John Hunter's blog posts (all time)

Lean Information Technology

Tue, 11 Aug 2026

It is very easy for waste to be hidden in IT. I think it is more difficult to notice the inefficiencies in IT because much of the work is done in virtual space, not real space. I think that can make it more difficult to see the waste.

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Instead of taking the time to design these properly something is created quickly, for today. If the code had a physical existence I think much of it would look like a rube Goldberg contraption.

Appreciation for Bill Hunter

Mon, 10 Aug 2026

I frequently receive kind words from people who knew my father. A recent note:

I just thought I’d let you know how much I enjoyed your dad’s class as a grad student in 1979 at UW-Madison. I’m sure you’ve heard many comments like this, but I’ll add one more. He was a delightful and entertaining prof who clearly loved his subject. He made an impression on me one day by asking us a question about the British comedy radio program, The Goon Show, which I had heard. I think I was the only member of the class who raised his hand. After that moment, I always felt a special bond with him, because I thought it was great that he appreciated the wacky humor of that show.

I received a wonderful education at UW and your dad was no small part of it.

Management Training Program

Sun, 9 Aug 2026

So I said to the Toyota executive, “You’ve only got two or three suppliers per category, and you never take bids. How do you know you aren’t being ripped off?” So this guy, who was around 60, gives me an incredibly frosty look and says, “Because I know everything.” Everything? “That’s my job,” he says.

Reading “Because I know everything” brings to mind an arrogant blowhard to many in America (I think). Probably because most who would say that, are arrogant blowhards. But when someone has worked (a Toyota executive or a baker) for 40+ years in the same area those words can have quite a different meaning than a 31 year old MBA working in his third industry. Managing with constancy of purpose and long term thinking can make a big difference.

New Business Ideas Take Time

Sat, 8 Aug 2026

It is much easier to find a measurement of the benefit of eliminating some problem than the benefits of learning and taking more time to think.

[Also see: How To Create a Continual Improvement Culture, Transform the Management System by Experimenting, Iterating and Adopting Standard Work]

Why Fix the Escalator?

Fri, 7 Aug 2026

I think we all (including me) have to be careful when we make judgments of those we respect or find wanting. It seems our judgments often have more to do with our opinion of the person or company, than the specific behavior we believe we are judging. At times this is wise, I believe, but you should remember the basis for your opinion.

Going Beyond (or away from) Lean Thinking?

Thu, 6 Aug 2026

“Lean,” as it is commonly implemented, is not enough.

I believe ideas from Deming that are missing from many lean efforts would be helpful (Toyota applies Deming’s ideas to a much greater extent than those modifying Toyota’s practices for their organization).

Mainly what is needed is for organizaitons to more deeply impliment lean thinking. There is not a need to "go beyond" lean - the problem is poor implimentation not good implimentation of a management philosophy that has been overtaken by some new management ideas that were missing.

Deming’s Ideas at Markey’s Audio Visual

Wed, 5 Aug 2026

Mark Miller, General Manager, Markey’s Audio Visual spoke on Markey’s experience adopting Deming’s ideas.

Markey’s needs to anticipate the changing needs of customers and anticipate those needs
Unknown and unknowable – not really unknown just un-measurable (again taught to all employees)
Gemba – where the real work gets done (the customer interaction – he stressed time and again that the key to their success was Markey’s employees interaction with customers – Markey’s aims to provide the best customer experience the customer has with any company)
Break down barriers between departments – Markeys doesn’t charge internally. Indianapolis looses money – they own the high end equipment used by the other offices.
Intrinsic motivation v. Extrinsic motivation – he has the chart from page 122 of New Economics in Deming’s handwriting on his wall.

Eliminating Complexity from Work

Tue, 4 Aug 2026

as much as half of the activities of about sixty people had been to set up and take down jobs, expedite, move material, count material, and do other tasks that were unnecessary in the new process.

Tim Fuller's article discusses how much inneficiency was removed from the process by adopting single piece flow in 1985. How long did it take for management practice to understand this? Certainly this understanding wasn't widespred in 2005. I am not even sure it if it is widely understood and systems have been designed or redesigned with this knowledge in 2017.

Marketing in a Lean Company

Mon, 3 Aug 2026

The company needs to be viewed as one interdependent system not independent departments. The system needs to be optimized as a whole. And that means optimizing the overall system not optimizing the individual departments independently.

Six Keys to Building New Markets by Unleashing Disruptive Innovation

Sun, 2 Aug 2026

Unfortunately we do not often stop to examine the theory and therefore fail to learn as we should as we experiment and get new results. The most effective way I know of to improve the learning is to use the PDSA cycle, predict the effects of change and then examining the results of change. As simple as those two acts are, they are skipped far to frequently.

His second point, that managers frequently use overly simplistic models or theories is also important. Management is not well suited for simple theories that can be applied in any situation. Many interdependent variables are often at play and management requires not application of simple rules but applying knowledge in complex situations as best you can. Management is challenging and simple answers are often of little value – even though they are desired.

Toyota Engineers a New Plant: the Living Kind

Sat, 1 Aug 2026

Toyota’s vision:

First, making things that benefit both people and the world as a whole.
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Second, as a member of society, we must fulfill our responsibilities to all stakeholders. We must provide to customers cleaner, safer, and more attractive products with excellent value. To shareholders, we must enhance share value through long-term and stable growth by increasing profits and paying appropriate dividends. With business partners, we must engage in fair business based on a spirit of mutual benefit.

To our employees, we must provide a workplace where they can work with pride based on mutual trust and responsibility between labor and management, and respect for people.

There is Much to Improve in How We Use the Internet to Serve Customers

Fri, 31 Jul 2026

Webinars can have great interaction. They can provide very useful archived webinars covering some content (live webinars could be provided for free too if the reward was worth the cost) . If the public finds that free content valuable it can be about the most effective marketing in many ways including for gaining customers for live interactive webinars on more advanced topics.

Webinars also allow the presenter to do multiple two hour sessions for different clients anywhere in the world in the same day. So you could customize your content to specific client needs. Also each of those sessions could include employees from multiple sites around the globe.

Malcolm Gladwell and Synchronicity

Fri, 31 Jul 2026

Today I had lunch with a friend of mine, Sean Stickle, who continually provides me with interesting ideas to contemplate. One of the things he mentioned during lunch was a story in the New Yorker about the current college admission process.

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Obviously there are good things to learn from surveying and talking to your customers, but Deming understood that asking customers about what innovations they would like was dangerous.

Lean Consumption: the Customer’s Perspective

Thu, 30 Jul 2026

The concepts underlying lean consumption boil down to six simple principles that correspond closely with those of lean production.

Solve the customer’s problem completely by making sure that all the goods and services work together to do so.
Don’t waste the customer’s (or the provider’s) time.
Provide exactly what the customer wants.
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Box on Quality

Wed, 29 Jul 2026

Dr. George Box is not as well known in the general management community as his ideas merit (in my biased opinion – photo of Bill Hunter and George Box). He is well know in the statistics field as one of the leading statistical minds. Box on Quality is an excellent book that gathers his essays from his 65th to 80th year.

Innovation in Organizations

Tue, 28 Jul 2026

Innovation is one of the areas of management improvement that is not given sufficient attention. Innovation is critical to the success of organizations and to the Deming management philosophy. Deming however, never had much specific advice on how to innovate. The management strategies he proposed do support innovation: truly knowing your customers, constancy of purpose, truly knowing your business, understanding your purpose, etc..

The Quick Fix

Tue, 28 Jul 2026

W. Edwards Deming

One trouble with American industry today is that top management supposes that one lecture or one day will do it. “Come, spend a day with us, and do for us what you did for Japan, that we too may be saved.”

Management Improvement in Healthcare

Mon, 27 Jul 2026

Health care (and especially M.D.s) have always been seen as among the most difficult environment to introduce new management principles (universities are another). It was surprising to me since so much of management improvement is largely about using the scientific method, but it seems to be a reality. It seems these highly educated people are used to having huge freedom to act as they wish, and seem to resist participating in a system to improve rather than doing as they wish.

To improving results in health care I strongly recommend looking at the work of the Institute for Healthcare Improvement.

Education Improvement

Mon, 27 Jul 2026

Education is another area where applying management improvement concepts can be difficult. The Education area does require special care but management improvement concepts can work very well in Education.

David Langford has done some great work in this area. He wrote a book, Orchestrating Learning With Quality, which while I would definitely recommend it for anyone planning on applying these concepts...

Measuring and Managing Performance in Organizations

Sun, 26 Jul 2026

measure [parameter] in the hopes of improving [goal]

When dysfunction occurs, the values of [parameter] go up comfortingly, but the values of [goal] get worse. Dysfunction often occurs.

More Lean Thinking Applied in Government (2005)

Sat, 25 Jul 2026

Tinker Air Force Base, Oklahoma City Air Logistics Center:

the Tanker Division utilized an array of process improvement tools to facilitate improvements while increasing quality, efficiency and safety; thus enabling them to become the benchmark effort in lean implementation for Tinker Air Force Base. The results were dramatic: within four years, the average yearly flow time for a KC-135 PDM dropped 52%, the number of aircraft on station (WIP) decreased 49%, and capacity increased 75%.

Lean Government

Fri, 24 Jul 2026

I was one of the founding board members on the ASQ Public Sector Network (now the ASQ Government Division). I also, created and have maintained the Public Sector Continuous Improvement web site for a decade (some additional details on my background).

There have been many great efforts in the government, but still so much more needs to be done.

Here are articles exploring what has been done:

Doing More With Less in the Public Sector: A Progress Report from Madison, Wisconsin

The Dramatic Spread of Lean Thinking

Thu, 23 Jul 2026

Life indeed will be better for all of us with the improvement of management. The benefits of economic success are large. Good jobs are desired everywhere: USA, India, Germany, Singapore… Those jobs provide positive externalities that create a reinforcing loop of improving conditions.

There are many important factors (education, investment, political stability, rule of law…) to economic success. Effective management is among the factors that can provide dramatic increases in the standard of living of a country or community.

Statistical Techniques for Quality

Wed, 22 Jul 2026

As six sigma has taken the business world by storm in the past 15 years, many organizations have focused on acquiring and implementing the DMAIC methodology with performance benchmarks defined by “sigma levels”. However, after perhaps proclaiming the “six sigma organization” label for the company, it is important for the business leaders to look beyond immediate concerns, i.e. those issues embodied in black belt projects, and adopt holistic and forward-looking perspectives in seriously advancing organizational interests.

Innovation and the Creative Commons

Tue, 21 Jul 2026

Creative Commons is a license that lets the creators of intellectual property clearly define how that property may be used by others. Partially this license is a reaction to the poor way copyright law is being viewed today (see links below).

Partially it is tool that gives creators a way to provide for more interaction with their ideas. And this interaction is a great way to market, in the right circumstances. More managers should be thinking about how their organizations can use this tool to improve performance.

Performance Without Appraisal

Mon, 20 Jul 2026

The comments on the mini-microsoft blog shows performance appraisal continues to be an emotional topic. People on opposite sides of the debate are very passionate.

I admit it took me longer to accept Dr. Deming’s thoughts on performance appraisal than other ideas (and that is even with Peter Scholtes being a friend which gave me the opportunity to discuss the idea with him). So I understand it is not an easy concept to accept.

Managing the Supplier Relationship, at Ford and Elsewhere

Mon, 20 Jul 2026

Ford said they were committed to the Deming philosophy in the 1980’s and 1990’s. Donald Petersen, former CEO of Ford Motor Company, was one of those included in the Deming Library Tapes.

Nothing has changed from 1990 to today [October 2005] that explains why Ford saying they are going to deal with suppliers differently now should work any better then such statements 15 years ago. Until they acknowledge what problems in their management system have caused them to fail to use sensible management practices that have been well know for decades I see no reason to believe their claims that they will behave differently this time.

How Toyota Turns Workers Into Problem Solvers

Sun, 19 Jul 2026

This idea is simple. Creating an environment where this is actual the way things are, not just the way things are said to be, is difficult. That is why I believe so strongly in Deming’s management philosophy. The organization must be viewed as a whole. Benefits can be gained by adopting some concepts in a piecemeal manner. However, many benefits accrue only when the positive interactions between Toyota Production System (TPS – Lean) concepts occur (as systems thinking would predict).

How Toyota Turns Workers Into Problem Solvers

Sun, 19 Jul 2026

...The main difficulty is not a knowledge gap, but a performance gap. Most of what Toyota does has been published in numerous booksThe Toyota Way, The Machine That Changed the World and articles (see Curious Cat links to books and articles on Toyota’s management ideas). Reading that information is wise, but that is the easy part. The difficult part is actually managing more effectively...

SPC: History and Understanding

Sat, 18 Jul 2026

Setting control limits at 3 standard deviations is a decision based on experience. Shewhart, Deming and others determined it was sensible to take resources to look for a special cause was most effective for results more than 3 standard deviations from the mean – it is not a mathematical conclusion but a empirical conclusion.

Operational Definitions and Data Collection

Fri, 17 Jul 2026

Claims are often made about results that only are justified based on unstated assumptions about the real world results that the data are meant to represent. But those claims are undermined when there is no evidence provided that the assumptions are valid. Without operational definitions for the data there is a significant risk of making claims about what the data means that are not valid.

Measurement and Data Collection

Thu, 16 Jul 2026

I find it useful to ask what will be done with the results of data collection efforts (in order to confirm that the effort is a wise use of resources). If you don’t have an answer for how you will use the data, once you get it, then you probably shouldn’t waste resources collecting it (and I find there is frequently no plan for using the results).

I have found it helpful to ask: what will you do if the data we collect is 30? What will you do if it is 3? The answer does not need to be some formula, if 30 then x. But rather that the results would be used to help inform a decision process to make improvements (possibly the decision to focus resources in that area). I find, that asking that question often helps reach a better understanding of what data is actually needed, so you then collect better data.

Six Sigma Pitfalls

Wed, 15 Jul 2026

When people say “Six Sigma is great” or “Six Sigma is a waste” often they are talking about different things. But because in both instances “Six Sigma” is used people believe that the meaning must be the same in both cases. It often isn’t. While I find some Six Sigma efforts, books or consultants very useful many others (that also use the words “Six Sigma”) do not offer much of value.

What exactly is meant by “Six Sigma” varies quite a bit. And execution is critical to what makes one program succeed and another fail.

Deming and Six Sigma

Wed, 15 Jul 2026

I agree aspects of Six Sigma are bad. I also think some aspects of Six Sigma are good. And I think the same things about TQM.

The Purpose of an Organization

Tue, 14 Jul 2026

W. Edwards Deming described the purpose of an organization in New Economics, on page 51, as:

The aim proposed here for any organization is for everybody to gain – stockholders, employees, suppliers, customers, community, the environment – over the long term.

Design of Experiments in Advertising (2005)

Mon, 13 Jul 2026

It is great to see the application of Designed Experiments increasing. I am reminded of an article by my father, William G. Hunter, from 1975: 101 Ways to Design an Experiment, or Some Ideas About Teaching Design of Experiments. Examples of the topics of the designed experiments his students performed:

taste of stewed chicken
toys child chose to sleep with
quality of ground malt for brewing beer
distance football was kicked
absorption characteristics of activated carbon used with municipal waste water

W. Edwards Deming’s Seven Deadly Diseases

Sun, 12 Jul 2026

Seven Deadly Diseases

Lack of constancy of purpose
Emphasis on short term profits (Overreaction to short term variation is harmful to long term success. With such focus on relatively unimportant short term results focus on constancy of purpose is next to impossible.)
Evaluation of performance, merit rating or annual review (see: Performance Without Appraisal: What to do Instead of Performance Appraisals by Peter Scholtes).
Mobility of top management (too much turnover causes numerous problems)
Managing by use of visible figures, with little of no consideration of figures that are unknown or unknowable.

Jeff Bezos on Lean Thinking (2005)

Sat, 11 Jul 2026

I read a book recently about Toyota’s lean production methodology, which is very interesting

New Toyota CEO’s Views (2005)

Fri, 10 Jul 2026

Toyota has grown in the past few years, but [there’s a risk] that a belief that the current status is satisfactory creeps into the minds of employees. That’s what I’m worried about.

We should never be satisfied with the current status. In each division, function, or region, we still have numerous problems to cope with. We need to identify each one of those tasks or problems and fully recognize them and pursue the causes. This needs to be done by all the people working for Toyota.

Fast Company Interview: Jeff Immelt

Thu, 9 Jul 2026

My guess would be that what lead to this quote is not a lack of understanding that managers need the same qualities today they needed 10 years ago but the compulsion to feed the media frenzy for some incredible new insight. It just isn’t sexy to say “we need the same leadership qualities we needed in the past.” Deming stressed the importance of these “new” qualities he states more than 50 years ago and I think most decent managers have know you need to “know why we’re doing them”

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Customer focus and innovation would also be at the top of the list of important issues and were 10 years ago and will be 20 years from now. What is important for management does not change much.

occasionally innovation is so dramatic it drastically changes the practice of management, two examples:
1) the use of information technology
2) the whole quality movement [Deming’s ideas, SPC, Toyota/Lean, Six Sigma…

Management is Prediction

Thu, 9 Jul 2026

I believe Deming’s thoughts about prediction are most effectively put into action using the PDSA cycle. Specifically, you must predict the results in the planning phase (prior to piloting improvements). I find that this is rarely done. I don’t think the form of that prediction is critical (narrative with loose numerical guesses, precise numerical prediction…). The critical issue is making the prediction, then comparing the results to that prediction and then figuring out how your original understanding can be improved based on the new data.

Learning will not only be about the specific case being examined, but also, over time, learning about your tendencies in prediction.

Managing Fear

Wed, 8 Jul 2026

A good article on this topic is, Managing Fear by Gerald Suarez (who I worked with for several years). There are also 3 videos on this topic by Dr. Suarez, available from Management Wisdom, the producers of the Deming Library videos. I must admit I didn’t really understand the effects of fear and anxiety on performance until hearing Dr. Suarez speak on the topic many years ago.

Could Toyota Fix GM

Tue, 7 Jul 2026

Yes, Toyota could fix GM. Even the right leaders and managers, within GM, could fix GM but it is a huge long term job and it would be harder to do it internally because you will have to do it while competing with Toyota. Also they have some difficult issues to deal with since their previous managers did not tihnk of the long term (20-50 years out from the decisions they were making in the 70s though 90s).

I wouldn’t buy GM if I were Toyota, though. Why bother. Just grow Toyota, it is working very well so far. It makes sense to buy if you need to grow quickly to gain critical mass, or you will lose the opportunity to grow early in a fast moving market. High tech companies (like Cisco and Intel) often do well buying other companies – but just as often high tech companies make more mistakes buying than is justified by the successes.

Toyota as Homebuilder

Mon, 6 Jul 2026

many organizations don’t apply many concepts that have been proven effective for decades. So I hope Toyota gets into any business that continues to provide lousy value to the consumer (at least those where that consumer is me). I wish they would create their own credit card (they offer Toyota branded Visa and MasterCard credit cards now, in Japan), provide high speed internet service and run an airline.

Toyota is probably too smart to try and run an airline in the US (only Southwest seems to be able to that profitably).

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On the Toyota web site they list the following areas of non-automotive Toyota business: financial services, information and communications, marine and most surprisingly Biotechnology and Afforestation. Toyota states: “Biotechnology may seem far removed from the auto industry. It is, however, closely related to automaking in the context that they are both aiming to achieve a sustainable society, and their close relationship can be seen in the new Raum, launched in May 2003, which uses parts made from bioplastics.”

Targets Distorting the System

Sun, 5 Jul 2026

I still remember Dr. Brian Joiner speaking about process improvement and the role of data well over a decade ago. He spoke of 3 ways to improve the figures: distort the data, distort the system and improve the system. Improving the system is the most difficult.

Targets Distorting the System

Sun, 5 Jul 2026

Dilbert and Deming

Sat, 4 Jul 2026

Dilbert can show the silliness that is common place in many workplaces, as just that – silly. Point 10 of Deming’s 14 points called on management to eliminate slogans.

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The text works well for me, but I think Dilbert provides a great service in pointing out the same idea that such slogans are silly and even harmful in a way many others find more accessible.

SEC chief quotes Deming

Fri, 3 Jul 2026

Security and Exchange Chairman William H. Donaldson:

This approach will, ultimately, better serve investors, and it will also gradually temper the pressures on some corporate executives to fudge the numbers. It would behoove us all to remember the words of W. Edwards Deming: “People with targets, and jobs dependent on meeting them, will probably meet the targets – even if they have to destroy the enterprise to do it.”

Google: Good Service not Arbitrage (2005)

Fri, 3 Jul 2026

Google, to use a internet bubble phrase, is doing a good job monetizing eyeballs. However, that is not arbitrage it is just doing a good job of maximizing revenue and profits. Yes Google is able to make money because they are paid more by advertisers than it costs them to deliver what the advertisers want. But I don’t see how that is more like arbitrage than Toyota selling a car for more than it costs them to make the car.

Google: Good Service not Arbitrage

Fri, 3 Jul 2026

Traffic Congestion and a Non-Solution

Thu, 2 Jul 2026

For decades traffic congestion has been a problem in American cities and one that has continued to get worse. The typical proposed solution is to increase the number of roads. The theory behind this solution is not normally stated but, I believe, it amounts to: “if we build more roads then the system will have more capacity which has to decrease congestion.” Unfortunately this theory fails to take into account the past data on the increasing capacity of roads “solution.”

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Ackoff’s solution does require actually changing the system. That is not easy to accomplish. However, if the desire is to reduce congestion the solution is not likely to be to just keep doing what we have been doing (given that it isn’t working). Building more and more capacity doesn’t seem to achieve the desired results.

Performance without Appraisal

Wed, 1 Jul 2026

In the short article Performance Without Appraisal: What to do Instead of Performance Appraisals, Peter wrote:

Dr. Deming said of Performance Appraisals, “Stop doing them and things will get better.” He was correct. Many organizations, however, wonder what to do instead.

For those that do require “some alternative” Peter included some good ideas in The Leader’s Handbook(see chapter 9 “Performance without Appraisal pages 293 to 368). This chapter has excellent material for any manager.

Who Influences My Management Improvement Thinking?

Tue, 30 Jun 2026

Who influences my thinking on Management Improvement:

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Statistics for Experimenters – Second Edition

Mon, 29 Jun 2026

Complete with applications covering the physical, engineering, biological, and social sciences, Statistics for Experimenters is designed for individuals who must use statistical approaches to conduct an experiment, but do not necessarily have formal training in statistics. Experimenters need only a basic understanding of mathematics to master all the statistical methods presented. This text is an essential reference for all researchers and is a highly recommended course book for undergraduate and graduate students.

This updates the classic text by George Box, William Hunter (my father) and Stu Hunter.

Control Charts in Health Care

Sun, 28 Jun 2026

The point of using a control chart, and many of the management improvement tools, are to improve the efficiency and effectiveness of resources spent improving. The trick is not really to improve (that is pretty easy) the trick is to improve quickly and effectively (and in a competitive marketplace to improve more quickly than competitors). Where improvement resources are targeted is critical. In deciding which improvement options to explore it is important to understand the impact on the outcome (in this case the health of the patient).

Theory of Knowledge

Sat, 27 Jun 2026

When managing many fail to predict when attempting to test improvement ideas through what should be experiments (often they are just changes without verification the change produced a desired effect, any learning or study of the results of the change). Without prediction learning is much less (if there is any at all) than it would be with such prediction.

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With, even a fairly simple understanding of the theory of knowledge the effectiveness of management improvement efforts are greatly increased. This topic is difficult for most to understand, I recommend reading chapter four of the New Economics.

Designing a New Organization

Fri, 26 Jun 2026

Ackoff has done a huge amount of work in idealized design and thinking about the big ideas that can drive dramatic change. His ideas are exceptional. He even offers a plan for modeling the idealized organization and then a plan for how to transform the organization based on practical ideas that are feasible in the real world.

Price Discrimination in the Internet Age

Thu, 25 Jun 2026

The argument that you need to cripple products by geographic area to cope with currency fluctuations is false. It might be that a company wants to practice Price Discrimination to charge more where they can get more and less where they can get less. In the view of such a company, the internet, and other factors, have made it increasingly easy for people to buy in the low cost region and resell the items in the region where the company wants to charge higher prices. If you want to keep practicing price descrimination as a company you have to erect barriers to the free trade of your products by your customers.

Operational Excellence

Wed, 24 Jun 2026

Saying the organization is focuses on new principles (partnering, lean, etc.) is not the same as applying those principles with the great success that Toyota does. That difference is huge and is driving many companies to outsource and try to dramatically cut costs. Reducing costs should be the outcome of improving efficiency.

Toyota is successful manufacturing in the USA.

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I would agree that many companies don’t understand the critical importance of management excellence. Rather than take the difficult path to lead real change in their organization they focus on simple cost cutting measures (though usually not cutting executive salaries which have grown dramatically and are excessive in the USA compared to the rest of the world). That won’t work.

Taguchi Loss Function

Tue, 23 Jun 2026

In practice, I have seen the concept of the Taguchi Loss Function used quite a bit. I have never actually seen any losses quantified and totaled and shown on a graph. I think focusing specifically on who suffers a loss and what that loss could be, can help. I think actually quantifying the losses to society can be daunting. So, while I see the value in framing the concept that way I think to actually get the losses quantified you are best served by starting with those closest to the process and then adding additional loses to those results.

Second, if you attempt to use the concept to help you manage (as a guide in decision making) the impacts to society are a factor, but, I think the loss to your company, the customer and perhaps the end user are most important. A negative impact to society at large is not going to have the same impact to a decision maker as the same negative impact to the customer. The decision maker will likely be willing to invest more to reduce the loss to a customer than to society at large (and that seems logical and sensible to me).