It uses a planning matrix to define the relationship between customer requirements and the capability of the product and the company to satisfy these requirements. Because this matrix looks like a house, where customer requirements and product attributes resemble the main living quarters, competitive analysis resembles the porch, and the correlation matrix resembles the roof, it is called House of Quality.
It starts with customer requirements. The customers for a product or service are identified and their requirements from the product or service are gathered using different tools such as focus groups, surveys, and customer experiences. A structured list of customer requirements is then drawn by analyzing and organizing this data using tools such as affinity diagrams and tree diagrams.
Importance ratings are used for quantify the customer requirements and rated according to their importance on a scale of 1 to 5. This rating will be used in the relationship matrix at a later stage.
Another element is the Competitive analysis where customers views about the competition are gathered through research to provide a better understanding of the market. Here, the customers rate an organization’s products or services against competitors’ products or services. Also, Technical requirements that are not known to customers are identified and documented. These requirements generally stem from management or regulatory standards that a product must meet.
Relationship matrix defines the relationship between customer requirements and an organization’s ability to meet those requirements is determined. The relationship between the two factors is classified as weak, moderate, or strong and given the values of 1, 3, and 9, respectively. Even, in Importance weighting rating, Customer requirements are weighted according to their importance for defining and prioritizing key criteria. The relative importance of customer needs and the company’s and competitor’s performance are taken into account while calculating this. Target values for each product or service attributes, known as technical descriptors, that can be used as benchmarks against competitors’ target values are established. These target values are the “how much” of these product or service attributes.
The technical descriptors are compared with the competitors’ technical descriptors using scientific analytical techniques to assess their properties is called Engineering analysis. This also includes reverse engineering competitors’ products or services to determine the values for their technical descriptors. Correlation matrix is the relationship among customer requirements are analyzed to identify correlated requirements. The relationships are then ranked for determining areas of improvement that need to be focused upon.