I'm sure you can all feel the boom in the automotive electrical systems market, which is one of the manufacturing industries.
The world is changing with improvements in autonomous driving technology and the acceleration of the sharing economy, but it is said that demand for in-vehicle electrical systems will continue to grow for the next 10 years. However, there are undeniable concerns.
The current state of domestic manufacturing, unable to withstand ever-growing demand
One cause for concern is the need to resolve the major issues of labor shortages and stable supply in order to meet growing demand, but many domestic companies are not prepared to meet the ever-growing demand.
To solve these problems, some companies are investing hundreds of millions of yen in automation and introducing robots, but approximately 99% of Japanese manufacturing is made up of small and medium-sized enterprises. It would be unrealistic to expect that the small and medium-sized enterprises that support Japan will be able to take the plunge into robotics, which requires an investment as large as starting up another company, within 10 years.
Unfortunately, there is no way to save all manufacturing at this stage.
However, if we focus only on the assembly process, we can see a ray of hope.
Therefore, it is important to achieve both a "reduced defect rate" and a "shortened cycle time." At first glance, this may seem like a trade-off, but if you can create a cycle that quickly produces high-quality products, you will be able to create a system that can withstand ever-growing demand.
What is the defect rate in manufacturing?
In the manufacturing industry, the defect rate is an indicator that shows the percentage of defective products among all the products produced, and is not simply a number that indicates the quality of the product.
The typical method for calculating the defect rate is "number of defective items ÷ production number × 100 (%)", and it is used as a typical KPI for quality control.
When defects occur, additional work is required for rework, disposal, re-inspection, and reproduction. Therefore, in the manufacturing industry, the defect rate is not only an issue on the ground, but is also positioned as an important indicator that is directly linked to management.
What is ppm? How is it different from the defect rate?
ppm stands for "parts per million" and is a unit that indicates the number of defects per 1 million units. For example, a defect rate of 0.1% is equivalent to 1,000 ppm, and a defect rate of 0.01% is equivalent to 100 ppm.
In the manufacturing industry, especially in areas where mass production and high quality are required, ppm is often used instead of %. One reason for this is that it allows for a more accurate understanding of minute quality differences.
Even defects that appear to be "0%" in percentages can be quantitatively evaluated to determine the room for improvement when expressed in ppm.
Is a 1% defect rate high or low?
A 1% defect rate may seem like a small number, but in the manufacturing industry where production volumes are high, the impact is by no means small.
For example, if a monthly production of 100,000 products has a defect rate of 1%, 1,000 of them will be defective. If the cost per unit is 1,000 yen, that alone will result in a loss of 1 million yen. When taking into account the labor costs of rework and re-inspection, and the risk of delivery delays, the actual loss will be even greater.
Also, how a 1% defect rate is perceived will depend on your perspective. Even if it is perceived as a "sufficiently low number" on the shop floor, it is often judged from a management perspective as "a number that still has a lot of room for improvement."
To bridge this gap, it is important to have a common understanding of the defect rate guidelines and acceptable ranges.
Manufacturing defect rate guideline
There is no absolute answer to the defect rate in the manufacturing industry that applies to all companies, because the defect rate varies greatly depending on the industry, product characteristics, production method, and quality requirement level.
The important thing is not to simply compare with the average of other companies, but to have a guideline based on your company's assumptions.
Guideline for defect rate in food manufacturing industry
Among manufacturing industries, the food manufacturing industry is characterized by stricter quality and safety requirements than other manufacturing industries. This is because contamination with foreign matter or labeling errors not only leads to waste but also leads to serious management risks such as brand damage and recalls.
Therefore, in the food manufacturing industry, the defect rate is not simply an indicator of production efficiency, but is also seen as an indicator of risk management. Because the impact of even a small number of defects is significant, stricter standards are often set than in general manufacturing.
How to set a defect rate target in manufacturing
Rather than setting a defect rate target based on idealism, start by correctly understanding the current actual values.
It is important to use past data to determine in which process defects occur and to what extent, and to identify lines that can realistically be improved.
On the other hand, setting goals that are too ambitious can be counterproductive. Unattainable numbers can lead to a decline in motivation on the ground and the numbers becoming meaningless, which can put improvement activities at risk of not being sustained.
How to think about the acceptable range of defect rates
Setting an acceptable range is something that is often overlooked in defect rate management. If you manage without determining an acceptable range, it becomes unclear where the problem begins, and it delays the decision to make improvements.
Therefore, it is important to clearly distinguish between "lines to improve" and "lines to maintain" for the defect rate. By setting these, it becomes possible to make decisions such as "if the tolerance is exceeded, we will immediately analyze the cause and consider countermeasures, and if it is within the tolerance, we will focus on maintaining stability."
In this way, organizing and managing defect rate guidelines, targets, and acceptable ranges leads to continuous quality improvement in the manufacturing industry.
Combining a diligent national character with AI, we achieve both a lower defect rate and improved cycle time
No matter how hard-working a nation may be, it is difficult to prevent all careless mistakes.
Even in the assembly process, takt time varies depending on the skill level of the workers, making it difficult to determine where the bottleneck is, and making it difficult to "reduce the defect rate" or "improve the cycle time."
However, by implementing AI, it may be possible to address both the "labor shortage" and "improved cycle time."
For example, there is no need for instructors or inspectors to be on-site, and by simply combining "existing human resources" with AI, it is possible to dramatically optimize the assembly process.
All that is required to implement this AI is"training an AI model"related to the work and a"camera for filming,"so it is expected to be possible to achieve this with less investment than introducing automated robots.
If cycle time changes, there will be hope for the "talent shortage"
Initially, the mission is to prevent mistakes in the assembly process, but as data is accumulated, the bottlenecks and "where mistakes are likely to occur" become clear.
By continuing to make these improvements, we will be able to allocate personnel appropriately based on their skill level, and we will also be able to actively hire staff from overseas for certain tasks.
Instead of traditional verbal instruction, AI can record appropriate work footage and use it for training, and AI can also act as an instructor when it comes to correcting work errors.
Key points for continuing to improve defect rates
Defect rates are not something that can be achieved by simply reducing them once; they only become meaningful if they are continually managed and improved. Here, we will introduce the key points to ensure that defect rate improvements in the manufacturing industry do not end up as a "one-off effort."
Define KPIs and get on the same page
The first important thing in improving the defect rate is to clearly position it as a KPI for continuous management, rather than a one-time figure. If it becomes an indicator that is only noticed when a problem occurs, improvement activities will not last long.
Therefore, it is important to set a "target value to aim for" and an "acceptable range that must not be exceeded" separately for the defect rate. The"target value"is an indicator to encourage improvement, and the"acceptable range"is a judgment standard for detecting abnormalities.
Furthermore, if there is a discrepancy in the numerical understanding of defect rates between the workplace, management, and executives, improvement decisions tend to be delayed. By creating an environment where the same numbers are understood in the same way, decision-making speed can be improved and improvement activities can be accelerated.
Create a system to keep things visible
To continue improving the defect rate, it is essential to build a system that produces the same figures regardless of who looks at it. If calculation methods differ depending on the person in charge, the figures will become less reliable and discussions about improvements will not progress.
In particular, in workplaces where defect rates (%) and ppm are used together, it is necessary to clarify definitions such as "which indicator should be used in which situation" and "how should the conversion be done" and unify operational rules.
Furthermore, only monthly or weekly compilations may miss signs of defects.
By visualizing defect rates in real time, problems can be detected while they are still small, enabling early action to be taken.
Systematizing improvement actions
Visualizing defect rates is meaningless if it does not lead to improvement actions. If it relies on the judgment of specific personnel or veterans, improvements will become personalized and continuity may be lost.
Therefore, when the defect rate exceeds a certain level, it is important to decide in advance the process of"who,""what"to check, and"what measures to consider,"so that anyone can see and take action to improve the situation.
In recent years, the use of AI and DX has also made it possible to more efficiently analyze defect trends and identify their causes.
Even in the manufacturing industry, where there is an increasing shortage of human resources, the key to sustaining improvements in defect rates is to establish a system that allows improvements to continue to occur.
It is entirely possible to achieve both through appropriate mechanisms
To meet the ever-growing demand, a stable supply of products and securing of personnel are necessary, but there are limits to the traditional paper-based checklists and cycle times that rely on experienced personnel.
There is no doubt that implementing AI to improve assembly processes will be a powerful tool in responding to these changes three, five, and even ten years from now.
Implementing AI requires less investment than introducing robots, and is a realistic way to make full use of existing human resources and achieve stable manufacturing with low defect rates.
For details on improving manufacturing defect rates, contact Macnica
Where should one start when it comes to using digital technology and AI to improve defect rates and shorten cycle times in the manufacturing industry?
Macnica offers the following services called "Digital Execution Factory" that help make DX an organizational culture.
- Strengthening governance systems that involve the entire company
- Accompanying the CoE, which spans business and IT departments, from concept design to launch and establishment
- A training program for specialists who can lead DX promotion on-site
- Development support using Mendix, a low-code development platform that allows you to gain small successes through agile development
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Through the above support, the Digital Execution Factory aims to create a situation where "DX that is optimal for each company is created spontaneously and continuously."
This "Digital Execution Factory" optimizes the practical knowledge established in Europe and the United States, where DX is advanced, for Japanese manufacturing, and is know-how that only Macnica can provide in Japan.
If you are facing any of the obstacles mentioned in this article or are having trouble, please feel free to contact us.