Dr. Genichi Taguchi, a Japanese quality consultant and engineer, came to the United States in the 1980s concentrating on loss. In conjunction with this view of quality, he developed the idea of a loss function. If we think of quality in a competitive way, we should view that there is a target value (i.e., nominal-is-best, larger-is-best, or smaller-is-best). When measuring an end-product-parameter, any departure away from the designer’s intended target creates a loss to society, or a loss to the producer. Either way, ultimately the customer ends up paying for it.
Use: Consider the example of making gears. The design engineer had in mind an ideal dimension for each of the teeth (i.e., the thickness of each tooth). If the manufacturing operation produces thicker teeth than ideal, the loss will be realized by society. This is because the teeth that would mesh with other teeth on a pairing gear would wear out faster than they would have had the teeth been made to the ideal dimension. In this case, the same would hold true for teeth that are produced thinner than ideal. The teeth would wear out faster.
In this case, the loss – either way – would be to society. If however, the same manufacturer produces sheet-metal that is a tad bit thicker than necessary – thicker than the design engineer’s target value, the loss will be realized by the producer. You might ask – why the producer? In actuality, the loss might be felt by the supplier of the sheet-metal because they are consuming more metal than is necessary. That cost would be passed on to the customer, which in this case is the sheet-metal shaper. If the sheet-metal is too thin, the loss would be to SOCIETY because in some applications the sheet-metal fatigues sooner than it should and may need to be replaced sooner. Note that the actual loss can be calculated and dollars can be placed on these losses.
