Factory automation economic justification by Taguchi method: automotive example

Taguchi loss function methodology is used to evaluate process improvement economics relating to a minivan rear wheel alignment problem that is presumed to be correctable on the assembly line by application of automation. A customer perspective is presented wherein principal data are obtained from an actual case study. Pertinent factory costs are estimated for illustrative purposes to allow the consideration of a capital expenditure that is justified to minimize loss to society, i.e. the manufacturer and customers. Loss for both is calculated for three alternatives: do nothing; implement 100% product inspection and rework defectives; and implement process improvement automation. A case is made for a new category of justification for capital investments in factory equipment, namely, to increase measured value to customers.<>