The New Economics The New Economics of Variation: Learning from of Variation: Learning from Genichi Taguchi Genichi Taguchi Presented by Bill Bellows Presented by Bill Bellows Associate Fellow Associate Fellow InThinking Network InThinking Network Aerojet Rocketdyne Aerojet Rocketdyne Email: Email: [email protected]Cell: 818-519-8209 Cell: 818-519-8209 The Boeing Company The Boeing Company October 7, 2013 October 7, 2013
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The New Economics of Variation: Learning from Genichi Taguchi Presented by Bill Bellows Associate Fellow InThinking Network Aerojet Rocketdyne Email: [email protected] Cell: 818-519-8209 The Boeing Company October 7 , 2013. Agenda. Aim Macro System Model Micro System Model - PowerPoint PPT Presentation
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The New EconomicsThe New Economicsof Variation: Learning from of Variation: Learning from Genichi TaguchiGenichi TaguchiPresented by Bill BellowsPresented by Bill Bellows
AimMacro System ModelMicro System ModelTaguchi Methods at Aerojet
RocketdyneFuture State
AgendaAgenda
The aim of this session is to offer insights on how W. Edwards Deming’s “new economics” has integrated the thinking of two pioneers in the field of variation management – Walter Shewhart and Genichi Taguchi. In doing so, this presentation will contrast these systemic views of variation management with those of the prevailing style of management, in both cases offering reflections on the decisions made in quality improvement efforts under guidance from the “old” and “new “ economics.
W. Edwards Deming Genichi TaguchiWalter Shewhart
Macro System ModelMacro System Model
D E F
P
GI H
Process FlowProcess Flow
Handoff Requirements?
D E F
P
GI H
Process FlowProcess Flow
Part Production
Part AStep 1
Step 2Step N
GOOD
Macro System ModelMacro System Model
“Zero defects is another way of saying ‘do it right the first time’”
Quality is defined as conformance to requirements
Source: Let’s Talk Quality, P. Crosby, 1989
PartPart Quality Quality
Part Production
Part AStep 1
Step 2Step N
Part B
Part O
Part P
GOOD
GOOD
GOOD
GOOD
Step 1Step 2Step N
Step 1Step 2Step N
Step 1Step 2Step N
Macro System ModelMacro System Model
Part Production
Part AStep 1
Step 2Step N
Part B
Part O
Part P
AssemblyGOOD
GOOD
GOOD
GOOD
Step 1Step 2Step N
Step 1Step 2Step N
Step 1Step 2Step N
Macro System ModelMacro System Model
Part Production
Sub-Assembly 1
Part AStep 1
Step 2Step N
Part B
Part O
Part P
Assembly
FIT
GOOD
GOOD
GOOD
GOOD
Step 1Step 2Step N
Step 1Step 2Step N
Step 1Step 2Step N
Macro System ModelMacro System Model
Part Production
Sub-Assembly 1
Part AStep 1
Step 2Step N
Part B
Part O
Part P
Sub-Assembly 2
Assembly
FIT
FIT
GOOD
GOOD
GOOD
GOOD
Step 1Step 2Step N
Step 1Step 2Step N
Step 1Step 2Step N
Macro System ModelMacro System Model
Part Production
Sub-Assembly 1
Part AStep 1
Step 2Step N
Part B
Part O
Part P
Sub-Assembly 2
Assembly Final Assembly
FIT
FIT
GOOD
GOOD
GOOD
GOOD
Step 1Step 2Step N
Step 1Step 2Step N
Step 1Step 2Step N
Macro System ModelMacro System Model
Part Production
Sub-Assembly 1
Part AStep 1
Step 2Step N
Part B
Part O
Part P
Sub-Assembly 2
ProductAssembly
Assembly Final Assembly
FIT
FIT
FIT
GOOD
GOOD
GOOD
GOOD
Step 1Step 2Step N
Step 1Step 2Step N
Step 1Step 2Step N
Macro System ModelMacro System Model
Part Production
Sub-Assembly 1
Part AStep 1
Step 2Step N
Part B
Part O
Part P
Sub-Assembly 2
ProductAssembly
Assembly Final Assembly
FIT
FIT
FIT
GOOD
WORKS
GOOD
GOOD
GOOD
Step 1Step 2Step N
Step 1Step 2Step N
Step 1Step 2Step N
Macro System ModelMacro System Model
Quality is defined as conformance to requirements, not as 'goodness' nor 'elegance'.
The system for causing quality is prevention, not appraisal.
The performance standard must be Zero Defects, not 'that's close enough'.
The measurement of quality is the Price of Non-conformance, not indices.
The “Absolutes” of The “Absolutes” of PartPart QualityQuality
Source: Quality is Free, Philip Crosby, 1979
Quality Focus: Conformance to Requirements
Goal: Defect-Free Parts Activities: Assess Non-
Conformances, Scrap and Rework
Mindset: Reactive / Victim Skills: Fire-Fighting and
Problem Solving Impact: No Improvement in
Quality After Zero Defects, Temporary Solutions
Attributes: Physical and Mental Handoffs (separation, blame)
Macro System Model(Part Work)
Micro System ModelMicro System Model
Given a piece of wood that will be cut into 2 pieces....
how many lines will be drawn acrossthe top face before the cut is made ?
Wood ManagementWood Management
target
Wood ManagementWood Management
target
Wood ManagementWood Management
0 A B C diameter
Circle ManagementCircle Management
Which 2 of these 3 circles are closest to having the same diameter?
0 A BC diameter
Decisions DecisionsDecisions Decisions
MIN MAX
Which 2 of these 3 circles are closest to having the same quality?
UpperSpecification
Limit
Lower Specification
Limit
TARGET(desired value of
parameter)
“Loss to Society”
Taguchi’s Quality Loss Taguchi’s Quality Loss FunctionFunction
A BC
Part Production
Sub-Assembly 1
Part AStep 1
Step 2Step N
Part B
Part O
Part P
Sub-Assembly 2
ProductAssembly
Assembly Final Assembly
Step 1Step 2Step N
Step 1Step 2Step N
Step 1Step 2Step N
Degrees of GOOD
Degrees of WORKS
Degrees of FIT
Degrees of FIT
Degrees of FIT
Micro System ModelMicro System Model
MAXMIN
HOLE DIAMETER
MAXMIN
2520
8:00 PM6:00 PM
ARRIVAL TIME
Examples of Variation Examples of Variation ManagementManagement
PAGE COUNT
OUTER DIAMETER
MAXMIN
HOLE DIAMETER
MAXMIN
2520
8:00 PM6:00 PM
ARRIVAL TIME
Examples of Variation Examples of Variation ManagementManagement
PAGE COUNT
OUTER DIAMETER
MAXMIN
HOLE DIAMETER
MAXMIN
2520
8:00 PM6:00 PM
ARRIVAL TIME
Examples of Variation Examples of Variation ManagementManagement
PAGE COUNT
OUTER DIAMETER
MAXMIN
HOLE DIAMETER
MAXMIN
2520
8:00 PM6:00 PM
ARRIVAL TIME
Examples of Variation Examples of Variation ManagementManagement
PAGE COUNT
OUTER DIAMETER
MAXMIN
HOLE DIAMETER
MAXMIN
2520
8:00 PM6:00 PM
ARRIVAL TIME
Examples of Variation Examples of Variation ManagementManagement
PAGE COUNT
OUTER DIAMETER
Taguchi Methods at Taguchi Methods at Aerojet RocketdyneAerojet Rocketdyne
Dr. Taguchi’s first visit to Canoga Park – May 1994. While here he met with 6 application teams, including manufacturing engineers on the Space Shuttle Main Engine.
Taguchi Methods – Taguchi Methods – History in Canoga ParkHistory in Canoga Park
Management briefings provided by American Supplier Institute (ASI) in 1989
"Introductory" training (36-42 hours) by ASI began in 1989
Internal expert hired in 1990 In-house "Introductory" seminars through the
TQM Office began in 1991 800+ graduates to date
Taguchi Methods – Taguchi Methods – History in Canoga ParkHistory in Canoga Park
First visit by Dr. Taguchi in May 1994 Dr. Taguchi reviewed applications with 6 teams
Second visit by Dr. Taguchi in November 1994 Dr. Taguchi reviewed applications with 4 teams Meetings arranged with Dr. Taguchi and executives
to review application strategies for R&D Third visit by Dr. Taguchi in May 1996
Dr. Taguchi and Professor Yuin Wu reviewed RS-68 combustion design activities
Curriculum of “thinking” courses established in 1995 – “A Thinking Roadmap”
Taguchi Methods seminar expanded into 2 40-hour seminars as part of “A Thinking Roadmap”
Thinking transformation efforts focus on a need to “manage variation”, not “reduce variation” “manage costs”, not “reduce costs” “manage resources”, not “reduce resources” “continuous investment”, not “continuous
Background: Consider the following two processes and the specification limits and target provided. What is the motive for selecting process 2 over process 1?
USLLSL TARGET
1
2
Variation ReductionVariation Reduction
Background: Consider the following two processes and the specification limits and target provided.
USLLSL
TARGET
1
2
Variation ManagementVariation Management
Given the following 5 criteria, which is the preferred process – 1 or 2?
1 – Equal purchase prices2 – Equal delivery schedules3 – Zero defects are guarantee from both processes4 - Distributions will never change shape and/or location5 – The “team” selected the “target” value, which is preferred, plus the tolerances
USLLSL
target
1
2
Decisions DecisionsDecisions Decisions
UpperSpecification
Limit
Lower Specification
Limit
target(desired value of
parameter)
“Loss to Society”
(a greater system)
Taguchi’s Quality Loss Taguchi’s Quality Loss FunctionFunction
12
“Quality is the minimum of lossimparted to the Society by a product after its shipment to a customer”
Source: Introduction to Quality Engineering , G. Taguchi, 1983
Relationship QualityRelationship Quality““Mind the Gap”Mind the Gap”
Genichi TaguchiGenichi Taguchi Born in Japan in 1924 Joined Electrical Communication Laboratories in 1949 Received Deming Prize in 1951, 1953, 1960, and 1984 Received Ph.D. (Science) in 1962 Visited U.S. (Princeton and Bell Labs) in 1962 Employed as Professor (Japan) until 1982 Introduced Fuji-Xerox to methodology in 1972, AT&T in
1980, Xerox in 1982, and Ford in 1982 Honored by Emperor of Japan in 1989 Died in Japan in 2012
END VIEW OF OVEN
PROCESS FLOW
APPORTION,
PULVERIZE, AND
MIX MATERIALSMOLD PREFIRE
INSPECT,
PACKAGE, AND
SHIPGLAZEFIRE
BATH ROOM TILE MANUFACTURING, APPLICATION BY INA SEITO, CIRCA 1952
Early Example of Applying Early Example of Applying “Taguchi Methods”“Taguchi Methods”
TILE
SIZE
UPPER LIMIT
LOWER LIMIT
OUTSIDE INSIDETILES TILES
BEFORE STUDY
BEFORE STUDY
END VIEW OF OVEN
Early Example of Applying Early Example of Applying “Taguchi Methods”“Taguchi Methods”
PROBLEM: OUTSIDE TILES OUT OF SPEC (30 % REJECTED)
CAUSE: NON-UNIFORM TEMPERATURE VARIATION WITHIN TILES
SOLUTION OPTIONS:
Early Example of Applying Early Example of Applying “Taguchi Methods”“Taguchi Methods”
PROBLEM: OUTSIDE TILES OUT OF SPEC (30 % REJECTED)
CAUSE: NON-UNIFORM TEMPERATURE VARIATION WITHIN TILES
SOLUTION OPTIONS:
COMMON FEATURE:
Early Example of Applying Early Example of Applying “Taguchi Methods”“Taguchi Methods”
PROBLEM: OUTSIDE TILES OUT OF SPEC (30 % REJECTED)
CAUSE: NON-UNIFORM TEMPERATURE VARIATION WITHIN TILES
ATTRIBUTE OF "BEST" SOLUTION:
SOLUTION OPTIONS:
COMMON FEATURE:
Early Example of Applying Early Example of Applying “Taguchi Methods”“Taguchi Methods”
AFTER STUDY
TILE
SIZE
UPPER LIMIT
LOWER LIMIT
AFTER STUDY
OUTSIDE INSIDETILES TILES
BEFORE STUDY
BEFORE STUDY
END VIEW OF OVEN
Early Example of Applying Early Example of Applying “Taguchi Methods”“Taguchi Methods”
PROCESS FACTORS
(EXISTING)
A) CONTENT OF LIME 5 % 1 %
B) FINENESS OF ADDITIVE COARSE FINE
C) CONTENT OF AGALMATOLITE 43 % 53 %
D) KIND OF AGALMATOLITE EXISTING NEW
E) RAW MATERIAL CHARGING QUANTITY 1300 KG 1200 KG
F) CONTENT OF WASTE RETURN 0 % 4 %
G) CONTENT OF FELDSPAR 0 % 5 %
CONTROL FACTORS
LEVELS
1 2
TOTAL (POSSIBLE) COMBINATIONS
OF 7 FACTORS AT 2 LEVELS EACH
Early Example of Applying Early Example of Applying “Taguchi Methods”“Taguchi Methods”
TRIAL
1
2
3
4
5
6
7
8
LIME
5
5
5
5
1
1
1
1
(A)
% FINE-
CSR
CSR
FNR
FNR
CSR
CSR
FNR
FNR
(B)
NESS AGAL.
43
43
53
53
53
53
43
43
%
(C)
AGAL.
TYPE
EXSTG
NEW
EXSTG
NEW
EXSTG
NEW
EXSTG
NEW
(D)
QTY
CHRG
1300
1200
1300
1200
1200
1300
1200
1300
(E)
RTN
WSTE
0
4
4
0
0
4
4
0
(F)
FDSPR
0
5
5
0
5
0
0
5
(G)
1 2 3 4 5 6 7
1
1
1
1
2
1 1 1 1 1 1
1 1 2 2 2 2
2 2 1 1 2 2
2 2 2 2 1 1
1 2 1 2 1 2
2 1 2 2 1 2 1
2 2 1 1 2 2 1
2 2 1 2 1 1 2
A B C D E F G
L (2 )7
8
ORTHOGONAL ARRAY
TILE SIZE
(L/W/T)
Early Example of Applying Early Example of Applying “Taguchi Methods”“Taguchi Methods”
Taguchi Methods – Taguchi Methods – Three Stages of DesignThree Stages of Design
1. Concept Selection (System Design) – define the product or process technology
2. Parameter Design – given levels of input (process or product) variation and average, define the “best” value for each input average (the “target”)
3. Tertiary Design – given levels of input (process or product) variation and a preferred average for each, define the “best” variation level for each input
Stages of DesignStages of Design
Inputs
AB
1. Concept Selection (System Design) – identify the product or process inputs and outputs
OutputsX
Y
ControlFactors(can be controlled)
AB
1. Concept Selection (System Design) – sort the inputs into Control Factors and Noise Factors
NoiseFactors(cannot be controlled) P Q
OutputsX
Y
Stages of DesignStages of Design
ControlFactors(can be controlled)
AB
1. Concept Selection (System Design) – sort the inputs into Control Factors and Noise Factors
NoiseFactors(cannot be controlled) P Q
OutputsX
Y
Stages of DesignStages of Design
Types of Noise Factors
ControlFactors(can be controlled)
AB
1. Concept Selection (System Design) – sort the inputs into Control Factors and Noise Factors
NoiseFactors(cannot be controlled) P Q
OutputsX
Y
Stages of DesignStages of Design
Types of Noise FactorsInner Noise - wear
ControlFactors(can be controlled)
AB
1. Concept Selection (System Design) – sort the inputs into Control Factors and Noise Factors
NoiseFactors(cannot be controlled) P Q
OutputsX
Y
Stages of DesignStages of Design
Types of Noise FactorsInner Noise - wearOuter Noise - use
ControlFactors(can be controlled)
AB
1. Concept Selection (System Design) – sort the inputs into Control Factors and Noise Factors
RelationshipRelationship Quality – Quality – The The NewNew Economics Economics
“The Taguchi Loss Function is a better view of the world.”
W. Edwards Deming
Source: Out of the Crisis, W. Edwards Deming, 1986
Dr. Taguchi at 80 in 2004Dr. Taguchi at 80 in 2004
Quality Focus: Conformance to Requirements
Goal: Defect-Free Parts Activities: Assess Non-
Conformances, Scrap and Rework
Mindset: Reactive / Victim Skills: Fire-Fighting and
Problem Solving Impact: No Improvement in
Quality After Zero Defects, Temporary Solutions
Attributes: Physical and Mental Handoffs (separation, blame)
Quality Focus: Relationships Between Parts (Target Thinking)
Goal: Profit Beyond Measure Activity: Seeking Opportunities to
Invest in Better Relationships between Parts
Mindset: Proactive / Leader Skills: Process Control and Systemic
Solutions Impact: Continuous Investment in
Quality of Relationships, Long-Lasting Solutions
Attributes: Physical Handoffs, without Mental Handoffs (no separation nor blame)
Micro System Model(Team Work)
Macro System Model(Part Work)
Quality Focus: Conformance to Requirements
Goal: Defect-Free Parts Activities: Assess Non-
Conformances, Scrap and Rework
Mindset: Reactive / Victim Skills: Fire-Fighting and
Problem Solving Impact: No Improvement in
Quality After Zero Defects, Temporary Solutions
Attributes: Physical and Mental Handoffs (separation, blame)
Quality Focus: Relationships Between Parts (Target Thinking)
Goal: Profit Beyond Measure Activity: Seeking Opportunities to
Invest in Better Relationships between Parts
Mindset: Proactive / Leader Skills: Process Control and Systemic
Solutions Impact: Continuous Investment in
Quality of Relationships, Long-Lasting Solutions
Attributes: Physical Handoffs, without Mental Handoffs (no separation nor blame)
Micro System Model(Team Work)
Macro System Model(Part Work)
MIND THE PARTMIND THE PART
Quality Focus: Conformance to Requirements
Goal: Defect-Free Parts Activities: Assess Non-
Conformances, Scrap and Rework
Mindset: Reactive / Victim Skills: Fire-Fighting and
Problem Solving Impact: No Improvement in
Quality After Zero Defects, Temporary Solutions
Attributes: Physical and Mental Handoffs (separation, blame)
Quality Focus: Relationships Between Parts (Target Thinking)
Goal: Profit Beyond Measure Activity: Seeking Opportunities to
Invest in Better Relationships between Parts
Mindset: Proactive / Leader Skills: Process Control and Systemic
Solutions Impact: Continuous Investment in
Quality of Relationships, Long-Lasting Solutions
Attributes: Physical Handoffs, without Mental Handoffs (no separation nor blame)
Micro System Model(Team Work)
Macro System Model(Part Work)
MIND THE PARTMIND THE PART MIND THE GAPMIND THE GAP
Opportunities to ThinkOpportunities to Think
An InThinking RoadmapAn InThinking RoadmapAKA The Hotel CaliforniaAKA The Hotel California
InThinking Together (9 hrs)(Formerly known as “ET” and “Understanding Variation”)
Six Thinking Hats (8 hrs)
Kepner-Tregoe(24 hrs)
(Problem Solving and Decision Making)
Workshop”)
ManagingVariation as a
System (9 hrs)
The NewEconomics
Study Session
(14 hrs)
Understanding Taguchi Methods – Part 2 (40 hrs)
UnderstandingTaguchi Methods – Part 1
(40 hrs)
ools
DATT(16 hrs)irectppliedhinking
-
(Problem Solving and
DATT(16 hrs)DATT(16 hrs)
Design of Experiments & Taguchi Methods – An Overview (16 hrs)
Leading Systems(12 hrs)
(AKA the “Organization
Resource Leadership(8 hrs)
OD
iscu
ssio
n
ngoi
ng
(4th week, Th/Fri, 12-2pm PT)
Prerequisites
BTA…webinar
hink
ing
ette
r
(2nd week, Th/11:30-1pm PT)
bout
Lateral Thinking(16 hrs)
An InThinking RoadmapAn InThinking RoadmapAKA The Hotel CaliforniaAKA The Hotel California
InThinking Together (9 hrs)(Formerly known as “ET” and “Understanding Variation”)
Six Thinking Hats (8 hrs)
Kepner-Tregoe(24 hrs)
(Problem Solving and Decision Making)
Workshop”)
ManagingVariation as a
System (9 hrs)
The NewEconomics
Study Session
(14 hrs)
Understanding Taguchi Methods – Part 2 (40 hrs)
UnderstandingTaguchi Methods – Part 1
(40 hrs)
ools
DATT(16 hrs)irectppliedhinking
-
(Problem Solving and
DATT(16 hrs)DATT(16 hrs)
Design of Experiments & Taguchi Methods – An Overview (16 hrs)
Leading Systems(12 hrs)
(AKA the “Organization
Resource Leadership(8 hrs)
OD
iscu
ssio
n
ngoi
ng
(4th week, Th/Fri, 12-2pm PT)
Prerequisites
Distance LearningOpportunities
BTA…webinar
hink
ing
ette
r
(2nd week, Th/11:30-1pm PT)
bout
Lateral Thinking(16 hrs)
An InThinking RoadmapAn InThinking RoadmapAKA The Hotel CaliforniaAKA The Hotel California
InThinking Together (9 hrs)(Formerly known as “ET” and “Understanding Variation”)
Six Thinking Hats (8 hrs)
Kepner-Tregoe(24 hrs)
(Problem Solving and Decision Making)
Workshop”)
ManagingVariation as a
System (9 hrs)
The NewEconomics
Study Session
(14 hrs)
Understanding Taguchi Methods – Part 2 (40 hrs)
UnderstandingTaguchi Methods – Part 1
(40 hrs)Lateral Thinking
(16 hrs)
ools
DATT(16 hrs)irectppliedhinking
-
(Problem Solving and
DATT(16 hrs)DATT(16 hrs)
Design of Experiments & Taguchi Methods – An Overview (16 hrs)
Leading Systems(12 hrs)
(AKA the “Organization
Resource Leadership(8 hrs)
OD
iscu
ssio
n
ngoi
ng
(4th week, Th/Fri, 12-2pm PT)
Prerequisites
BTA…webinar
hink
ing
ette
r
(2nd week, Th/11:30-1pm PT)
bout
Beth Thompson, myrna.e.thompson, from
BCAG, is a certified instructor
Distance LearningOpportunities with Rocketdyne
Monthly AnnouncementMonthly Announcement
TARGET AUDIENCES: Members of management, individual contributors, suppliers, and customers who are providing leadership in "enterprise thinking" activities. Family members, "members of the community" and students are welcome to attend. "Members of the community" are citizens who are involved full or part time, or in a volunteer capacity, in community related work. Examples include hospital employees, teachers, religious leaders, scouting leaders, and youth sports volunteers.
An InThinking RoadmapAn InThinking Roadmap
The New EconomicsThe New Economicsof Variation: Learning from of Variation: Learning from Genichi TaguchiGenichi TaguchiPresented by Bill BellowsPresented by Bill Bellows