405 – TOTAL QUALITY MANAGEMENT

MINI – PROJECT REPORT ON

“TAGUCHI METHOD”

Submitted By

SUDESHNA DASH
(Registered No. 121824601029)

In Partial Fulfilment of Requirement for the Award of the Marks towards

MINI - PROJECT as part of 405 TOTAL QUALITY MANAGEMENT Course
in Master of Business Administration (IB)

Under the Guidance of

Dr.CH. VENKATAIAH
Professor (Operations, Quality & Project Management)

GITAM School of International Business

GITAM (Deemed to be University)
Visakhapatnam-530045

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Executive Summary

Every company wants to give a competitive edge on its rivals by providing differentiation in
its services and product but very few get success in this. Many research scholars have come
up with different theories like Taguchi Method for optimisation. A successful company is that
which is able to fulfil its goals in limited resources along with the satisfaction of the customer
needs. The Taguchi method is an alternative method to review loss due to poor quality.
It's also known as robust design, and seeks to minimize the sensitivity to noise for any
product and/or process.
The conventional loss function states that products may be accepted if they are within
statistical tolerance limits. Taguchi's loss function states that there is a loss unless the product
exactly adheres to the target.
The product then, must be designed in such a way that the control factors settings are optimal
and minimize sensitivity to noise.
The main advantages of robust design are in design transferability and in less
experiments conducted.
Let me explain with the example of a gear hobbing process.
A gear hobbing machine can produce gears of different root diameters. Now although they're
initially accepted by the customer due to falling within the accepted tolerances, the customer
usually returns them within a year due to wear and tear. This entire exchange is considered
a loss to society by Taguchi. So now, the company must figure out a way to improve the
quality of the root diameter so that it is more often on target. Taguchi's method is important
when companies seek to cross the six sigma box of quality. It's an ideology that looks at the
big picture, and one that looks into the future.

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S.No Content Page

No.
1 Executive summary 2

2 Taguchi Method Of Quality Control 4

3 History Of Taguchi Method 5-7
4 How Taguchi Method To Solve Optimization Problems 7-8
5 Steps Involved In Taguchi Method 9
6 Adaptors Of Taguchi Method 10
7 Impact Of Taguchi Method and how it affected the 10-11

companies
8 Application Of Taguchi Method In Health Care 11-13
9 Conclusions 14
10 Annexure 15
11 Bibiliography 16

Taguchi Method of Quality Control

The Taguchi method of quality control is an approach to engineering that emphasizes the
roles of research and development (R&D), product design and development in reducing the
occurrence of defects and failures in manufactured goods. This method, developed by
Japanese engineer and statistician Genichi Taguchi, considers design to be more important
than the manufacturing process in quality control, aiming to eliminate variances in production
before they can occur.

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The Taguchi method gauges quality as a calculation of loss to society associated with a
product. In particular, loss in a product is defined by variations and deviations in its function
as well as detrimental side effects that result from the product.

Loss from variation in function is a comparison of how much each unit of the product differs
in the way it operates. The greater that variance, the more significant the loss in function and
quality. This could be represented as a monetary figure denoting how usage has been
impacted by defects in the product.

For instance, if the product is a precision drill that must consistently drill holes of an exact
size in all materials it is used on, part of its quality is determined by how much the units of
the product differ from those standards. With the Taguchi method of quality control, the focus
is to use research and design to ensure that every unit of the product will closely match those
design specifications and perform exactly as designed. In engineering, the Taguchi method of
quality control focuses on design and development to create efficient, reliable products.
Companies such as Toyota, Ford, Boeing, and Xerox have adopted this method.

Special Considerations:

Loss from detrimental side effects on society speaks to whether or not the design of the
product could inherently lead to an adverse impact. For example, if operating the precision
drill could cause injury to the operator because of how it is designed, there is a loss of quality
in the product.Under the Taguchi method, work done during the design stage of creation
would aim to minimize the possibility that the drill would be crafted in a way that its use
could cause injuries to the operator. From a higher perspective, the Taguchi method would
also strive to reduce the cost to society to use the product, such as designing goods to be
more efficient in their operation rather than generate waste. For instance, the drill could be
designed to minimize the need for regular maintenance.

History of the Taguchi Method of Quality Control

Genichi Taguchi, Japanese engineer and statistician began formulating the Taguchi method
while developing a telephone-switching system for Electrical Communication Laboratory, a
Japanese company, in the 1950s. Using statistics, he aimed to improve the quality of
manufactured goods. By the 1980s, Taguchi's ideas began gaining prominence in the Western
world, leading him to become well-known in the United States, having already enjoyed
success in his native Japan. Big-name global companies such as Toyota Motor Corp. (TM),

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Ford Motor Co. (F), Boeing Co. (BA) and Xerox Holdings Corp. (XRX) have adopted his
methods.

These ideas arise from development work undertaken by Dr Genichi Taguchi whilst working
at the Japanese telecommunications company NTT in the 1950s and 1960s. He attempted to
use experimental techniques to achieve both high quality and low-cost design solutions.

He suggested that the design process should be seen as three stages:

 systems design;

 parameter design; and

 Tolerance design.

Systems design identifies the basic elements of the design, which will produce the desired
output, such as the best combination of processes and materials.

Parameter design determines the most appropriate, optimizing set of parameters covering
these design elements by identifying the settings of each parameter which will minimize
variation from the target performance of the product.

Tolerance design finally identifies the components of the design which are sensitive in
affecting the quality of the product and establishes tolerance limits which will give the
required level of variation in the design.

Taguchi methodology emphasises the importance of the middle (parameter design) stage in
the total design process; a stage which is often neglected in industrial design practice. The
methodology involves the identification of those parameters which are under the control of
the designer, and then the establishment of a series of experiments to establish that subset of
those parameters which has the greatest influence on the performance and variation of the

design. The designer thus is able to identify the components of a design which most influence
the desired outcome of the design process.

The second related aspect of the Taguchi methodology - the Taguchi loss function or quality
loss function maintains that there is an increasing loss both for producers and for society at
large, which is a function of the deviation or variability from the ideal or target value of any
design parameter. The greater the deviation from target, the greater is the loss. The concept of

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loss being dependent on variation is well established in design theory, and at a systems level
is related to the benefits and costs associated with dependability.

Variability inevitably means waste of some kind but operations managers also realise that it is
impossible to have zero variability. The common response has been to set not only a target
level for performance but also a range of tolerance about that target which represents
acceptable performance. Thus if performance falls anywhere within the range, it is regarded
as acceptable, while if it falls outside that range it is not acceptable.

The Taguchi methodology suggests that instead of this implied step function of acceptability,
a more realistic function is used based on the square of the deviation from the ideal target, i.e.
that customers/users get significantly more dissatisfied as performance varies from ideal.

This function, the quality loss function, is given by the expression:

L = k (x - a )2

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where

, L =
the
loss to
societ
y of a
unit of
output
at
value
x
a = the
ideal
state
target
value,
where
at a, L
= 0
k = a
consta
nt

A common criticism of the Taguchi loss function is that while the form of the loss function
may be regarded in most cases as being more realistic than a step function, the practicalities
of determining the constant k with any degree of accuracy are formidable. Quoted successful
applications of the Taguchi methodology are frequently associated with relatively limited
aspects of design, for example single parts, rather than very complex products or services.
Some designers and academics also argue that the results of Taguchi methodology may not
always provide better design solutions than obtained by conventional means.

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However, the critics often seem to miss the point that Taguchi methods are not just a
statistical application of design of experiments; the methods include the integration of
statistical design of experiments into a wider and more powerful engineering process. The
true power of the methodology comes from its simplicity of implementation.

The methods are often applied by technicians on the Japanese manufacturing floor to improve
their product and their processes. The goal is not simply to optimise an arbitrary objective
function, which is how Westerners often regard them, but rather to reduce the sensitivity of
engineering designs to uncontrollable factors or noise. The objective function used is the
signal to noise ratio which is maximized. This moves design targets toward the middle of the
design space so that external variation effects behaviour as little as possible. This permits
large reductions in both part and assembly tolerances which are major drivers of
manufacturing cost.

How Taguchi Method Treats Optimization Problems?

[A] STATIC PROBLEMS:

Generally, a process to be optimized has several control factors which directly decide the
target or desired value of the output. The optimization then involves determining the best
control factor levels so that the output is at the the target value. Such a problem is called as a
"STATIC PROBLEM".

This is best explained using a P-Diagram which is shown below ("P" stands for Process or
Product). Noise is shown to be present in the process but should have no effect on the output!
This is the primary aim of the Taguchi experiments - to minimize variations in output even
though noise is present in the process. The process is then said to have become ROBUST. It
can be explained with a diagram.

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[B] DYNAMIC PROBLEMS:

If the product to be optimized has a signal input that directly decides the output, the
optimization involves determining the best control factor levels so that the "input signal /
output" ratio is closest to the desired relationship. Such a problem is called as a "DYNAMIC
PROBLEM".

This is best explained by a P-Diagram which is shown below. Again, the primary aim of the
Taguchi experiments - to minimize variations in output even though noise is present in the
process- is achieved by getting improved linearity in the input/output relationship. It can be
explained with the following diagram:

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8-STEPS IN TAGUCHI METHODOLOGY

Taguchi method is a scientifically disciplined mechanism for evaluating and implementing

improvements in products, processes, materials, equipment, and facilities. These
improvements are aimed at improving the desired characteristics and simultaneously reducing
the number of defects by studying the key variables controlling the process and optimizing
the procedures or design to yield the best results.

The method is applicable over a wide range of engineering fields that include processes that
manufacture raw materials, sub systems, products for professional and consumer markets. In
fact, the method can be applied to any process be it engineering fabrication, computer-aided-
design, banking and service sectors etc. Taguchi method is useful for 'tuning' a given process
for 'best' results.

Taguchi proposed a standard 8-step procedure for applying his method for optimizing any
process. Following are the steps involved:

Step 1: Identify the main functions, side effects and failure mode.

Step 2: Identify the noise factors, Testing conditions and quality characteristics.

Step 3: Identify the objective function to be optimized.

Step 4: Identify the control factors and their levels.

Step5: Select the orthogonal array matrix experiment.

Step 6: Conduct the matrix experiment.

Step 7: Analyse the data, predict the optimum levels and performance.

Step 8: Perform the verification experiment and plan the future action.

Adaptors Of Taguchi Methods

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With the advancement of quality engineering as a technology to simultaneously reduce costs
and improve quality was developed by the noted Japanese specialist Genichi Taguchi. By the
1980s, Taguchi’s ideas began gaining prominence in the western world, leading him to
become well – known, having already enjoyed success in his native Japan.
The first introduction of Taguchi Method was in Nippondenso which completes over 2600
applications per year primarily to optimize product design.
A good explanation of Taguchi Methods and QFD was written by Bill Eureka, reliability
manager for General Motors, CPC Group. Ford and Chrysler have written similar definitions
which are being fostered by many supplier companies. After the introduction of Taguchi
Methods, many companies in U.S have seen a significant change in quality thinking and in
engineering technology.
Not only that, during this research, the president of Toyoda Gosei made some interesting
remarks regarding change within a company. Mr. Nemoto told that managers at Toyoda Gosei
were promoted on the basis of change; how they were able to impact change in their job to
help achieve company’s objectives. He contrasted this with traditional U.S manager who are
evaluated on how well they perform within prescribed guidelines, specific areas of
responsibilities and fixed budget levels. In fact, U.S. managers who go beyond their job to
create change are considered mavericks and they rarely advance to higher levels in the
company. U.S. executives are uncomfortable with managers who promote change.

Impact Of Taguchi Methods and how it affected Companies

Change 1# - Definition Of Quality
One of the most important changes in U.S companies resulting from Taguchi Method
Applications is the redefinition of quality and the meaning of quality improvement. Since the
central theme of parameter design is to reduce cost bu reducing variability, the definition of
quality can no longer be “conformance to specifications” limits. The meaning of quality
improvement is changed from problem solving to reducing variability around target values.

Change 2# - Financial Control System

The Quality Loss Function (QLF) for which Dr Taguchi received a Deming Literature Prize
has the potential for great change in the financial system of U.S companies. The QLF creates
an economic perspective which tends to redefine the traditional cost control guidelines under
which most U.S companies operate. Every major company has a financial system with
payback ratios for capital expenditure and product design improvement.

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Change 3# - Engineering target values
In order for Taguchi Methods of parameters design to be effective, the product planning
function and engineering activities must establish target values to meet each characteristic of
the voice of the customer. Spec limits or tolerances which theoretically represent the voice of
the engineer are no longer acceptable. This requires a change in marketing intelligence as
well as engineering knowledge to develop target values which represent the best level or
function, fit or appearance. When target values are established, the engineering function must
be directed to optimize product designs early in the product development stage, where
conflicting requirements exist.

Change 4# - Manufacturing Process Improvement

Taguchi Method applications result in significant changes to the manufacturing system.
Traditional in U.S companies holds that parts within spec are OK and as long as parts are
within spec, nothing further is required. Several changes that we see developing in U.S
companies which apply parameter design.

Change 5# - Horizontal Technical Interaction

U.S companies are generally strong in vertical deployment and weak in horizontal
interaction. Taguchi Methods training and case study development, which requires cross-
functional team interaction, creates great change in how a company operates to improve a
quality.

Application Of Taguchi Method In Health Care

Loss functions have been studied for several decades and have been widely used for various
purposes such as business decision making, quality assurance and reliability tests. Loss
functions have traditionally taken many forms such as squared error, absolute error, weighted
and binary loss. On the other hand, Taguchi used a quadratic loss function to motivate and
illustrate losses to society associated with departures from target in industrial applications.
For instance, the performance of a diagnostic test deviates from its ideal as the
misclassification rate of patients increase. In quality assurance settings, loss functions are
used to reflect the economic loss associated with variations and deviations from the ideal
value of a process characteristic. An example to this can be the length of patient’s stay in
hospital due to misdiagnosis or waiting list.

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Fishbone Diagram showing the parameters to improve the length of stay in an emergency
room

Taguchi’s diagnostic loss function satisfies the criteria that the loss must be non – negative, is
zero worth at the target value is and is monotonically increasing as the process drifts from
either side of target. It attains quantifiable minimum at the target while attaining the maxima
at both sides of the parabola where there are the highest false positive and false negative
rates:
False Positive Cost(FPC) – False Negative Cost(FNC) = Relative Cost = 1

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Cost of False Positives(CFP) = FPC * FPC
Cost of False Negative (CFN) = FNF*FNC
Minimum total cost for each prevalence and relative misclassification cost are calculated by
using the following equation:
Total Cost(TC) = CFP + CFN
Thus, any deviation sourced from misclassification increase the loss to society.
Loss – To- Society = 1- (CFP) + (CFN)

The signal-to-noise ratio (S/N) is the operational way of incorporating Taguchi’s quality loss
function into experimentation. The S/N measures quality in terms of performance; whereas
the quality loss function measures it in terms of cost. This connection between quadratic loss
and Taguchi’s S/N leads to a general principle for choosing performance measures in
parameter design.

Loss – to society = 0

SS/N = S/N

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Conclusion
The Taguchi method shows greatest potential in medical applications, which have
technology-oriented systems that depend on multiple parameters such as mixing process for
drugs or casts, administering analgesics, time periods for evaluation of certain procedural
outcomes and patient waiting conditions as well as evidence based medicine and medical
expert systems. It must be realized that the nature of applications in medical fields and those
applications that have been proven to be successful in non-medical spheres are fueled by
different requirements. In healthcare, the needs and wants of patients are different since
applications are patient-based and there is no product, but rather a service. The focus of one
being highly commercial in its efficiency products, while the focus of the other aims at an
overall improvement of efficiency in a non-commercial sector whose success can only be
quantified in personal terms such as comfort levels, pain levels and waiting times.
These applications of Taguchi methods provide convincing evidence of its successful
applications (in manufacturing industry) and its potential application (in healthcare industry)
and these proven success of these latter applications is awaited to endorse Taguchi as a
relevant method to applications of great diversity. Therefore, Taguchi’s loss function can help
to improve quality management and measurement of outcomes in healthcare in terms of
costs. There are various problems with measuring outcomes in terms of cost and quality in
the healthcare industry, however, because the results are sometimes not comparable, neither
severity nor risk adjusted and can easily be manipulated. There are also problems with data
collecting.

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 Annexure

ANNEXURE – 1: EXECUTIVE SUMMARY

ANNEXURE – 2: TAGUCHI METHOD OF QUALITY CONTROL
ANNEXURE – 3: HISTORY OF THE TAGUCHI METHOD OF QUALITY OF CONTROL
ANNEXURE – 4: HOW TAGUCHI METHOD TREATS OPTIMIZATION PROBLEMS?
ANNEXURE – 5:8 STEPS IN TAGUCHI METHDOLOGY
ANNEXURE – 6: ADAPTORS OF TAGUCHI METHOD
ANNEXURE – 7: IMPACT OF TAGUCHI METHOD AND HOW IT AFFECTED
COMPANIES
ANNEXURE – 8: APPLICATIONS OF TAGUCHI METHOD IN HEALTH CARE
ANNEXURE – 9: CONCLUSIONS

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 Bibliography

https://www.investopedia.com/terms/t/taguchi-method-of-quality-control.asp
https://www.ims-productivity.com/page.cfm/content/Taguchi-Methods/
https://en.wikipedia.org/wiki/Taguchi_methods
https://www.ee.iitb.ac.in/~apte/CV_PRA_TAGUCHI_INTRO.htm
https://studylib.net/doc/8575225/iv.-steps-involve-in-taguchi-method
http://irjes.com/Papers/vol1-issue3/Version%201/C131319.pdf
http://www.ame.org/sites/default/files/target_articles/87Q2A4.pdf

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