A Study of Optimization of Process

by Using Taguchi’s
Parameter Design Approach
Zillur Rahman* and Faisal Talib**

Taguchi Methods (TMs) are statistical methods developed by Genichi Taguchi

to improve the quality of manufactured goods. Recently, TMs have been used
in the areas of biotechnology, marketing, advertising industries, corporations
and universities (Sreenivas Rao et al., 2004). TMs are intended as cost-effective
method to improve the performance of a product by reducing its variability in
the customer’s usage conditions. To meet international competition (Logethetis,
1992) the quality should start from the stage of product design and carried to
after sale service also. Quality achieved by process optimization is found to be
very cost-effective in gaining and maintaining a competitive pos6ition in the
world market. Taguchis’s method (TM) of quality engineering encompasses all
stages of product or process development, but the key element for achieving high
quality and low cost is the parameter design. Through parameter design,
optimal levels of process parameters are selected, such that the influence of
uncontrollable factors causes minimum variation of system performance.
The objective of this paper is to analyze and describe Taguchi’s methodology
of parameter design approach and to identify the various significant control and
noise factors of a process to be optimized. The paper also presents the criteria
for the use and selection of Orthogonal Arrays (OAs) and Signal-to-Noise ratio
(S/N ratio) for designing experiments and minimizing Taguchi’s quality
variation caused by various noise factors.

Introduction
Dr. Genichi Taguchi, a quality management expert, defines the quality of a product as
“the loss incurred by the society when a substandard product is sent to the market”
(Logethetis, 1992). This loss is due to the deviation in the functional characteristics of
the product/process from the target value. The deviation of the performance from the
target is due to some controllable and uncontrollable factors. Hence, to achieve good
and consistent quality not only the target response but also the variation should be
taken into consideration. This is essential, specially when quality needs to be improved

* Assistant Professor, Department of Management Studies, Indian Institute of Technology, Roorkee,

India. E-mail: yusuffdm@iitr.ernet.in
** Senior Lecturer, Mechanical Engineering Section, University Polytechnic, Aligarh Muslim
University, Aligarh, India. E-mail: ftalib77@yahoo.co.in

6 2008 The Icfai University

© Press. All Rights
The Icfai University JournalReserved.
of Operations Management, Vol. VII, No. 3, 2008
for the process. Taguchi Method (TM) of quality engineering encompasses all the
stages of product or process development, but the key element for achieving high
quality and low cost is the parameter design. Taguchi has advised design engineers
not to focus their total attention on product costs and performances. Sensitivity
to deterioration and manufacturing imperfection is an important issue. The emphasis
is on off-line quality control through design of experiments (doe). These developments
have led to a revolution for quality improvement in processes (Scibilia et al., 2001).
The Signal-to-Noise (S/N) ratio introduced by Taguchi is a measure of robustness
to internal and external sources of variation (Scibilia et al., 2001). According to TM,
a robust design is one that maintains high performance, while remaining insensitive
to changes in its environment. Over the years, several industries and corporations
have employed TM to improve the performance of products and processes (Wu, 2002).
The method provides robustness for product and process in the design or production
stage so that the organizer can produce high quality and low cost products in less time
(Wu, 2002).
Taguchi introduces his approach in using experiments’ design for (Ross, 1988):
• Designing processes in order to be robust to environmental conditions;
• Designing and developing product/processes in order to be robust to
component variation; and
• Minimizing variation around a target value
The philosophy of Taguchi is broadly applicable across industries. It considers
three stages of development (Ross, 1988):
1. System Design;
2. Parameter Design; and
3. Tolerance Design
System design is the process of applying scientific and engineering knowledge
to produce a basic functional prototype design. Parameter design is an investigation
conducted to identify the settings of design parameters that optimize the performance
characteristics and reduce the sensitivity of engineering design to sources of variation
(noise) (Enright and Prince, 1983). Parameter design requires some form
of experimentation for the evaluation of the effect of noise factors on the performance
characteristics of the product, defined by a given set of values for the design parameters.
This experimentation aims to select the optimum levels for the controllable design
parameter such that the system is functional, exhibits a high level of performance
under a wide range of conditions and is robust to noise factor. Tolerance design is the
process of determining tolerances around the nominal setting identified in the parameter
design process (Byrne and Taguchi, 1987). It involves the tightening of tolerances on
parameter where their variability could have a large negative effect on the final system.
Typically, tightening tolerances leads to higher cost. Besides this, Taguchi has introduced

A Study of Optimization of Process by Using Taguchi’s Parameter Design Approach 7

three important ideas to the design community (Tzyy-Shuh et al., 1994).
First, he suggests that designers should minimize quality loss, a quadratic function
of the deviation of performance parameters from desired values. Second, he advocates
designing products to be robust against manufacturing and environmental variations
(physical noise). These variations are inevitable and beyond the control of the product
designer. Good quality products should perform their intended functions regardless
of these noises. Third, he uses partial factorial Orthogonal Arrays (OAs) to run
experiments, a procedure borrowed from a traditional experimental design
(Tzyy-Shuh et al., 1994).
Considerable quality advantages can be obtained by Taguchi technique
implementation in every area. Although, these methods have been in existence right
from the 1980s, they are a subject of much debate and a lot of work is going on to have
a better understanding of TM.
The focus of this paper is on the robustness of the Taguchi’s Parameter Design
Approach used to optimize a process. Designing high quality product and processes
with minimum variation at low costs is an economic and technological challenge
to engineers and researchers. TM is a systematic and efficient way to meet this
challenge. This purpose is achieved by studying in detail the methodology of parameter
design approach given by Taguchi and identifying the various control and noise factors
of a process and by better understanding the use and selection of OAs and S/N ratio
models presented by Taguchi, so as to minimize quality variation caused by noise
factors. The outcome was proved to be very effective in producing high quality products
at a relatively low cost. Thus, the desired aim of robustness of a process can be achieved
by making the process insensitive to the various sources of variations and minimizing
defects.

Related Work on TM
The TM was introduced to American academia by Kackar (1985). Several books on the
TM were published later (Dehnad, 1989; Logethetis and Wynn, 1989; and Phadke,
1989), including the English translations of Taguchi’s Japanese books (Taguchi, 1986;
and Taguchi, 1987). Taguchi (1986) gives a good introductory description of quality
loss and parameter design. Taguchi’s work is based on statistical design of experiments
(Box et al., 1978; and Khuri and Cornell, 1987). Taguchi uses OA to layout the
experiments and S/N ratios to design robust products against noise. Taguchi and
Clausing (1990) give clear description of quality loss, robustness and OA. Mixed
variables optimization using Taguchi’s OA was studied by Chi and Bloebaum (1996).
Wu (2002) studies optimization of multiple quality characteristics using Taguchi’s
quality loss. Optimization of different casting process parameters gives an idea of the
best design and is studied by Muzammil et al. (2003) as well as by Guharaja et al.
(2006). Even a new concept on application of TMs in American Universities and
Corporations studied by Rajesh and Antje (2001), gives an idea about the use and
implementation of TM in the field of corporation and universities and works giving

8 The Icfai University Journal of Operations Management, Vol. VII, No. 3, 2008
good results. Simon Hsiang et al. (1997) use the TMs for the design of knife to increase
speed of cutting. The TM covers a wide area right from a product/ process to industries
and corporations. For more details, see Lochner and Matar (1990),
Roy (1990), and Taguchi (1986 and 1987) who studied the statistical design of
experiments and concentrated on minimizing the deviation from target caused by
uncontrollable factors, which they call ‘noises’. They also elaborate that noises could
be external, internal or unit-to-unit ones. Later, a new method of analysis for parameter
design in quality engineering was proposed and discussed.

Methodology
The methodology adopted to conduct this study was done through a detailed study of
the following points:
• Steps in robust designing;
• Design of experiments (doe);
• Identifying control and noise factors-The Ishikawa Diagram;
• Use and selection of OA as the experimental matrix;
• Use of the Signal-to-Noise (S/N) Ratio; and
• Discussing various models of Signal-to-Noise (S/N) Ratio
There are essentially three parts in TM (Tapan, 1993):
1. The loss function;
2. The design array (i.e., OA);
3. The Signal to Noise ratio (S/N ratio)
The loss function is the monetary factor associated with loss due to defective product/
bad design. The loss function defines what is ‘quality’ and plays an important role in
the decision-making process, since it provides the financial estimation of the trade-off
among variables. Taguchi’s design array (OA), based on the fractional factorial design,
divides the independent variables into controllable and uncontrollable variables.
Controllable variables are those that are capable of being controlled, while
uncontrollable or ‘noise’ variables may not be easily controlled in actual conditions,
but can be controlled in testing conditions. Taguchi’s S/N ratio stresses the importance
of studying the variation of response and classifies different expressions of S/N ratio
that are discussed under the model description of this paper.
In this paper, emphasis is on optimizing the process through Taguchi’s parameter
design technique which involves: firstly, the design of experiments (doe) and OAs and
secondly, the use of S/N ratios. The loss function and its use are beyond the scope of this
study.

Steps in Robust Designing

The principle of Taguchi’s parameter design is to select the process parameter in such
a way that it reduces the effect of environment factors to a minimum and such a system

A Study of Optimization of Process by Using Taguchi’s Parameter Design Approach 9

becomes a robust system. TM presents a systematic approach that is simple and
effective. It involves the stages of system design, parameter design and tolerance
design. In this study, parameter design is adopted to achieve the optimal level of
process parameters (design parameter) that leads to robustness of a system. By robust
design, we mean finding the optimum settings of the control factors to make the product
or process insensitive to noise factors. The steps followed to achieve robust design
( Figure 1) are explained in this paper:
Figure 1: Steps of the Taguchi Optimization Process

Planning the Experiment

• Identify the main function side effects and failure mode;
• Identify noise factors and the testing conditions for evaluating the quality loss;
• Identify the quality characteristics to be observed and the objective function to
be optimized;
• Identify the control factors and their alternate levels; and
• Design the matrix experiment (OA) and define the data analysis procedure.

Performing the Experiment

• Conduct the matrix experiments (Taguchi’s OA)

Analyzing the Experiment Results

• S/N ratio calculations;
• Analyze the data, determine the optimum levels for the control factors and
predict performance under these levels.

Confirmation Experiment

Source: Tapan (1993)

Design of Experiment (doe)

The design of experiment (doe) method has been widely used by industries to improve
the quality of product. With the help of this technique, the effect of several variables
could be studied efficiently. The objective of the experiment is to make comparisons
between the effects of different factors and then determine the best setting for each
factor. The goal behind this is to increase the awareness of the need to reduce the
variation in product performance and to introduce a comprehensive and systematic
approach to process optimization that results in the manufacture of consistently high
quality products with minimal variation at low cost and reduced cycle time.

10 The Icfai University Journal of Operations Management, Vol. VII, No. 3, 2008
 Figure 2: Example of Ishikawa Diagram Highlighting Aftermarket Supply-Chain Measures of Performance

Distribution in Inventory Delivery in

Supply Chain Stockholding Managements Supply Chain

Improved Delivery Method

Third Party? Quantity Stock Locations
Reduced Packaging
Who Picks? What Stage of Stock? Safety Stocks
Speed of Delivery
Who Packs? Global Locations? Accuracy of Forecasting
Reliability of Delivery
Who Distributes? Stock Classification

Customer
Customer
Expectations
Satisfaction
and Needs
Speed of Dealing
Reduced Lead Times
Quality of Information with Emergency Order Reputation
Stronger Supplier Links
System Delivery Time Response to Enquiries
Reduced In-Transit Times
Ease of Placing Orders Flexibility Prompt Handling of Complaints
Improved Customer
Order Receiving Places Reliability Confidence in Promise
Service Levels

Entire Supply Aftermarket in Customer

A Study of Optimization of Process by Using Taguchi’s Parameter Design Approach

Chain Orders Supply Chain Service

Source: Ravi Shankar (2000)

11
Five steps to the doe/process optimization path are:
1. Define the problem clearly and list all the possible factors contributing to the
problem (e.g.: see Figure 2 cause and effect diagram);
2. Determine appropriable number of variables and the range over which each
would be tested and select the design matrix (See Table 2a and b—selection
of OA);
3. Analyze resources needed for the tests, finalize design matrix or levels to be
investigated, and run the experiment;
4. Analyze data so collected to estimate the effects and plot the effects; and
5. Implement solution by running validation experiments at new levels

Identifying Control and Noise Factors – The Ishikawa Diagram

Ishikawa diagram, as shown in Figure 2, is also known as cause and effect diagram
and is a quality control tool that enables one to a systematic listing of causes (factors)
that may lead to performance deviation or poor quality (effect). Also called the fish
bone diagram because of its appearance, the cause and effect diagram has a cause
side written on the left hand side of the diagram and an effect side on the right. One
adds to this diagram any factor or cause that might possibly affect the response. This
approach defines the problem clearly and lists all the possible factors contributing to
the problem. It must be prepared after a brainstorming session and after gathering the
opinion of as many people as possible in order to identify all the relevant factors(or
causes). An example of cause and effect diagram of a supply chain mechanism is
represented in Figure 2, showing the various causes and effects that can affect
customers’ response, keeping the customer expectations and needs on priority.

Use of Orthogonal Array (OA) as the Experimental Matrix

Once the problem is identified and the factors contributing to the problems are listed
in the form of Ishikawa diagram, the next step is to identify the appropriate number
of variables and the range (treatment levels) over which these variables would be
tested. A design matrix is then constructed between the number of variables and the
range over which they are tested. This type of specially designed matrix is called OA.
Orthogonally designed statistical experiments allow several variables to be studied
simultaneously and economically. Also, OAs have a special structure which enables
the experimenter to extract rapidly more precise information (i.e., estimate the effects
with a smaller variance) in comparison to one factor at a time approach. The orthogonal
structure of the array makes it possible for the main effect of each variable to separate
itself mathematically from the main effect of the other variables. The objective of the
experiments is to make comparisons between the effects of different factors and then
determine the best setting for each factor. For making a particular comparison, one
could vary a single factor at a time. However, this is not always practical. As the
number of factors and the number of levels for each factor increases, the total number
of experiments becomes prohibitively large. Thus, it is desirable to use only a subset of

12 The Icfai University Journal of Operations Management, Vol. VII, No. 3, 2008
a complete factorial design, that is, a fractional factorial design. Therefore, OAs are
‘fractional factorial designs’ and symmetrical subsets of all combinations of treatments
in the corresponding full factorial designs. Taguchi’s catalogue of OAs is one of the
many fractional factorials displayed in statistical literature (Kackar, 1985; Phadke, 1989,
etc).
A Taguchi OA is denoted by LN(Sm), where ‘N’ is the number of experiments/test to
be conducted, ‘S’ is the levels at which these experiments is to be conducted, ‘m’ is the
number of variables/factors chosen in an N×m matrix, whose columns are mutually
orthogonal. That is, for any pair of column, all possible combinations of factor levels
appear equal number of times.
For example, if a process is identified which consists of four variables and each
variable has to be run at three different levels, then the actual number of experiments
to be conducted will be 34, or 81 experiments have to be performed for optimizing a
process. This design is called full factorial design. However, in many practical situations
it is sufficient to run only a fraction of these full factorial experiments. This helps
conserve both time and other valuable resources; therefore, for four factors running at
three levels, one may obtain much information by conducting only 9 experiments using
L9 (34) OA of 9×4 matrix (as given by Taguchi’s standard OA) rather than conducting
81 full factorial experiments as shown in Table 1. The various OAs can be obtained
from Taguchi’s standard catalogue which is widely used.
Taguchi’s OA can be used for conducting multifactor experiments, where the column
corresponds to the factor and row corresponds to the experiments to be conducted (see
Table 1) and the entries in the columns correspond to the factor levels. Using Taguchi’s
OAs allows the estimation of effects of the factors simultaneously. Thus, optimal or
near optimal settings for each factors can be determined after conducting and analyzing
these experiments.
Table 1: L9 (34) Orthogonal Array
Factor Levels
Experiment
1 2 3 4
1 1 1 1 1
2 1 2 2 2
3 1 3 3 3
4 2 1 2 3
5 2 2 3 1
6 2 3 1 2
7 3 1 3 2
8 3 2 1 3
9 3 3 2 1
Source: Tapan (1993)

A Study of Optimization of Process by Using Taguchi’s Parameter Design Approach 13

Selection of OA
The first step in selecting the correct standard OA involves counting the total degrees
of freedom (dof) present in the study. This count fixes the minimum number
of experiments that must be run to study the factors involved. In counting the total dof,
the investigator commits one dof to the overall mean of the response under study.
Degree of freedom for number of variables running at different levels = Number
of control factors × (Number of Levels-1). Therefore, The total dof = dof of overall
mean + dof for number of variables running at different levels. This means, one must
conduct at least experiments equal to total number of dof to obtain the desired effects.
The corresponding OA must, therefore, have at least rows equal to total number of dof.
Therefore, for selecting an OA the number of factors and levels to which these factors
should be run must be known, and then the experimenter has to follow the rules for
selecting standard OA as mentioned in the Tables 2a and b.
To conserve resources, generally the investigator attempts to employ the smallest
size OA, meeting the purpose at hand. Experts recommend that a beginner should
consider running experiments with all factors set either at two or three levels each.

Table 2a: Rules for Selecting Standard OAs

Number of Factors OA to be Used

2-3 L4
4-7 L8
8-11 L12
12-15 L16

When all experimental factors have only three levels

Table 2b: Rules for Selecting Standard OAs

Number of Factors OA to be Used

2-4 L9
5-7 L27
Source: Tapan (1993)

Use of the Signal-to-Noise (S/N) Ratio

After selection of appropriate OA, the next stage is to analyze the collected data.
Taguchi recommended several special forms into which experimental data on process
performance could be transformed before optimization. Taguchi called these special
forms Signal-to-Noise (S/N) ratios. The S/N ratio is a special kind of data summary
which is able to combine two characteristics into the desired one and is often used in
analyzing the data for parameter design.

14 The Icfai University Journal of Operations Management, Vol. VII, No. 3, 2008
Models Used in Calculating S/N Ratio
Suppose for ‘n’ simple continuous observations y1, y2, y3,....yn, represent multiple values
of a performance characteristic ‘Y’ observed in the parameter experiments, then the
following respective S/N ratios become the most appropriate choices for the optimization
of design parameter settings for the cases stated below:
A) If nominal-is-best characteristics for the customer, then the designer should
maximize the S/N ratio:

 y bar
2
 n
yi
n
y i  y bar 2
S/N= 10 log10  2  where, ybar=
 S 

i 0
n
and S2= 
i 1
(n  1)

B) If being on target ‘’ is the best then one should maximize:

 2  y i   2
S/N= 10 log10  2  where, S2=
S 
i n  1
C) If smaller-is-better characteristic for the customer, one should use:

 y i2 
S/N= –10 log10 


i
n


D) If larger-is-better characteristic for customer, then:

  1 
  y 2  
 i 

S/N= –10 log10  
i
n 
 
 

E) If one measures product performance on a binary ‘(GO/NO GO)’ scale, Taguchi

recommends that one should use the following performance statistics:

 p 
S/N= 10 log10  1  p  where ‘p’ is the proportion of products found good in
 
the parametric experiments.
In design optimization, one always attempts to maximize the S/N ratio. Maximization
of S/N ratio becomes equivalent to minimizing the loss. Further, use of S/N ratio attains
robustness independent of target setting.

Conclusion
By using any one of the parameter design approaches, as mentioned, that best fits the
problem, S/N ratios are calculated and analyzed. The average values of S/N ratios for
each factor at different levels are calculated and plotted on the graph from where the

A Study of Optimization of Process by Using Taguchi’s Parameter Design Approach 15

maximum S/N ratios are obtained. From maximum S/N ratio, the corresponding process
factors and the level at which the experiments were conducted are obtained and are
treated as the most important factors that affect the performance of the product/process.
Thus, the process is optimized under these conditions. Finally, confirmation experiment
is to be performed using the optimum settings of the process parameters obtained
through the investigation. It must be noted that confirmation experiments for the
predicted possible best settings must be conducted for real optimal design or extremely
close optimal designs.
From the analysis, it is proved that, by improving the quality by using TM
of parameter design at the lowest possible cost, it is possible to identify the optimum
levels of signal factors at which the noise factors effect on the response parameter is
less. The outcome of this paper is the optimization of process parameters of any process
which leads to minimum defects, i.e., noise effect. Hence, Taguchi’s parameter design
methodology has proved to be an effective approach in producing high quality products
at a relatively low cost, and thus the required objective of parameter design (or robust
design) of getting the best settings of the process parameters, thereby making the
process functional performance insensitive to various sources of variation. 

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A Study of Optimization of Process by Using Taguchi’s Parameter Design Approach 17