its competitiveness in the world market. An analysis and study is carried out on Dyson product and market profile to derive a quality management plan by utilizing the following quality management tool. * Root Cause Analysis
* SWOT Analysis
* Matrix Data Analysis
* Affinity Diagram
* Relationship Diagram
* Matrix Diagram
* Arrow Diagram
* Tree Diagram
* Process Decision Program
Main issues of the company are identified and broad objectives are laid out to dictate the direction of the specific tactics. Specific tactics based on the quality vision, mission and guiding principles are developed for Dyson to implement and create success. 1.Introduction
The purpose of this project is to improve and recover Dyson’s current Quality Strategy by classifying and nailing down the impending root causes that contributes to Declining Quality and Strained Customer Relationship, and thereby propose a total quality management strategy for Dyson. 1.2Project Scope
The project report compromises of quality management tools utilized for the development of Dyson’s current Quality strategy. 2.Company’s Background
Dyson Limited is an electric domestic appliance manufacturing company headquartered in the UK, and founded in 1992 by Sir James Dyson. Their products include vacuum cleaners, washing machines and hand driers. Dyson machines are exported to 50 countries and it employs over 3,000 people worldwide. Dyson always comes out with products that use better technology, better design and better engineering for which they charge premium prices to fund research and development to help bring out more products. According to Dyson, ‘Manufacturing goes beyond making things in the factory. For us, assembly comes at the very end of a long period of research, design and development.’
Dyson’s primary business strategy is to provide tremendously innovative and sleekly designed high-end products to the housewares market, all of which have fundamental improvements or changes in the way they are designed as compared to normal appliances. Much of their strategic capabilities lie in the ability of the engineers at Dyson to continue to develop new products ahead of their time, as well as the charismatic presence of James Dyson as a spokesperson for their marketing campaign. Dyson’s modus operandi is to make better products, charge people more for them, and not manufacture as many as their competitors. For instance, Dyson is the fifth largest vacuum cleaner manufacturer when measured by units sold, yet it brings in the most total revenue for vacuum units sold. Such a strategy increases demand and interest, while also allowing for acceptable higher prices on their products. 2.1Company’s Vision
To be known across the world for high quality products that are truly different and better through the imagination and diligence of Dyson people. 2.2Company’s Mission
To provide truly innovative products that is distinct in look and superior in quality. Create total customer satisfaction. 2.3Company’s Guiding Principles
* Maintain utmost quality relationship with employees, vendors and customers.
* Emphasis on continuous innovation.
* Customer Satisfaction is the driving force of the company.
* Always look to past successes and failures for inspiration.
* Provide a great work environment and treat each other with respect and
* Contribute positively to our communities and our environment. 2.4Company Size and Competitors
Dyson currently has 3588 people working worldwide excluding contractors around the world. It spends £4m on travel every year and there are 44 managers with remote reports. By 2015 Dyson is aiming have a strong base in the markets as shown below Figure 1: Map of Dyson’s presence around the world
Dyson first target countries with high income customers (represented by yellow) like US, Europe and Japan. Currently, Dyson is trying to go into other market segments like Asia and Middle East (represented by orange) which has a growing class of affluent consumers. The company has major branches in US, UK, Canada, Malaysia and Singapore. Dyson’s main competitors are consumer appliance brands like Philips Electronics, General Electric and Panasonic. Unlike most of its competitors, Dyson is relatively small and focuses on only 4 products. For its new product, the bladeless fan, not only is Dyson competing with established brands such as KDK and Mistral, but also portable air conditioning companies such as Daikin and Sanyo. 2.5Financial information
In FY2011, Dyson achieved sales of US $3 Billion. The breakdown by products is as follows:
Figure 2: Breakdown of sales in FY 2011
The bulk of the revenue still comes from vacuum but percentage share of revenue contributed by bladeless fan has been increasing much faster than other segments. Management aims to increase bladeless fan’s revenue from US$390 Million to US$1 Billion by 2017. 2.6Product Profile
In 2009, Dyson Ltd. introduced its new range of bladeless fan products. This innovative and sleekly designed high-end product revolutionize the housewares markets and immediately leads to high initial demand from people rushing to replace their household conventional fans at home. The unique proposition of the air multiplier product is that it is bladeless and has air multiplier technology that allows the fan to generate a continuous stream of air which feels like natural breeze.
Figure 3: Different products competing with Air Multiplier
It is safer than a traditional fan and offers better user experience than a tower fan. It is aesthetically more pleasing than a portable air conditioner and offers the about the same cooling effect.
However, there were several problems that arise just after one year the air multiplier was launched. 3.Reasons to Hire Quality Consultant
3.1Declining Internal Product Quality
Audits and inspections have revealed an increase in defect rate from 200 ppm to about 1400 ppm from 2009 to 2011. 3.2Declining External
Surveys conducted just after the product marked its one year anniversary in the market pointed a reduction in customer satisfaction in terms of the quality of the product. Not surprisingly, Dyson Ltd’s service department had noticed an increasing trend in the volume of calls for after-sales support.
The management of Dyson Ltd was extremely concerned about the increasing amount of complains from both customers and retailers. As Dyson Ltd had always been renowned for its excellence in quality products, they were shocked about the negative feedbacks about this new product. Moreover, the huge increase in defect rate reported during audit checks had taken the management aback, resulting in huge costs of quality incurred. Inevitably, employee’s morale was dampened since everyone was quick to pass the blame around. Therefore, in order to improve the product quality to fulfill customers’ requirement, as well as establish firm quality culture among employees, the management decided to hire an external quality consultant team to resolves the problems. 4.Problem Analysis
As hired by Dyson Ltd to resolves the various aforementioned challenges, we, as members of iConsultant will analyze its problems and
quality issues and to provide solutions and ultimately propose a quality management strategy.
Figure 4: Company logo of iConsultant Pte Ltd
4.1Root Cause Analysis
Our first step is to do up a Cause and Effect Diagram (Fishbone diagram) to identify the root causes for the problems faced by Dyson Ltd. Product
Productivity & Quality
Declining Quality & Strained Customer Relationship
People & Promotion
Ineffective way of handling feedbacks.
Incompetency in employees
Lack of innovation in Marketing
Same marketing strategy for all regions (market).
No standardization in managing feedbacks.
No on-site warranty
Poor after sales service
Almost 4x the cost of a regular fan.
Not well received by majority consumers
Unwilling to pay for the brand.
Not well received by majority consumers due to high price.
Imitation products retailed at much lower price with
almost same quality.
Weak Market Positioning
Buzzing sound .(noisy)
Weaker breeze while oscillating.
breeze generated is less consistent and steady.
Weak stability of the fan. Tends to topple easily.
The motor of the fan gets heated up fast hence causing the rear to be hot. Poor Product Design
Unable to meet retailer demand and hence customers demand.
Supply Chain Management
Insufficient inventory at manufacturing side.
Increase in defect rates over the years.
High return rate from customers due to malfunctioning parts. Production Quality
Figure 5: Fishbone Diagram
With careful analyzing of the all the root causes, the consultancy came to consensus that the following could be the main issues contributing to Declining Quality and Strained Customer Relationships. Substandard
Strained Customer Relationship
Figure 6:Identifcation Diagram of Potential root causes
With the main issues identified, iConsultant proceeded to carry out customer focused group discussion and employees interviews for in-depth understanding of the problems. 5.1Substandard Product Design
Customers have feed-backed that the fan produces a constant buzzing sound which can be very noisy. When the fan is set to its maximum setting, the noise generated is comparable to that of a hairdryer in operation.
In addition, the fan produces noticeably weaker breeze while in oscillation. This inconsistency in power output is not a problem in traditional household fans. 5.2Production Quality Issue
In order to meet increasing demand, Dyson chose to expand its supplier and contractor base. This has led to larger variation in the raw materials and final products. In the production department, audits and inspections have revealed an increase in defect rate from 200 ppm to about 1400 ppm from 2009 to 2011.
Reports from retailers have pointed to an upward trend in the number of products returns and appeals for customer refunds due to defective parts. 5.3Poor Supply Chain Management
The outbound logistics department has reported that the company’s supply chain is increasingly unable to meet the retailer’s demand. Inventory levels at the manufacturer’s plant are not high enough to be responsive to market. 5.4Weak Market Positioning
iConsultant further identified weaknesses in Dyson bladeless fan’s perceived value. Dyson has been focusing on the fan’s unique properties like the air multiplier effect which is a concept that is hard to grasp by average consumer. Surveys show that affluent consumers do not rank
the bladeless fan high against a regular fan. They are unwilling to pay a premium for the brand.
Dyson expand to more countries each with their own unique requirements. For example, in China there are more imitators which offer cheaper fans with the same aesthetics but in the UK, Dyson is the only brand that offers its patented design. However, Dyson used the same marketing strategy for all regions which focused on the same proposition and target users. 5.5Poor After-Sales Service
There is no on-site warranty even though the product is bulky and a hassle to bring to the nearest service center. Furthermore, complaints are handled by the different retailers each with their own customer service policy.
6.Strategic Quality Management
With a thorough understanding of the problems and issues faced by Dyson for its air multiplier product, iConsultant seeks to understand more about the company and the position of its product in the market to lay the ground for developing the strategic quality management plan for the company. 6.1Quality SWOT Analysis
A SWOT Analysis is first performed in order to identify where Dyson Ltd. could leverage on its strengths, address its weaknesses, capture possible opportunities and neuter any possible threats.
Figure 7: Table of Quality’s SWOT analysis
* Strong financial power
* Unique products
* First mover advantage
* Strong patent strategy to protect their inventions
* Strong commitment to Research and Development
* Large team of engineer to focus solely on creativity
* Reputation in the market place
* Increasing non-conformance in quality
* Supply chain unable to cope with growing demand
* High bargaining power of buyers due to the huge premium charged * Weak market presence in Asia
* Poor After- Sales Services due to non-standardization amongst retailers * Lack of eco friendliness in product
* Growing affluence of large developing markets in China and India * Lack of market competitors for similar products
* Government policy mandates the purchase of energy efficient appliances * Ability to diversify into related products and services.
* Cheaper generic products from China
* Erosion of brand equity
* Price wars with “Competitors”
6.2Matrix Data Analysis
Next, after conducting a market survey (Annex G) on the customer’s opinions about Dyson’s air multiplier product, and its main competitor, ABC’s tower fan, we perform a Matrix Data Analysis to identify the factors which require attention for improvement and also to know which areas the product stands as compared to the competitor’s product. To gather the necessary data for tabulating the Matrix Data Analysis table, a survey of customer’s opinion is done in order to acquire customer feedback on the air multiplier product and its main competitor’s product. Survey is basically structured as obtaining customer inputs on: (a) ratings of attributes for Dyson’s Air Multiplier product and its main competitor’s product, (b) ratings of importance weight of each established product attributes. Returned surveys are 89 in number, hence the sample size. Data are processed and what listed down below are the top 6 attributes, and calculation results of their overall importance weight and according ratings of the two products in comparison. | Importance Weight| Air Multiplier’s Rating| Main Competitor Product’s Rating| Lead/Lag| Price| 0.22| 4| 2| 0.43|
Noise Level| 0.19| 4| 4| 0.00|
Power Consumption| 0.11| 2.5| 3| -0.05|
Various Model| 0.11| 1.5| 3.5| -0.22|
Easy to Use| 0.16| 3| 3| 0.00|
Branding| 0.16| 4.5| 2| 0.41|
Post Sales service| 0.05| 3| 1| 0.11|
Figure 8: Table of Matrix Data Analysis
Figure 9: Radar Chart
As shown by Figure 9, Dyson’s product has the competitive advantages due to its established Dyson branding and post-sales services, but is found to be lacking in aspect of price and variety. In the technical aspect of noise level and power consumption, the product is less superior compared to the main competitor product. Therefore from this analysis, we have identified the following factors to be suggested to the R & D department for improvement: (a) Noise level, (b) Power consumption. 6.3Quality Strategy
Equipped with the knowledge about the company’s position in the market, and as well the relative advantage and disadvantage its product has over its competitor, iConsultant developed a strategic quality management plan. We recommend the following Quality Vision, Quality Mission, and Guiding Principles in order to focus the quality strategy of the company for the air multiplier product. 6.3.1Quality Vision
To become the only choice in cooling devices by designing air multipliers that exceeds customer’s expectations. 6.3.2Quality Mission
Profitable growth through
I. Superior customer service
III. Designing high quality and reliable product
V. Leadership in workforce training
Figure 10: Guiding Principles
6.4Broad Strategic Objectives
Brainstorming is then carried out by the iConsultant team and the people of Dyson Ltd to identify the Broad Strategic Objectives and the corresponding Specific Tactics. The Affinity Diagram, presented in Annex A is used for this brainstorming purpose. The Broad Strategic Objectives are as follows:
I. Achieve product excellence
II. Continuous improvement of current product, services & processes III. Continuous introduction of new products
IV. First class customer service
V. Market share dominance
VI. Staff quality organisation culture
The relationships between the Specific Tactics are mapped out using Relations Diagram, as shown in Annex B.
6.5Strength of Relationship between Broad Strategic Objectives and the Problems With the problems highlighted by Dyson, iConsultant decided to apply Matrix Diagram, presented in Annex C, to identify and analyze the strength of relationship between the Broad Strategic Objectives and the problems from the previous section. Based on the Matrix Diagram, the broad objective of First Class Customer Service has shown to have strong relationship with most of the problems. As such, focusing on fulfilling the objective of attaining First Class Customer Service will provide an excellent strategy to deal with the most of the problems identified.
As mentioned in Section 6.4, to achieve the quality vision, mission, and broad strategic objectives, specific tactics were formulated mainly using Affinity Diagram. These tactics will serve as a platform for the company to address Total Quality Management. I. To achieve product excellence
Specific Tactic| Description| Responsibility|
Quality control| Measure and review the quality of the incoming raw materials and outgoing products with robust checks and testing.| QAQC| Collaborative relationship management with contractor| Establish collaborative relationship with the contractor through communications | Procurement| Dedicated supplier| Ensure that the supplier is committed to the company to ensure quality of raw materials and components| Procurement| Figure 11: Table of Quality’s specific tactics on achieving product excellence
II. Continuous improvement of current product, services & processes Specific Tactic| Description| Responsibility|
7 Quality Control Tools| * Pareto Chart * C & E Diagram * Check Sheet * Histogram * Control Chart * Scatter Diagram * Flowchart| QAQCOperation| Quality assurance | Planned system of review procedures by independent third party parties, performed after quality control procedures| QAQC| Adopt current best practices| Process improvementDocumentation and dissemination of practices| All Departments| R & D commitment| Research and develop new technologies to improve current air multiplier product and processes.| R & D| Long-term agreement with supplier| Negotiate long-term agreement with supplier which builds collaborative relationships and protects the intellectual property of Dyson Ltd.| Procurement| Supply chain management| Ensure responsive and on-time delivery of products to retailers and customers while incurring minimal cost.| Procurement| Figure 12: Table of Quality’s specific tactics on achieving continuous improvement of current product, services & processes
III. Continuous introduction of new products
Specific Tactic| Description| Responsibility|
Anticipate customer needs through feedback| Developing platform for internal employee feedback and external feedback channels from customers, suppliers and external business partners to acquire knowledge on the local, regional and global customer needs and desires. Helps to increase customer retention, improve performance of products and derive innovative ideas. Customer ServicesSales & Marketing| R & D initiatives for product development| Investing in research and development to produce new products which address customer needs.| R & D| Concept testing| Presents the consumer with a proposed product and measures attitudes and intentions at this early stage of development for the purpose of measuring consumer enthusiasm.| Design DepartmentBusiness DevelopmentSales & Marketing| Conduct global surveys| Conduct a global survey of customer opinions to gain new insights on the customers’ needs and expectations and identify issues of pressing customers concerns. | Sales & Marketing| Figure 13: Table of Quality’s specific tactics on achieving continuous introduction of new products
IV. First class customer service
Specific Tactic| Description| Responsibility|
Improve after sales service| Implement a responsive on-site exchange policy. Ensure a comprehensive customer service policy which is consistent with the company’s image for all retailers.| Customer ServiceRetailers| Build customer rapport| Conduct a well-laid out customer survey and establish a convenient feedback channels for customers. Be forthcoming and honest with the customer-related policies & product information.| Customer ServiceRetailers| Reward retailers| The use of commission-based system for sales related job can spur retailers to provide. | Customer ServiceSales & Marketing| Figure 14: Table of Quality’s specific tactics on achieving first class customer service V. Market share dominance
Specific Tactic| Description| Responsibility|
Increase advertising scale| Concentrate on advertising to increase awareness and improve market positioning of Dyson air multiplier products.| Sales & Marketing| Customer profiling| Build customer portfolios to better meet their varying needs and expectations. | Sales & Marketing| Initiate market trends| The first-mover advantage in the market is gained by initiating new trends. | Sales & Marketing| Figure 15: Table of Quality’s specific tactics on achieving market share dominance
Market segmentation| Adopting different strategies for targeting different market segments such as geographic, demographic or usage segmentation.| Sales & Marketing| VI. Staff quality organization culture
Specific Tactic| Description| Responsibility
Staff training| Organize training sessions for employees to reinforce improve their service standards. Ensure commitment of the top management by encouraging senior managers to participate in training sessions.| Human ResourceCustomer Service| Staff involvement| Introduced an employee suggestion scheme such as “Decentralized Idea generation”.Introduce term such as “Associate” to foster involvement of the employees. Such moves enable employees see the bigger picture and emphasize the importance of their roles towards the quality improvement.| Human Resource| Staff recognition| Introduce reward systems such as monthly staff appreciation awards and performance based bonuses to recognize employees for their work contributions,| Human ResourceManagement| Staff motivation| Organize team building activities to foster bonding between employees and the management staff.This helps to create a culture of trust and self-confidence which can motivate employees to be committed towards the company.| Human ResourceManagement| Figure 16: Table of Quality’s specific tactics on instilling staff quality organization culture
6.7Sequence for Execution of Specific Tactics
With the understanding of the Specific Tactics and the departments within the company which are responsible for executing these tactics, we present the Arrow Diagram in Annex D to recommend Dyson follow the sequence of execute these tactics in order to achieve total strategic quality. 6.8Operational Planning Stage
The Tree Diagram is used to map out the explicit tasks needed for each of the identified Specific Tactics required to achieve the Broad Strategic Objectives. Based on the Matrix Diagram in Annex C, we have identified 4 important Broad Strategic Objectives which have strong relationship to the problems of Substandard Product Design and Production Quality Issue. As shown in Figure 17, they are related directly to the production of quality products. Figure 17: Broad strategic objectives to achieve Quality Products
Therefore, we make use of the Tree Diagram, presented in Annex E, to map out the task and paths of these 4 strategies down to the operational planning stage. 6.9Contingency Measures
Finally, the Process Decision Program Chart (PDPC) is used to identify potential events to prepare the company for possible upcoming challenges and counter measures should they arise. In this study, we present one of the main focus Dyson product strategies is to achieve product excellence. Given the importance of products success associated with Dyson long term objectives and mission, the PDPC is developed to further prepare the company for possible upcoming challenges and counter measures if they arise. This provides Dyson with better understanding of the product excellence strategy and offer contingency planning to improve corporate reaction time and responsiveness.
It is a great honor for iConsultant to work with one of the fast growing and highly reputable company like Dyson and believe that our recommendation and solutions will be put to good use. We would like to recommend a regular monitoring and reporting on the implementation of the quality management strategy across various departments. Constant training and appreciation of staff is necessary to keep the spirit going.
iConsultant will fully support Dyson in all ways possible to implement the proposed quality strategies. It is our belief that these strategies will help Dyson to overcome the current challenges and propel Dyson to become the leader in the market. We hope Dyson will soon become another name when it comes to “High Quality Reliable Products” .