Philips DAP Hastings engaged with the University of Brighton to benefit from a Teaching Company Scheme project. The work aimed to cut the rate of customer returns for fan heaters. I joined the scheme and took on the project a year after graduation.
I was assigned a university mentor. And the factory Quality Manager sponsored the project and acted as my industry mentor. However, fan heaters are seasonal products. So I recommended that I focus on transforming product quality for kettles instead. The factory made over a million kettles a year and its returns rates were among the highest in the group. My university mentor involved a statistical researcher. And we adopted the, then, infant six sigma as a framework and toolkit.
Transforming product quality with six sigma techniques
My goal was to cut the number of designed and manufactured defects in kettles measured by customer returns. I estimated the cost of each return as the same as the cost to make the product. [Today, I would add other costs into my estimate. Such as the cost of running the returns department, reputation costs, lost profit and disposal costs.]
At the time of my project, Philips assessed 20% of all product returns in each primary market. The UK returns centre was in Croydon. The Hastings factory also had a returns department which inspected all other returned kettles. These two departments provided most of my data. Their investigations revealed some technical issues, but they classed over half of the returns as ‘no fault found’. I asked the teams to record the stated reason for return, regardless of their findings. To get to the heart of the returns with no technical cause I developed additional data sources:
- Secondary inspection of life test kettles
- Home trials
- Retailer visits – to headquarters and stores
- Consumers – I contacted consumer through warranty data and sometimes by meeting them in-store. I visited two consumers at home to see how they used their kettles
I used statistics to analyse the quantifiable data and found the root cause of all technical faults.
For the non-technical faults, I used qualitative data to categorise and define the reasons for return.
With Design and Production Engineering I built a business case to eliminate technical returns. I also worked with Purchasing to address issues with the switch and elements.
However, most of my analysis focused on the non-technical faults. In those situations, I used influencing skills to build a consensus for change. The Industrial Design department adopted my suggestion to change colour for the current product range. Philips usually only changes colour on new ranges. On my recommendation, a water level indicator was introduced on the next model. Unfortunately, Marketing refuted the need to shorten the rolling boil.
To assess the impact of the improvements, I changed the data collection and analysis methods of the returns teams. These data showed improvements with the introduction of modifications and reflected growing customer satisfaction. I estimated the cost savings for future kettles at over half a million pounds a year.
- As well as transforming product quality:
- – I stopped the use of ‘no fault found’ replacing it with non-technical. The old term implied a problem with consumers and retailers and led to the belief that the factory could do nothing to improve.
- – I earned an MSc by Credit Accumulation and Transfer.
- – In my first week, I observed a repeated failure in life test. I persuaded the Design Engineer to make a minor modification. The design change probably prevented a return rate of around forty percent. And averted irreversible damage to our relationships with key retailers.
- – Working with our element manufacturer, I pinpointed a manufacturing process failure. Our support opened the door for purchasing to negotiate a price reduction
- – Changes applied to the existing product reduced returns by over 30%.
- – Changes applied to next product reduced returns by 60-80%, equating to £600,000 per year.
- – I coached design and production teams. Providing the ‘Voice of the Customer’ in seminars and decision making
- – I introduced the ethos that
“we are not selling a kettle, we are selling a cup of tea”
- – I applied learning to fan heaters, assessing returns and driving improvements in product marking and instructions.
- – Took up a permanent role, first as Supply Chain Quality Engineer and then as Design Quality Engineer.
- – As a permanent member of staff, I assessed products returned as part of legal claims for compensation.
Business analysis – applying statistical techniques, assessing qualitative data and providing business insight.
Project management – from defining requirements and setting up governance, to planning and delivering a range of cross-functional requirements.
Stakeholder engagement – working with major UK retailers at all levels, consumers and across the Philips organisation. I built an understanding of many perspectives and learned how to influence change.
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