Total Quality Management –
Class Activity
Prepared by: Bhakti Joshi
Date: January 16, 2013
Class Activity
• 10 groups – 3 students
• Production worker
• Inspector 1 stands behind the worker
• Inspector 2 manages the specification criteria
• Recorder reporting measurements
Setup
• Quality target = 10
• Worker shoots 10 times (production of 10
units)
• Rs 10 is the cost if shot outside the spec
Recording data
Wor 1 2 3 4 5 6 7 8 9 10 Mea Devi
ker n atio
n
A
B
Taguchi Loss Function
Worker 1 2 3 4 5 6 7 8 9 10 Mean
Loss = (Each Shot – Mean Shot)2 C
C = Cost to correct /tolerance2
Cost to correct = Rs 10 *number of times one defected
Tolerance = each shot cannot fall more than two times outside the
specs or outside the table
Calculate Loss??
Questions
• What are the sources of variability?
• How could variability be reduced
• Are the specifications and processes capable?
• Who is more accurate
• Who is most precise
• Who generated the minimum loss using the
specifications?
• Who scored the best?
Taguchi Methods: Example
• Company C received an average of 10
complaints per month last year. In November
they received 15 complaints (y). Management
sets an acceptable level at 2 (tolerance).
• It costs the company Rs.500 directly per
complaint to correct the problems. They also
determined the cost in lost sales to be Rs.
1000. Thus, the total cost to correct
complaints equals Rs. 1500
Characteristics of the Company
• Customer satisfaction
– Quality loss as loss to society quantified through
“Quality Loss Function”
– Variations from optimal measure results in a loss
• Product Design
– Equipment: No breakdowns
– Specific jobs defined
– Policies and Procedures – know-how
Formulae
• L(y) = k(y-m)2
L(y) = Loss
k = constant = cost to correct
tolerance2
y = reported value
m = mean value (average)
Calculation
k = Rs1500/22 = Rs375.0
L(y) = 375.0 (15-10)2
= 375.0 (5)2
= 375.0 (25)
= Rs. 9375.0 is loss for the month of
November
Characteristics of Taguchi Methods
• Broadly, purpose of Taguchi methods is quality
improvement and control
• An ideal situation should be known in terms of
costs, sales, demand or supply
• But mostly are used during development of
product/service designs and supporting
variations
• Aim is to determine errors by identifying
variations (or quality loss)
• Variations between ideal and existing must be
reduced
Concept of Quality Loss
• Use of statistical analysis for quantification
• Used as a quality control tool to quantify
quality during experiments and trial-errors
especially in R&D
• Aims to reduce product variability with a
system for developing specifications and
designing them into a product or process.
Criticism
• Constant??
• Ideal??
• Mostly considered in designing aspect… But is
it good??
Learning curve
• Did you try different ways of flipping coins?
• Which ways worked or didn’t work?
• What would have been ideal?
… is based on the principle that all jobs are
performed more efficiently as greater
experience is gained in respective jobs – A book by
Gopalakrishnan titled, “Purchasing and Materials Management”
Learning Curve: Meaning
• Originally developed by T.P. Wright in 1936
• Graphical representation of changing rate of learning
• Rate of learning is measured on people, tools and
processes but mostly people
• Related to time or cost or performance
• Affects individuals and the organisation
Learning Curve: Measurement
Y = aXb
Log Y = log a + b log X
Y = the cumulative average time (or cost) per unit
X = the cumulative number of units produced
a = time (or cost) required to produce the first unit
b = slope of the function (log of learning rate/log of
2)
Learning Curve
Interpretation of the curve
• 80% or 0.8 is the learning factor (‘b’)
• If the learning is 80%, then to produce the 2nd
unit of the product will take only 80% of the
time of the first unit and the 3rd unit will take
80% of the time of the second unit and so
on….
Example 1: Unit Cost of Hours worked
Learning Factor unit value
No. of Units
75% 80% 85% 90%
1 100.0 100.0 100.0 100.0
5 51.3 59.6 68.6 78.3
10 38.5 47.7 58.3 70.3
15 32.5 41.8 52.0 66.3
20 28.8 38.2 49.5 63.4
25 26.3 35.5 35.5 61.3
30 24.4 33.5 33.5 59.6
35 22.9 31.8 31.8 58.3
40 21.6 30.5 30.5 57.1
Example 2
Number of Labour Cumulative
Cumulative
Lots Units in the Hours for Units in the
Labour hours
Lot each Lot lot
1 2 72 =2 =72
2 4 111 =2+4=6 =72+111=183
Y = aXb
Interpretation of Formula
• When ‘b’ reaches unity, implies learning is
slower
• ‘b’ is generally higher for labour-intensive
work and lower for capital-intensive
• For most labour-intensive manufacturing ‘b’
ranges from 70% – 90%
• Could be considered for bargaining
contractual wages and costs
Learning Curve: Application and Effects
• Labour efficiency: Learning short-cuts, more dexterous,
becoming confident, less errors
• Standardisation, specialisation and methods
improvements: Standardised methods leading to
efficiency
• Technology-driven learning
• Better use of equipment
• Changes in resource mix
• Product redesign
• Network building and use-cost reductions
• Shared experience effects
Email: bhaktij@gmail.com
Website: www.headscratchingnotes.net
