Taguchi Quality Loss Function

Taguchi Quality Loss Function

Background of the Taguchi Method

• Introduced by Dr. Genichi Taguchi (1980)

• Unique aspects of the Taguchi method

– The Taguchi definition of quality
– The Taguchi Quality Loss Function (QLF)
– The concept of Robust Design
• Combines cost, target and variation

• Specification is of secondary importance
• Noise factors – uncontrollable variables that can cause
significant variability in the process or the product
Quality Definition
Quality – loss imparted to the society from the time the product is
shipped
Societal loss
• Failure to meet customers requirements
• Failure to meet ideal performances
• Harmful side effects
• Losses due to production (raw material, energy, labor) of
unusable products or toxic by-products
Sony USA & JAPAN
* Customers preferred the televisions sets produced by Sony-Japan over

those produced by Sony-USA.
* The color density of the televisions manufactured by Sony-USA

were uniformly distributed and fell within the tolerance limits, m ± 5
• The televisions from Sony-Japan followed a normal distribution, more

televisions were on target but about 0.3% fell outside of the tolerance
limits.
• The differences in customer perceptions of quality resulted from Sony-

USA paying attention only to meeting the tolerances whereas in Sony-
Japan, the focus was on meeting the target and minimizing the variance
around that target.
Sony USA & JAPAN
Taguchi Loss Function – Nominal-the-best
• Taguchi’s loss function explains the economic value of reducing

variation in manufacturing.
L(y) = k(y – T)2
where:
L(y) is the cost involved as quality deviates from the target, T;
y is the performance characteristic;
k is a constant that translates the deviation into Rs. (quality loss
coefficient)
Taguchi Loss Function
Average Loss
• Loss function must reflect the variation of many pieces rather

than just one piece
• L1 = k[σ2 + (y1 - T)2]
• σ is the population standard deviation

Taguchi Robust Design
• A process has “several” quality characteristics
– Desirable Qualities
Larger-the-Better (strength, mileage etc)
Nominal-the-Best (specified dimensions, uniformity)
– Undesirable properties
Smaller-the-better (defects, resources - material/time, cost)
• Determine the best settings such that
– Desirable qualities are enhanced

– Undesirable properties are minimized/eliminated
 Process becomes ROBUST i.e. insensitive to NoIsE
Taguchi Design of Experiments
• The Taguchi method is a structured approach for

determining the ”best” combination of inputs to produce
a product or service
• DOE is an important tool for designing processes and

products
– A method for quantitatively identifying the right inputs and
parameter levels for making a high quality product or service
10
Robust Design
• NOISE - events that cause the design performance to

deviate from its target values
• Taguchi divide NOISE into three categories
– External Noise: variations in the environment where the product
is used
– Deterioration Noise: wear and tear inside a specific unit
– Internal Noise: deviation from target values
NOISE
External Noise Consumer’s usage conditions

Temperature change
Vibration
Humidity
Deterioration Deterioration of parts

Noise Deterioration of material
Oxidation (rust)
Unit to Unit Piece to piece variation

Internal Noise
Robust Design
• A three step method for achieving robust design

(Taguchi)
1. Concept design
2. Parameter design
3. Tolerance design
• The focus of Taguchi is on Parameter design
Robust Design
1. Concept Design
– The process of examining competing technologies for
producing a product - Includes choices of technology
and process design
– A prototype design that can be produced and meets
customers’ needs under ideal conditions without
disturbances
Robust Design
2. Parameter Design
– The selection of control factors (parameters) and
their “optimal” levels
 The objective is to make the design Robust!
– Control factors are those process variables
management can influence.
 Ex. the procedures used and the type and amount of
training
 Often a complex (non-linear) relationship between the
control factors and product/design performance
– The ”optimal” parameter levels can be determined
through experimentation 15
Robust Design
3. Tolerance Design
– Development of specification limits
 Necessary because there will always be some variation in
the production process
 Taguchi fiercely advocates aiming for the target value not
just settle for “inside the specification limits”!
– Occurs after the parameter design
– Often results in increased production costs
 More expensive input material might have to be used to
meet specifications
16
Suppose that the specification on a part is 0.500 ± 0.020 cm. A
detailed analysis of product returns and repairs has discovered that
many failures occur when the actual dimension is near the extreme of
the tolerance range (that is, when the dimensions are approximately
0.48 or 0.52) and costs $50 for repair.
the deviation from the target, y – T , is 0.02 and L(y) = $50.

Substituting these values, we have:
50 = k(0.02)2
or
k = 50/0.0004 = 125,000
Therefore, the loss function for a single part is L(y) = 125000(y – T)2
when the deviation is 0.10, average loss per unit is:
L(0.10) = 125,000(0.10)2 = $12.50 per part

problem (continued)
Knowing the Taguchi loss function helps designers to determine

appropriate tolerances economically. For example, suppose that a
simple adjustment can be made at the factory for only $2 to get this
dimension very close to the target.
If we set L(x) = $2 and solve for x – T, we get:

2 = 125000(x – T)2
x – T = 0.004
Therefore, if the dimension is more than 0.004 away from the target, it
is more economical to adjust it at the factory and the specifications
should be set as 0.500 ± 0.004.

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Taguchi Quality Loss Function

Background of the Taguchi Method

• Introduced by Dr. Genichi Taguchi (1980)

• Unique aspects of the Taguchi method

• Combines cost, target and variation

* Customers preferred the televisions sets produced by Sony-Japan over

* The color density of the televisions manufactured by Sony-USA

• The televisions from Sony-Japan followed a normal distribution, more

• The differences in customer perceptions of quality resulted from Sony-

• Taguchi’s loss function explains the economic value of reducing

L(y) = k(y – T)2

• Loss function must reflect the variation of many pieces rather

• L1 = k[σ2 + (y1 - T)2]

• σ is the population standard deviation

• A process has “several” quality characteristics

• Determine the best settings such that

– Desirable qualities are enhanced

• The Taguchi method is a structured approach for

• DOE is an important tool for designing processes and

• NOISE - events that cause the design performance to

External Noise Consumer’s usage conditions

Deterioration Deterioration of parts

Unit to Unit Piece to piece variation

• A three step method for achieving robust design

the deviation from the target, y – T , is 0.02 and L(y) = $50.

when the deviation is 0.10, average loss per unit is:

L(0.10) = 125,000(0.10)2 = $12.50 per part

Knowing the Taguchi loss function helps designers to determine

If we set L(x) = $2 and solve for x – T, we get:

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