1. Antin Korotkov OISM 470 Section 4 02/14/02

2. Taguchi & Quality Loss Function2)
This slide show will first introduce Dr. Genichi Taguchi.
After introduction to his methods, the show will concentrate on his Quality Loss Function.

3. -Quality Loss Function
Topics Covered
Dr. Genichi Taguchi
The Taguchi Method
-Quality Loss Function 3)
This slide includes topics such as background on Dr. Taguchi, and his famous Taguchi Method.

4. Dr. Genichi Taguchi
Widely acknowledged leader in the U.S. industrial quality movement.
Credited for starting the “Robust Design” movement in Japan in 1950’s.
Helped correct postwar Japan's telephone system.
1980 introduced Taguchi method to AT&T. 4)
One of the great engineering achievements of the 20th century is Dr. Taguchi's comprehensive system of quality engineering. Due to Dr. Taguchi’s methods, the Japanese industry thrives on the production of world class, low cost, quality products. Dr. Taguchi's found his new philosophy in the early 1950s when he was recruited to help correct postwar Japan's telephone system. In 1980, Dr. Taguchi joined with AT&T to introduce his great achievement. In 1982, the American Supplier Institute introduced Dr. Taguchi and his methods to the U.S. market, which led to a reduction cost of hundreds of millions of dollars worldwide(2).

5. The Taguchi method Quality Robust Design Quality Loss Function 5)
The Taguchi Method defines Ideal Quality, Quality Loss Function, and his philosophy of a Robust Design.

6. Quality
Ideal Quality
- reference point (target value) for determining the quality level of a product or service.
- delivery of a product or a service that reliably performs it’s intended use throughout it’s life cycle under reasonable conditions. 6)
Taguchi did not agree with a traditional conformance to specification design, instead he adopted his own philosophy. He believed in Ideal Quality, which refers to a “reference point or target value for determining the quality level of a product or service” (2). In other words quality of a product should have some kind of a target value, which specifies product’s critical characteristic. After determining this target value and altering characteristics, a product should perform its’ intended use throughout its’ life cycle.

7. Robust Design
“An Engineering methodology for improving productivity during research and development so that high-quality products can be produced quickly and at low cost” (1).
Products and services designed defect free and of high quality
A design with minimum sensitivity to variations in uncontrollable factors. 7)
Because Taguchi believed that there is a specific target value of a product or a service, instead of conformance to specification, he adopted a concept called Robust Design This concept includes production of defect free and of high quality products or services. This design also has to have a high tolerance for uncontrollable factors. In other words, besides designing a defect free product, this product has to guarantee that it will perform beyond it’s intended specifications.
For example, engineers in a automobile industry test their product’s tolerance level through a reliability technique called, Highly Accelerated Life Testing. The concept of this design is to make a product more reliable and of high tolerance.

8. Quality Loss Function Defined
-economical and societal penalties incurred as a result of purchasing a nonconforming product. 8)
Quality Loss Function measures characteristics of a product and determines economical and societal penalties caused by deviation of these characteristics from a set target point(2).

9. Determining Quality Loss Function
Specifications are set
Specify a target with minimal variation
Increase in variation cause loss to society 9)
Quality Loss Function specifies three basic rules. First is to set your specifications, then specify a target, and finally allow some variation. These topics will be covered in the following slides.

10. Set Specifications Loss to society
-Product rejection -Product rework -Pollution
10)
When setting specifications, we must first determine the threats. These may include product rejection, product rework, and even pollution. Once we determine the threats we may employ the “Quality Loss Function”.

11. Specify a target with minimal variation
11)
As mentioned earlier, each product has specific characteristics, which should have an appropriate target value.
The picture gives an example of two steps to setting the target. The first step is to reduce variation, and second to adjust the mean to target.

12. Specify a target with minimal variation
Disagreements with standard quality
12)
This is a standard quality graph. It’s x-axis represents “Performance of Characteristics”, while y-axis represents “a Loss To Society”. Lower Specification Limit (LSL) and Upper Specification Limit (USL) represent Customer Tolerance Level. Taguchi disagreed with it because there is no exception to “conformance to specifications.”
If the target characteristic deviates a short distance away from the set target, then in the long run it will cause Societal Loss.

13. Specify a target with minimal variation
Quadratic Loss Function
13)
A new line, shaped as a football cut in half, represents how losses to society rise quickly as the target gets outside of the Customer’s Spectrum. Taguchi used Quadratic Loss Function to determine that any variation from specified target would cause a loss. As mentioned earlier a faster way to quality improvement, is to follow a concept of Robust Design. Minimizing variation will prevent Societal Loss. Examples of some losses are maintenance costs, pollution costs, etc..

14. Specify a target with minimal variation
Quality Loss Function
-economical and societal penalties due to a purchase of a nonconforming product.
QLF computation:
K = C/T L = K*V ($/unit)
K = constant L = penalty incurred by the customer
C = unit repair cost V = the mean standard deviation
T = tolerance interval 2 2
14)
The next slide will show an Exercise example of how companies compute Quality loss function.
L = economical penalty incurred by the customer as a result of the product quality deviation.
V = mean square deviation from the desired target value.

15. Practice Exercise
Anna’s Bakery had incurred a maintenance cost of $600 on one of their bake ovens that bakes one of their specialty chocolate cakes. What is the QLF for losses incurred as a result of deviation from a target setting where a tolerance of 6 +/- .8mm is required and the mean squared deviation from the target is (1/6)? 2

16. Practice Exercise Solution K=C/T = $600/.8 = 937.5
L=K*V = $937*(1/6) = $26.04/unit 2 2
16)
The QLF or the loss caused by product quality deviation is $26.04 per unit. Once the QLF is determined and compared to other costs, managers can set new specifications to improve product design. 2 2

17. Why use Taguichi’s Quality Loss Function?
1) To find out how much loss is brought to Society due to a purchase of a nonconforming product.
2) To implement a product design improvement.
17)
This is a brainstorming exercise to recall some major aspects of a Quality Loss Function. One of the major reasons why we companies use Quality Loss Function is to calculate the costs associated with producing a nonconforming product. After computing these costs, managers establish priorities for implementing a product design improvement.

18. How can we use Taguchi’s Quality Loss Function in real life?
Let’s assume that you are an Operations Manager at a company that produces custom made doors and door frames. During the winter, due to cold weather, doors tend to shrink which lets in cold air through the cracks between the door and the door frame. During the summer doors tend to expand beyond it’s normal size due to hot weather, which makes to door hard to open because it rubs against the door frame. Your job is to produce a door, where dimensions (length and width of the door) are set to a specific target level. In other words in the Winter the door cannot let any cold air in the house and it should open properly in the Summer.
18)
This is a real world example of how we can employ Taguchi’s Quality Loss Function.

19. How can we use Taguchi’s Quality Loss Function in real life?
19)
Above picture shows the same kind of a door under different weather conditions. The way to set a target at a specific level, we must first calculate the dimensions of the door under cold conditions and then during the hot conditions (compared to conditions during the winter and the summer). We then take the most cold temp. and add it to the most hot temp.. We then take the answer and divide it by two to get the average temp. We then place the door under the average temp. to find our set dimensions. These dimensions should be the best solution to a robust design.
What is the other way to this solution?
We could consider adding chemicals to the door to prevent it’s deviation of dimensions during different seasons.

20. Success Stories
AT&T Bell Laboratories (Computer Response-Time Optimization).
Chrysler Motors Engineering (Sheet-Molded Compound Process Improvement)
-finished products improved from 77% to 96%.
-scrap was reduced from 16% to 1.7%.
20)
Chrysler Motors Engineering (Sheet-Molded Compound Process Improvement). Specifications for this project were to identify controllable and significant material and process variables. Once variables the effect of Sheet-Molded Compound formulation. First-time-through capability of the finished product improved from 77% to 96%. Supplier scrap was reduced from 16% to 1.7%.

21. Summary Japanese thoughts and traditions influenced Taguchi's methods.
Taguchi Methods is a system of cost-driven quality engineering.
Emphasizes the effective application of engineering strategies.
21)
Dr. Genichi Taguchi is respected world wide for his famous concept called Taguchi Methods. These methods are defined as “a system of cost-driven quality engineering that emphasizes the effective application of engineering strategies.”

22. Summary
Companies design and produce low-cost, highly reliable quality products and processes.
Cuts research, development, and delivery time.
Allows engineers to develop flexible technology for the design and production.
22)
Taguchi Methods allow a company to rapidly and accurately acquire technical information to design and produce low-cost, highly reliable (beyond expected limit) products and processes. Its most advanced applications allow engineers to develop flexible technology for the design and production of families of high quality products, greatly reducing research, development, and delivery time.

23. Summary Quality Loss Function supports Dr. Taguchi’s method.
Determine and compare different costs.
Specify changes to implement a product design improvement.
23)
After examining the second graph(Slide 13) showing the Taguchi Loss Function, it is clear that characteristics of a product or processes should not deviate from the set target, causing some kind of a Societal Loss. A faster way to improve the quality of a product is to use QLF to calculate the losses caused by the deviation, and then specify changes to implement a product design improvement.

24. Bibliography
1) Wysk, R. A., Niebel, B. W., Cohen, P. H., and Simpson, T. W.. Manufacturing Processes: Integrated Product and Process Design, McGraw Hill, New York, 2000.
2) Foster, S. T. . Managing Quality: An Integrated Approach. Upper Saddle River, New Jersey , 2001.
3) Chaplin, E., and Terninko, J.. Customer Driven Healthcare: QFD for Process Improvement and Cost Reduction. Milwaukee, Wisconsin, 2000.