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Specification Limits


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Specification Limit

 

Specification Limit - are the boundaries within which the products or services should operate in order to be acceptable by the customer. Any product / service which falls outside the specification limits is considered as a defect. Specification limit (more commonly called as spec limits) are usually determined by the customer. Other sources are research & development team, competition, regulatory bodies or industry standards etc.

 

 

An application oriented question on the topic along with responses can be seen below. The best answer was provided by Anirudh Kund on 29th November 2017. 

 

 

Question

Q 55. How can specification limits be decided for characteristics of an innovative new product with which customer neither has an experience nor an expectation? Assume that the company creating such an innovative product does not want to expose it to the market or customers before launch.  

 

Note for website visitors - Two questions are asked every week on this platform. One on Tuesday and the other on Friday.

 

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How can specification limits be decided for characteristics of an innovative new product with which customer neither has an experience nor an expectation? Assume that the company creating such an innovative product does not want to expose it to the market or customers before launch.  

Asking foundational consumer questions is a good starting point when translating a concept into specific product attributes and guardrails.

The objectives of this research are to

  • Establish the absolute must-have product attributes in order to deliver on consumers’ expectations set by this concept.

  • Create clear product and package guardrails, within which further product development should occur.

  • Prioritize potential process or formulation options by obtaining consumer feedback on early product or package prototypes, and

  • Explore with consumers any potential areas for further concept optimization.

 

 Though we know that New Product development passes through 5 stages like Idea Concept, Initial Feasibility, Development, Scale Up, and Lunch & learn. However in the above condition the Organization wants to lunch an innovative product but does not want to expose to the market or customer before lunch. 

In such scenario, following questionnaires may help in Idea Concept phase  

a. What is the target consumer experience and emotional cues?

b. What are the key "must have" attributes? Is there a priority?

c. What are the key "delight" attributes that should be included if feasible?

d. What are the key differentiator attributes that uniquely drive marketplace differentiation?

f. What will make this product most usable for the consumer?

e. 5 Senses Attributes: Sight / appearance

h. 5 Senses Attributes: Smell / aroma

i. 5 Senses Attributes: Sound

j. 5 Senses Attributes: Taste / flavor

k. 5 Senses Attributes: Texture / mouth-feel

l. What are the conditions under which this is likely to be consumed/used

j. Regulatory considerations for product or ingredients – Domestic/International

K. Product manufacturing platform

L. Can we use existing equipment, or modified or new equipment is needed?

m. Packaging requirements

 

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Given the challenges faced by the product development team, in a QSR set up, only to decide what product to build due to the constant conflict of interest within the internal stakeholders/ departments (Operations, Marketing, Strategy, QA ,Suppliers etc) the additional terms in the question for this paper is a real brain tickler.

Ideally , the product specifications are developed from the suggestions and recommendations of the end customer .A  proper analysis of the needs of the customer is aligned with the Business perspective and a  PRD is prepared for the same and the specifications are based on the inputs that are received from the customer’s expectation. However, as per the precondition mentioned in the question, the product in ideation is innovative and the customer has neither experience nor expectation. Also, the assumption is that the product should not be exposed to market or customers before launch..

Hence , in the given scenario, the product development team will not rely on the customer to translate their requirement into specification but will need to write the requirement for a product that the broader market needs and will buy or invest in.

 

The best way to start in this situation is to start with the problem- A well-articulated problem statement which covers the need of the market. The problem statement should be drafted from the perspective of the person that has the problem. The objective should be to understand the problem and the sense of the value associated with solving it.

Though not idealistic , let us envisage the parts of the  problem statement for a New product in the menu that a Product development team in a QSR set up would draft.

 

Part#

Part detail

Example in short

1

The first part is the description of the persona who has the problem. This should be in detail

People with crunched time , health conscious, craving for “regular Indian” meal (Breakfast). They  prefer to have “on the hop meals”.for them meal time is a part within the work time…i.e meals are done during meetings- The busy metro executive

2

Description of the Problem- As much in detail as possible- The problem itself can be given a Name which can be then used as the point of reference during the whole project period.

They are unable to prepare breakfast “at home” and are looking for best options on their route to work

3

Jot down the frequency of the problem- It is worthwhile to pursue the project only if the frequency is high and the impact of the problem is high on the business opportunities. Obviously the value of the solution to this problem(product) will be appreciable.

Every day- every morning and evening for a snack during tea break

-          .

It is imperative that the above brainstorming session must involve the line managers, who are the closest touch points of the last mile at the end of the value stream. They would be able to express the problems the customers face and obviously how that impacts the business. If this activity s done successfully, it will end up to the identification of the problem that can be solved with the innovative product and the customer will be happy to pay for it- this gives rise to an opportunity  and good grounds for a new innovative product.

 

The idea from hereon should be to give the product development team complete autonomy in creating the product within any constraints that may be there like:

-          Availability of resources

-          Budget

-          Space required at the outlets to manage the product flow – from inwards to outwards

-          Pricing slabs – The Menu management and strategy team would have a price range that the final product will need to be placed within.

The product development team then , within itself  needs to get the final problem statement drafted with solutions : It is prudent to Use the Six thinking Hats in this exrcise

-          Start by appointing a group of people who are responsible to be the voice of the customer.

-          Let this group identify the market problems solely based from the information gathered from the line managers.

-          The discussion needs to be documented and should be ccssible by all the team members.

-          Each problem needs to be jotted down along with a justification that explains why the problem exists and how important it is to solve.

-          Keep reminding the team of the main goal (problem statement) so that there is no deviation from the objective while developing solutions.

-          Capture a list of the product features, for each problem, that will solve the problem

-          If any problem seems to be unsolvable or not fully solvable, continue to re- review the business case to ensure that the product is still viable for market release.

From Problem Statement to Deciding the Specification Limits.

Once the problem statement and the solutions are finalized, the team needs to develop the specification limits. From the problem statement exercise the team now has enough information to draft the specification. The best approach is to ensure that the specification limits are set in a phased manner – ie. The specs of the products need to be checked at the highest range of variation within the spec limit, after every release of specification to ensure that the same is in sync with the problem statement and the product is still a valid solution and the customer will be happy to pay the defined price. The biggest goal in the QSR for daily operations is to provide value for money.

The objective of this periodic check is to ensure that there is no trade-off ,which is inherent in the process of product development and also to ensure that the product is always within the limits which will keep the product aligned to the original target.

Defining the specification limits based as mentioned above will keep all stakeholders happy as the process will be under control and there will be a framework and transparency that will prevent overriding of decisions , lesser associated wastages and faster delivery of product.

Though it is a risk to launch a product which is not tested or sampled amply, if the effort to resolve the problems is taken effectively half the battle is won and the approach of launching the product directly can actually save costs of sampling and testing and can be a faster approach as compared to the conservative method. It may actually come out as a more fruitful approach to pleasantly surprise the customers than to deliver another iteration of something you are already serving. I know of a QSR which is coming up with the option of “UPMA” & “Steamed Idli” as a Breakfast & snack product. The products are precooked and in frozen condition and can be easily steamed in steamers within 3 minutes for hot and quick service. It will delight the customers who have similar problems as mentioned in this note.

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Specification limits:-

Specification limits are the values between which products or services is accepted or rejected. Generally, customers give specification limits. Specification limits can be one sided, or two sided.

One-sided specification: A specification limits set only at one point, for product to be accepted or rejected.

As an example, defects in product. There can be only upper specification limit for defects.

Two-sided specification: Specification limit that are set at two points, A product is accepted only if that parameter falls in the interval created by two specification limits.

Upper specification limit (USL): A point above which the parameter measured is rejected.

Lower specification limit (LSL): A point below which product is rejected if the measured parameter goes below the specified point.

Target (T ): The single point where the parameter should hit.

We should be cautious while defining the specification limits, because if we set the specification limit too liberal, we will be always within specification when we produce the product. However, customers will not be happy to see so much variation in the product of different batches.

Similarly if we set the specification limits too stringent than what customer wants, we will waste too much resources in meeting those specification. In addition, customers will be happy because they get more than what they expect.

 

How to decide specification limits for innovative new product.

1.      We can look at other similar product in the market, and consider the specification of that product as benchmark.

2.      If we are already making similar product, and the new product is an upgrade, enhancement of previous product, than current specification can be taken as a benchmark.

3.      When there are multiple component in our new product, we can look at the specification of all other components and take some of the specification as out benchmark.

4.      If we already had a trial run for the new product, we can record reading of all the parameters for which specification limits are to be defined& based on the sigma level we want to produce, we can decide the specification limits.

If we decide specification at an early stage of new product development, we may be able to produce product within specification, but it may fail to meet customer expectation/requirements. It can restrict the innovation if the designers/engineers are told to meet all the specification without any changes.

On the other bright side specification can help design team on how to meet the requirement. Which specification are not easily achievable, and how much resources are required to meet those specification. Each defined specification should be questioned for its purpose and how it will enrich customer requirement. Questioning the specification and looking for alternate solutions will result in truly a unique/innovative product.

Similar to target/KPI’s Specification limits should follow SMART rule.

S - Specific: - Specification should be specific; there should be zero chances of misinterpreting those specifications.

M - Measureable: we should be able to measure the parameter for that specification, if we do not measure, we cannot control. Therefore, it is very important that the specification should be measureable

A -Achievable: - our process should be capable enough to meet the specification.

R - Relevant: - our specification should be based on customer’s actual needs; specification should be able to define the performance of our product.

T - Timeless: - we should be able to be within the specification timelessly when our process runs with normal variations.

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Every product is expected to provide a service to its customer. Even innovative products are welcomed when customers sense a value added service that is provided by such products.

 

Value addition as perceived by customers

Let’s take an example of a product such as “Pressure cooker”, whose invention would have happened more than a century ago. If we were to provide specifications for such a product, before it ever hit the market, it would have had to be referenced to a baseline; viz. time taken for cooking a certain quantity of food under a given condition. The specification would then be ‘how much time would be reduced from the baseline to perform the same cooking’. This is something which the customer will be able to experience rather than specifying something like ‘the level of pressure’ or ‘the boiling point of water during pressure cooking’ etc. Such technical specifications will however be useful internally but will make sense to customer only when the product is familiar and the concept understood and accepted.

 

Evolving expectations

Moving on with another example…. Nowadays, it is expected that a smart phone is equipped with a camera. So much so, that in most of the ads, the importance is given to the specification and features of the camera as a unique selling point, rather than the basic phone’s features! When this innovation of having a camera along with a phone was first conceived, the very fact that one can own a phone with a camera would have been an exciting feature. In such a situation, if the specification states that the phone can also be used as a camera, it would have attracted attention. However, in today’s situation, more detailed technical specifications such as the megapixels, aperture sizes, sensor quality etc. are essential to differentiate the product.

 

Begin by specifying with customer P.O.V.

Understanding customer pains, preferences and current market offerings are very important while venturing with an innovative product. The specifications from a customer point of view will have to be decided with reference to the baseline information on the service that is to be provided by the product. Such inputs once mapped on a Quality Function Deployment (QFD) template should be used for deriving the technical specifications and subsequently the process specifications

 

Focused Customer field trials

For consumer products like home appliances, it is common to adopt methods such as “Customer Use Field Trials”, where the product prototypes are provided to selected customers, mostly the trusted employees of the organization to feel and experience the features, especially the innovative ones, and obtain the feedback. By this approach, the specifications for such features can be evolved and fine-tuned.

It is common in the software industry to come out with alpha versions, which are primarily restricted to employees of the company, and beta versions that are used with a wider range of select customers.

 

Other than the innovative portion – specify competitively

There are certain fundamentals that need to be complied anyway. If the product is having features that are already on existing products in market, apart from the innovative features, then the specifications for the existing features should be within the competitive limits. Similarly, if there are statutory requirements with respect to safety and other laws of the land, such requirements must have specifications within the stipulated norms.

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It is indeed a challenge to visualise even the characteristics of a totally new product, let alone decide their specifications. But following are some of the options available for making the best of an inherently difficult situation.

 

1.    Benchmark on split characteristics

The product as a whole is not available in the market as this organization is the pioneer of this. But various features or characteristics of this new product could be available singly or in combinations in various other products already in the market. The specifications for these characteristics could be used as a basis for deciding the specifications of the same characteristics for the new product. The same specifications need not be blindly replicated, but they can be started off with and appropriate adjustments can be applied.

 

2.    Simulating End-user experience

From the customer, whatever information available on the intended end user experience needs to be gathered. The various objectives which the product would achieve both for the customer and for the end user needs to be assessed or atleast a fair idea of them needs to be documented. From the above, a realistic table top simulation of the end user experience will need to be executed. When this is done, the organization progresses some way to understanding what its customer wants his customers to experience with the new product. From this understanding, the specification of various features for giving this experience to end users can be deduced.

 

3.    Technical Absolutes

Another option would be to go in for the best the technology available can offer and negotiate an appropriate agreement with the customer on absorbing the cost of the initial investment. After prototype production is done, the specifications can be scaled down from the technical maximums to suit the intents. The option of correcting specifications as the organization, the customer and end users become more knowledgeable about the product needs to be kept alive

 

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Prerequisites for creating a new product

1.       Study the market and observe how it is

2.       Then reflect upon the products that your organisation have

3.       Measure or identify how much the existing products lag behind the market needs

4.       Decide the target recipient for this

5.       Decide the technology in which you want this to be designed and created

6.       Decide what and how exactly you want to do with your new product  

7.       Produce a prototype and check if it can match to your expectation, when converted to a

full-fledged product development

 

Step 6 is what needs to be focussed. How to design and develop your product? How do you decide your product specifications?  Let us discuss in detail.

 

1. What are the Critical To Quality (CTQ) Characteristics that is used for this new product innovation? For any product that needs to be created, the key is the characteristic that can affect the product. Based on the voice of the internal customer(s)/stakeholder(s) , the CTQ should be obtained. The CTQ should be measurable.  

 

As a hypothetical example, let us say an IT company uses some key Mainframe based products (read applications). Now as an innovation, the company wants to integrate seamlessly these products with some java based products.  Instead of coordinating with the mainframe based products, it creates a new product which runs on SpringBatch software (based on Java POJO development approach, rather than traditional Mainframe Batch). Now the important characteristic that is looked by the team is the ‘response time’.  How quick, we are able to retrieve the data.

 

2.  How to decide on the specification limits for the CTQ characteristic?

      - This can come with experience /knowledge of the personnel involved  

      - This can be set based on the limitation of technology / development process itself

      - This can be based on the limitation on external conditions, in some cases

       - After many trial and errors  

      - Prototype sometimes can provide a pointer as to what level, we can set the specification

        limits.

 

3. One of the best ways to put your thoughts (of having new product) into action is usage of Quality Function Deployment (QFD) tool.  QFD provides a process for planning new or redesigned products and services. Of course, the input to this is Voice of Customer (VOC).  The QFD matrix helps illustrate the linkage between the VOC and the resulting technical requirements. The VOC here would be internal and could be primarily from the observation/study on the market.   With the QFD, the functional (product or customer) requirements can be converted into technical requirements.  

 

4. Once the specification limits are known, it can be put in, during the design phase of the product, thereby having a better product once it is developed.

 

Conclusion               

Setting the Specification limits upfront for critical characteristics of a product is important as it can help in better design of the product. Often this is missed out and at times, the product may not get the due it deserves if this is not addressed.

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First possibility is to explore and see if the characteristics of this new product be benchmarked against any existing products. Also exploration can focus on arriving at optimal levels for these characteristics during design of the product itself. Design Of Experiments can be explored if applicable for the scenario to arrive at specification limits for optimal performance of the product. During customer voice gathering focus can be on finding out expected performance of the product, which during designing can be converted to quantified characteristics which can produce the expected experience for the customer.

To make this process of defining specification limits for characteristics of an innovative new product effective, focus on vision of the product, derive business objectives from the vision, further derive operational objectives of critical characteristics required for the product and further explore on the specification limits for the product.

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Specification limits are the voice of customer. Specification  defines the allowable deviation from the target or standard.  On the other hand Co trolley limits are voice of process.  For any process,  specifications limits decides by the customer and we work according to thosd limits,  if we found  any value going beyond the limits,  indicates process is out of control or there is some problem going in process and we start to work on it to come neroli again within specific limits.  We find out whether a process is stable or not,  capable or not with the help of specification and control limits.  If a product us existing I market we can go for specification limits,  because we can get it through various methods but if a Company does want to disclose its product into market then the biggest question of deciding specification limits without having voice of customer. 

Company is making product for customer but does want to open before launch,  in this case company has some target for its innovation and they have planned the implementation or application of their product.  According to their application of product,  company will plan accordingly specification limits of the processes and will check control limits,  design team will consider control limits as a part of 6 sigma so that process can be controlled within limuts.  SPC study will be done to find out process stability.  Process capability will be calculated to find whether process is capable or not.  Statically tolerances will be decided for the product and it's manufacturing and assembly both. 

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Specification Limits:

 

Specification limits are usually the limits set from customer expectations (Based on VOC).

How can specification limits be decided for characteristics of an innovative new product with which customer has neither has an expectation nor an experience?

 

First of all if there are no limits set by customers or expected by the customers, then calling it as specification limit is not a great idea.

The specification starts from customers.

 

In this case where there is neither an experience nor an expectation from customers, then we can call it as control limits rather than specification limits.

 

In case of an innovative new product, there could be several things be considered while setting the limits ( be it control or specification)

 

1.    If there is already a similar kind of a product already available in the market, then the expectations from that product could be considered as specification limits ( with slight alteration based on specific details of the new product)

2.    Visualization: The designer or the innovator could visualize what he/she would have expected from such a product. The specification limits could then be considered & further worked upon fine tuning them based on trial & error methods from the actual production.

3.    Must & should factors: There are some factors which are a must & should to be considered in the product & these kind of inputs will help to set the limits. In this case it will be more of a control limits, but then these CL can later be converted into SL.

4.    Just with the mere production: Since we don’t have any idea of what could customer expects, or as it is the new product, the limits can be analyzed based on actual production. The feasibility of achieving the limits based on the actual production as well the possible improvements from the actual production could be combined to set the limits. In such case these limits could be set as control limits and later with some fine tuning these could be converted as Specification limits

5.    Importantly, if we want not to expose the product to market before launch. It is easier.

In this case as the customer will be facing an entirely new product, meaning an entire new experience. Hence there is no requirement of setting any specification limits at this stage. But the expectations can later be build up by customers, in such cases reconsidering the limits based on customer expectations will give us direct limits of specification.

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Specification Limit: - It’s the boundary of acceptable values from unacceptable values, i.e., a range of values which accepts, outside that range is unacceptable.

 

There are few types specification limit –

a) One sided – when you need a limit for one side only per transaction like when you are buying 1kg of rice, anything above 1kg is acceptable to you.

 B) Two Sided – when you need both the side’s limit like for Navy job your minimum age should be 17 and maximum should be 22, that is lower limit is 17yrs and upper limit is 22yrs.

 

c) Upper specification limit [USL] – it’s expect a value above of that no other value is acceptable. Like for hit of 100m race you should finish the race by 10.30sec or else you are not qualified, so here the upper limit is 10.30sec, or say you are participating in under 19 cricket tournament here also upper age limit is 19yrs.

 

d) Lower Specification limit [LSL] it’s expect a value lower of that no other value is acceptable. Like for marriage in India legal age is 21 for men & 19 for women, here 21 & 19 are lower minimum age limit for legal marriage in India.

 

e) Target – It is when you expect a specific single value for a process/characteristic. Like in ‘Boxing’ category 56kg means – candidate’s weight must be 56kg, or when you are using petrol pump the diameter of the pipe should be exact to get 1ltr or 2ltr etc. on certain time.

 

How should we select Specification – For this, the famous acronym we use RUMBA =>

1. Reasonable, 2. Understandable, 3. Measurable, 4. Believable, 5. Attainable/Achievable

1. Reasonable: Here we check two things-

a. whether the specification is realistic as per customer need or not?

b. Whether it is directly related with performance of the characteristic or not?

2. Understandable: here we check whether the specification is confusing or clearly described or can be misinterpreted?

3. Measureable: whether the performance can be measured as per specification or not? Otherwise it will lead to unsatisfied customer/client.

4. Believable: Into specification it should have bought and to meet the specification -team should strive.

5. Attainable/Achievable: whatever specification have been set, the performance should meet it.

 

Sometime customer are not involved directly with your job/task/process and you also have not interacted with them directly but a characteristic specification is generally available, or if you have customer interaction then you can set value range specification correctly up then can check which characteristic is acceptable to customer. Hence a Voice of Customer [VOC, in short] can represent specification too.

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For a new product, for which VOC is not known, specifications limit for critical parameters can be simply fixed at x bar +/- 6 sigma, where x bar is the mean value of critical parameter when production is carried out under standard conditions and the product also meets the test qualification criteria. This will ensure 6 sigma process without any additional cost. Once the product is launched, VOC would be known and it can be used to fine tune the specification limits.

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Q 55. How can specification limits be decided for characteristics of an innovative new product with which customer neither has an experience nor an expectation? Assume that the company creating such an innovative product does not want to expose it to the market or customers before launch.  

 

It’s a natural process to set specification limits for products on the process – the upper and lower control limits. It is sometimes designated by producer or as defined as quality or by the customer or client.

It is something that is forced upon by someone and it is not a natural variation or part of the process.

 

If it is a new product – how do we set the specification limit?

 

1.       Defined In the market – As the same type of product is available in the market, the market analysis on those type of products through survey method or interview or the product banners would help us understand the spec limits. This would help us to set spec limits for new product.

 

2.       Defined by the process – As per the internal process standards and policies, the spec limits would be set to sustain the reputation achieved in the market.

 

3.       Defined by the internal management – Some times the internal management would recommend the team on specific spec limits to maintain the quality of the product to lead in the market.

 

4.       As part of trial and error method – if the product is under innovation, then the experiment is conducted  in order to achieve the quality or standards set for the process or the expectation whether achieved. Many experiments are conducted under controlled environment and the findings are recorded to create the spec limits to maintain the highest standard of quality.

 

5.       AS part of tribal knowledge on the product usage – The innovated product is given to few users or customers to try out if the need is met, which is collected as verbatim through surveys from customers. Hence the tribal knowledge on the product usage helps in testing the spec limits.

 

Conclusion:

The specification limits are primarily for interactions with customers and management. Also, specification limits do facilitate determination of useful product disposition limits. Additionally, they can even play a role in determining required sensitivity levels in setting process control limits.

 

Thanks

Kavitha

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The twist to this question definitely made it very interesting. It was great going through all the responses and a lot of creativity shows through in the answers.

 

The best answers are those of Anirudh Kund, Rajesh Chakrabarty, Venugopal R and Mohan PB. It was rather tough to choose the  best answer to this question as everyone has brought out one or the other unique way to act in this situation. The best answer amongst these 4 is that of Anirudh as it mentions many of the pertinent questions that can be asked in such a situation. The rest of the answers are worth giving a thorough read, too.

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