Zero Defects Manufacturing: A New Standard for Quality Assurance
Imagine a world where all products worked exactly as expected.
However, this is not our reality. Defects and failures are omnipresent and they can present themselves in many different shapes and sizes from the smart refrigerator in your home to entire supply chains for a global manufacturer. Each potential defect has varying degrees of significance and, in some cases, a detrimental impact.
Defects occur in every phase of the typical product life cycle and can cost organizations millions, if not billions, of dollars each year. However the later a defect is discovered, it becomes exponentially more expensive with each phase. Typically, 85% of all defects are generated in the very early phases.
The cost of defects extends beyond mere maintenance and repair costs. When an organization’s asset, equipment, or process does not work as was originally intended, this can have a knock-on effect that could impact the following key areas of business:
- An organization’s reputation is put at risk
- There is the threat of losing customers as a result
- A loss in customers and an increase in repairs equates to lost revenue
- Less capital can lead to stagnant innovation
Today, organizations spend on average 25% of their time correcting and eliminating defects instead of ensuring that they do not occur in the first place.
These abnormalities impair quality, function, and utility across multiple industries such as manufacturing (e.g. expensive maintenance), automotive (e.g. product recalls), and the Food & Beverage (F&B) industry (e.g. contamination). Looking at the manufacturing sector alone, unplanned downtime incurs a cost of $50 billion annually for industrial manufacturers, and equipment failure accounts for 42% of these costs. To illustrate this further, on average just one hour of equipment downtime costs around $260,000.
Around 98% of companies lack good data on failure history. This results in organizations dealing with defects and equipment failures on a reactive basis rather than a proactive one. A lack of sufficient information or knowledge makes effective preventative maintenance nearly impossible to execute.
While a few still remain skeptical that a truly zero-defect future can exist, the fact remains that steps are already being taken toward complete zero defect manufacturing (ZDM). The zero defects theory aims to ensure that no organizational waste (e.g. unproductive processes and tools) will exist.
In the manufacturing landscape, the best defect is the one that never happens.
To gain deeper insights about the topic of zero defects manufacturing, we spoke to Sven O. Rimmelspacher, Co-founder and Member of the Advisory Board of ZERO defects, a modular, platform-based application that facilitates the step-by-step implementation of complete process safety in production. The solution is designed to support smarter decision-making for an iterative and agile process model, enabling predictive quality assurance and error prevention across the entire production value chain. Digital twins are created for each individual product that contains all relevant data and provides 100% traceability.
Advanced Decision Making to Achieve Zero Defects in Business
Why did you decide to develop ZERO defects as a joint venture and partner with Next Big Thing AG as a route to success?
Sven:Ten years ago, the concept and first version of ZERO defects was created as part of our quality management and manufacturing execution software. In 2017 I realized that we would have to rewrite the entire software to achieve a cloud-based, standardized, and scalable solution. Then in 2020, we came to a point where we could go to market with the product but I was convinced that the idea was so ambitious that it would require a strong partner to get the traction it deserves in today’s competitive market. That’s when I made the decision to spin off ZERO defects from our main product and search for a partner who invests in the project and also supports it with manpower, experience, and its global network as well. Partnering with NBT has transcended our product to far exceed our expectations with the help of their industry expertise, dedication, and ambitious vision.
What are several non-obvious benefits that organizations stand to gain when taking steps toward achieving zero defects?
Sven: It’s interesting that the most obvious benefit to prevent defects before they occur is one of the most important, and sometimes overlooked, non-obvious gains since it has a knock-on effect on value creation. Philip B. Crosby expressed this influential idea back in the 1960s. Most people know that prevention is key for zero defect products. However, in reality, many organizations have to dedicate around 20-25% of their time to addressing product challenges, focusing on customer complaints, or, in extreme cases, executing recalls which creates a significant cost impact and damages their brand reputation as well.
Most manufacturing execution systems (MES) and CAQ systems focus on incremental improvements of productivity and efficiency which requires a significant capital investment and does not always yield the desired return.
How do you secure buy-in from organizational decision-makers and employees to adopt a zero defects process and philosophy?
Sven: The “Rule of Ten” states that in the lifecycle of a product (from concept to delivery), the defect cost increases 10X with each step. In Germany alone, the small and medium-sized enterprises (SMEs) in the manufacturing industry have defect costs of around €47 billion each year. With a solution like ZERO defects, these SMEs can benefit from earlier detection of defects or, even better, reliably prevent all known defects. This approach results in substantial cost savings compared to the incremental improvement approach mentioned earlier. In addition, with ZERO defects the investments are much lower because we offer a subscription price per process – pay only for what you use. By combining the significant cost impact of defects on the business with the advantages that eradicating defects will achieve, buy-in comes from both sides of the organization — the C-level decision-makers and from the employees themselves.
Is there a typical strategy that organizations should follow when implementing a zero defects process in production?
Sven: Typically there are two approaches. The first one is the traceability approach. This strategy involves compiling all of the necessary data that must be tracked and analyzed in the process to achieve 100% traceability. Once the organization has illustrated which data points are essential to monitoring, a zero defect solution can be integrated into all the machines, devices, and sensors that will be crucial in providing this data. Organizations can then assign each asset to a unique ID of the product in order to account for each traceable component.
The second strategy is the real ZERO defects approach. Organizations can improve product quality and reduce manufacturing costs by identifying which process steps are unreliable, costly, or result in scrap. This strategy involves working on a single process step and identifying which parameters are necessary to stabilize this process step or to prevent defects entirely during this stage of the product lifecycle. A zero defect solution is then put in place based on these parameters. After successful implementation, the organization can leverage this agile and iterative approach for the following process step that they want to improve.
On average, how much time does it take for an organization to implement and execute a zero defect manufacturing strategy?
Sven: This depends on the number of products and processes which need to be optimized. With the iterative approach described above, this could be a continuous improvement process that should ultimately become a collective mindset for each organization. If this is the strategy an organization chooses, then generally that organization will implement a solution like ZERO defects for each new product that is created. With our solution specifically, the average implementation time for one process step is about two days. Once implemented, it can then be reused for the same process step which usually only takes a few hours.
What are the most crucial elements that an organization needs to consider to ensure that they do not over-design a zero defect strategy?
Sven: When organizations implement a zero defects solution into their business strategy, there comes a point in the process when they reach optimal quality where the risks of defects are no longer a concern, especially when organizations are able to identify them with an automated final inspection or functional test. In such cases, it may not be useful to invest in additional measuring devices, IoT technology, or similar. It is often the case that a calculation of the costs for possible further improvements is the simplest solution.
How would an organization monitor their zero defects progress and what does success look like for these organizations?
Sven: Organizations should evaluate the number of current defective parts of their product lifecycle and the corresponding defect cost for each process step at the beginning of a project. This ensures a starting point for these organizations to track their progress and KPIs. These organizations can then monitor which process steps are improving and can also see how rapidly they are able to reach their ROI.
In your opinion, what will the manufacturing landscape look like in the next ten years, and do you think a complete zero defect manufacturing process will be attainable by then?
Sven: There are a number of major topics that we’ve already been talking about for the last few years that will continue to gain momentum and impact the manufacturing landscape. For example, one such topic is the distributed manufacturing of individualized on-demand products. The products are not produced on fixed production lines, but rather on single machines that can be dynamically networked depending on the individual requirements. Here, ZERO defects can support organizations by using dynamic recipes, interlocking the correct process steps in value chains, and collecting and communicating the data in a standardized way. This gets even more complicated when unknown manufacturers are included in on-demand processes which requires another important technology — distributed ledger technology — to track data in a reliable way. AI and machine learning will also have a big impact on the future of manufacturing. In the not-so-distant future, these technologies will become crucial elements in manufacturing for pattern recognition and preventative action systems.
Personally, I believe manufacturers must be open to greater transparency about production processes and global information exchange. I dream of a world where all products work as expected but, of course, I’m aware that this is an ambitious vision that is so immense that we could end up working on the idea forever. However, when I am reminded of the €47 billion previously mentioned above and knowing that there are clear methods that organizations can implement to reduce these costs, I’m confident that at least the customers of ZERO defects are one step closer to a complete zero defects future.
Zero Defect Technology for Quality Management
From a high-level perspective, how does the ZERO defects solution work?
Sven: In order to prevent defects, organizations must understand which parameters are required to safeguard a process and which parameters are risky to the resulting quality. Parameters could include process parameters (e.g. operating temperature), product parameters (e.g. measurements or quality of surfaces), machine parameters (e.g. speed or cycle times), environment parameters (e.g. temperature and humidity), and also the tools and measuring devices used, the correct documentation, as well as the skills of the people involved. This solution can be compared to the preparation of a good meal. You need the right ingredients which must be fresh. You must follow a recipe, use the correct spices, maintain the temperature, and bring it all together at the same time to serve to guests. You’ll have to consider your guests’ food intolerances and diet. If it tastes good and all guests are satisfied then you did what you set out to achieve — create a good meal. This is similar to the process of ZERO defects.
From a technological standpoint, how simple is it to integrate ZERO defects’ technology into preexisting systems?
Sven: When connected machines, measuring devices, and IoT products “speak” a standard language (e.g. OPC UA, MQTT, etc.) then the integration is easy. If these standards are not supported, organizations will need some kind of a converter, like a travel plug, that must be developed and can then be reused again. The most crucial part of integrating ZERO defects into existing systems is to ensure that the interpretation of data is compiled in such a way that the solution can understand and analyze each value (e.g. temperature or diameter).
What role does digital twin technology play in achieving zero defect manufacturing processes?
Sven: When we create digital twins we identify the final products as well as the components used (raw material batches, assembled units, etc.). Using this information and assigning all the data to the individual products defines that a product is defect-free (based on the current knowledge). If later a defect occurs anyway, this data can then be used to prove that everything was manufactured using the planned parameters. If it is a new defect or cause of a defect, the digital twin data can be used to analyze and understand the problem. The result can then be used to identify all affected products. In this way, continuous improvement can be achieved.
What impact does zero defect manufacturing have on sustainability and the environment?
Sven: A zero defects strategy in business helps to reduce waste which has a direct impact on the sustainable consumption of materials. By significantly reducing wasteful practices in business, this strategy also benefits the environment by reducing energy consumption and the carbon footprint of the organization. Employees also gain additional insights into quality-critical processes and product parameters which results in greater internal collaboration and increases competencies within the company at all levels.
How do you think the concept of zero defects advances open innovation and industry collaborations?
Sven: Investing in a zero defect solution for specific products will result in considerable improvements across the entire organization’s value chain. Organizations can take this strategy even further by collaborating with other stakeholders. The open manufacturing approach has many benefits and follows the philosophy of the open source movement and democratizing technology. Open manufacturing may relate to the nature of the product (open design), to the nature of the production machines, to the process of production and innovation, or to new forms of value creation. In time, we will see an uptick in industry collaborations that build on top of each stakeholder’s strengths to create market-leading solutions.
The Machine Economy in a Zero Defect World
How would you define the Machine Economy in your own words?
Sven: The Machine Economy is a distributed network of individual machines or devices that are used for on-demand manufacturing which uses advanced technologies and facilitates the creation of new business models. These connected machines will each have different capabilities, but with one common thread tying them all together — producing and consuming goods and services with one another. As we move toward this new automated future, the Machine Economy will unlock trillions of dollars in business value.
A Zero Defects Methodology
If an organization fails to implement a strategy to prohibit poor maintenance practices, this could reduce the organization’s production capacity by up to 20%. As a result, these organizations must recognize that the ‘zero defects’ philosophy is a destination to work toward.
The path in which to get there is constantly changing with the world and must, therefore, be an agile process or iteration. This can be done by implementing a strategy to monitor, evaluate, and adapt at each stage of production. By simply integrating predictive maintenance activities into the organizational strategy, this alone could save up to 40% more than reactive maintenance. In addition, advanced technologies such as IoT, AI, and digital twins will need to be leveraged by organizations that wish to advance and future-proof their operations.
Ambitious initiatives like zero defect manufacturing often require industry collaboration in order to successfully take off. That is why strategic partnerships such as the one between about ZERO and Next Big Thing AG to create a joint venture, ZERO defects, represent a bountiful synergy for the innovation ecosystem that will result in real tangible results for the future of zero defect production.
Special thanks to Sven O. Rimmelspacher from ZERO defects for his valuable input on the topic.