Taguchi Loss Function (Why Goal Posts and Service Standards Don’t Work)

Posted on Feb 18 in Customer Service Metrics, Issues in Customer Research by robert gerst

Taguchi Loss Functions are essential to representing the voice of the customer properly. The detailed calculations may not always be required in a VoC study, but a little Taguchi thinking when interpreting results is essential.

Taguchi thinking challenges typical goal post (specification) thinking. You know the type, believing that anything within specifications are good, while anything outside of the specifications is bad. In manufacturing there typically two specification limits, one on either side of a desired or nominal value. In services, usually faster is better so we have only one specification limit such as we will serve customers within ten minutes. Anything less than ten minutes is good service, anything more is seen as bad service. Read More