Taguchi Quality Loss Function

The Goalpost (Traditional) View of Quality

Traditionally, companies measure quality by the number of defects or the defect rate. In this system, defects are identified through inspections of the materials and products. Upper and lower quality limits are established. Everything that does not fall within the limits is considered a defect. This view is referred too as the goalpost view because it can be conformed to the use of goalposts in football. If the extra point goes between the goal posts it is considered a success. It does not matter whether or not it is in the center or close to the sides. However, if the ball goes wide, left or right, it is unsuccessful. Exhibit 1 shows this view.

The Quality Loss Function (QLF)

The quality loss function is based on the work of electrical engineer, Genichi Taguchi. This view disagrees with the traditional (goalpost) view. The quality loss function recognizes that products falling between specific limits are not all equal.

Taguchi defines quality as the loss imparted to society from the time a product is shipped. Societal losses include

failure to meet customer requirements failure to meet ideal performance harmful side effects

1. Nominal is better approach

In this approach, the closer to the target value, the better. It does not matter whether the deviation is above or below the target value. Under this approach the deviation is quadratic.

L k y m 2

L = loss in rupees/ dollars y = output value m = target value of output k = constant Example:

Thickness of windshield in a car Refrigerator / air conditioner temperature control

2. Smaller is better approach

The smaller is better approach is when a company desires smaller values. As the value gets larger, the loss incurred grows.

L k y2
L = loss in rupees/ dollars y = output value m = target value of output k = constant Example: Minimization of heat loss in a heat exchanger Radiation leakage from a microwave appliance Pollution from an automobile

3. Larger is better approach

Larger is better occurs when a company desires higher values of a characteristic. Under this approach, the larger the characteristic, the smaller the quality loss function.

k 2 y0

L = loss in rupees/ dollars y0 = minimum consumer tolerated output value k = constant Example: Maximizing the product yield from a process Strength of adhesives Welding strength

Example

If the specifications are 10 + 3 for a particular quantity characteristic and the average repair cost is Rs 1000, determine the loss function. Determine the loss function at y = 12. k = A/2 = 1000/32 = 25.6 L = 111.11(y-10)2 At y = 12 L = 111.11(12-10)2 = 444.44

Uses of QLF

1. Reduce Costs There are three ways that managers can use QLF to reduce costs.
1. Move the average of the actual distribution closer to the target value. 2. Reduce variability. 3. Do a combination of both.

2. Setting Specific Limits The data from the quality loss function can be used to determine where limits should be set to help minimize losses.