House of Quality Diagrams

The first House of Quality was developed in 1972, when Mitsubishi Heavy Industries used it to help design an oil tanker. Since then, it's been used widely, and can be applied to services as well as to products.

Building Blocks

The House of Quality has six main sections:

1. Customer Requirements – the starting point for the design process.
2. Planning Matrix – information on how the market sees current offerings.
3. Technical Requirements – a translation of customer requirements into in-house technical specifications.
4. Interrelationship Matrix – a table showing how customer requirements affect individual technical specifications.
5. Technical Correlations – these show possible compromises you may need to make, or opportunities you can take advantage of.
6. Design Targets – the final output, defined using all of the information above.

These sections are laid out as shown in figure 1. (This arrangement should become clear as we work through the example within this article.)

Reprinted by permission of Harvard Business Review. From "The House of Quality" by John R. Hauser and Don Clausing, May 1988. Copyright © 1988 by the Harvard Business School Publishing Corporation; all rights reserved.

To illustrate how to set design targets using the House of Quality, we'll work through a simplified example of a company planning a new pen product.

The steps for building a House of Quality diagram are as follows:

1. Determine customer requirements.
2. Compare existing products and the planned products.
3. Define the technical requirements.
4. Create the interrelationship matrix.
5. Identify conflicts and leverage.
6. Set design targets.

Let's look at each of these steps in more detail.

Step 1: Determine Customer Requirements

This is the first part of the House of Quality that you build, because customer requirements must drive the organization's activities. If you try to do the reverse (by pushing product features instead of responding to market needs), you can find it hard to make sales.

You can also label this block "The Voice of the Customer." It contains a list of customer needs, using typical customer vocabulary and language. The information is often gathered through conversations with customers, and by listening to their needs and problems. You can then group the different needs and problems into subcategories such as functionality, performance, usability, and so on.

Figure 2 below shows an example of this first block, showing customers' input on their needs for a pen. In figure 8, you can see where this fits into the final House of Quality diagram.

Step 2: Compare Existing Products and Planning

With the second part of the House of Quality, you look at how competitors' products and your products compare according to these customer requirements. This helps you work out how important each requirement is, and it helps you think about how far you need to improve your existing product.

This table fits on the right hand side of the House of Quality diagram, and it looks like figure 3, below.

In this example, the first three columns show data from customer surveys, showing customers' scoring of the importance of different requirements, and their perceptions of your products compared with those of your competitors. Here, we're representing these scores running from 1 (lowest) to 5 (highest).

The fourth column shows the satisfaction scores we want from our new product, and the fifth column shows an improvement factor, defined as:

1 + [(Planned Satisfaction Rating – Actual Rating for Our Current Product) x 0.2]

The sixth column, headed "Selling Point", indicates how far each customer requirement is actually a selling point for customers, which is an important factor in deciding how much attention to give it. The convention here is to use a scale of 1.0 to 1.5 for the extent to which a customer requirement is a selling point. Again, consider varying this factor if it doesn't give you the results you think it should.

The final column gives the customer requirement an overall relevance weighting, calculated as:

Overall Rating = Importance to Customer x Improvement Factor x Selling Point

Step 3: Define the Technical Requirements

Now it's time for the "Voice of the Company." The product described in Step 1, in terms of what customers want, is now described using in-house, technical terms. The design team produces this information, listing product characteristics that you can measure and that relate to meeting the customer expectations from Step 1.

You can show this information in a similar way to Step 1, grouping the separate items into categories. You can also add a row of arrows, pointing up or down, that indicate how the characteristic should be improved for higher customer satisfaction. For example, a down arrow for Pen Tube Diameter shows that a smaller diameter is preferable, and an up arrow for Refill Duration shows that a longer-lasting refill is better.

This is shown in Figure 4.

Step 4: Create the Interrelationship Matrix

This step links the Customer Requirements from Step 1 with the Technical Requirements from Step 3. Systematically analyze each customer requirement in terms of its relationship to each of the technical requirements, and determine the significance of the relationship. In each grid space, put a symbol to show whether the interrelationship is of high importance, medium importance, low importance, or no importance at all.

Then give each symbol a certain number of points depending on the level of importance it stands for. For example, you might award 8 points to high importance, 4 points to medium importance, 1 point to low importance, and 0 points to no importance. How you score each symbol, or ranking, depends on your particular project. (After you complete your House of Quality diagram, you may want to revisit this scoring system to see how different scorings affect the outcome.)

Figure 5 shows the matrix for our example, combined with two previous blocks from Step 1 and Step 3.

Step 5: Identify Conflicts and Leverage

After creating the interrelationship matrix, there may be conflicts in the technical requirements that correspond to different customer requirements.

For example, a requirement to make a product stronger may mean making it heavier – but perhaps customers also want it to be lighter. So, for each technical characteristic, use Step 5 to rate each combination of technical characteristics. In our example, higher manufacturing precision will allow the pen to have a narrower tube diameter, but having a longer refill duration conflicts with the wish to have a narrower tube diameter.

This is what creates the "roof" of the House of Quality, shown in Figure 6 together with the block from Step 3.

If improving one technical characteristic leads to weakening another one, then put a "minus" symbol in the corresponding cell. On the other hand, if it leads to improving the other characteristic, then put a "plus" there. Of course, you can choose other symbols or use different colors to show the strength of this improvement or the extent of this weakening.

It's up to you to determine how to resolve these conflicts. The value of the House of Quality diagram is to show where compromises may be necessary, or where opportunities exist to leverage a single improvement in several areas.

Step 6: Get the Final Result

This final step brings all of this analysis together to identify the following:

1. Technical priorities.
2. Competitive benchmarks.
3. Targets.

The first row in this section identifies Technical Priorities. To calculate this, multiply the value associated with each symbol by the value of the Overall Weighting score in its row, and add these values up.

In our example, the technical priority for Pen Tube Diameter is calculated as (4 (yellow circle) x 7.8 (overall weighting for Long Lasting Refills))+ (8 (red square) x 3.1 (Overall Weighting for Fits in Any Pocket/Purse)) = 56.0.

The next rows identify the Competitive Benchmarks that must be met or beaten – these are usually characteristics of existing company and competitor products. In our example, Competitor A's best product has a Precision of 0.002 percent, a Refill Duration of 12 weeks, and a Pen Tube Diameter of 5 mm. Your new product has got to be better than this!

Finally, the Design Targets row shows you the characteristics of the product you want. You decide what these should be, based on your judgment and on the rest of your analysis. What's certain, though, is that you need to provide a product with technical requirements that your customers' value; that are better than existing products in important ways; and that can be manufactured cost-effectively.

You can see our example of this section in Figure 7.

Figure 8 shows all of the pieces of our example House of Quality diagram, brought together in the final diagram (click to enlarge).