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Reduce manufacturing costs in Mexico by implementing a state-of-the-art quality system

Reduce manufacturing costs in Mexico by implementing a state-of-the-art quality system

Emerging Industry 4.0 quality system technologies provide the tools to significantly reduce manufacturing costs in Mexico and to increase profitability.

Manufacturing in Mexico’s maquiladora industry can demonstrate examples of continuous improvement in quality, as well as very costly quality-related errors. For example, the automotive industry is one that places heavy emphasis on the production of a high-quality product. Despite this fact, auto companies are frequently subject to recalls that are caused by mistakes that are committed by themselves or their suppliers.

If this happens in such a quality conscious industry, what can we expect from other manufacturing sectors? According to the American Society of Quality, quality costs, i.e., all those tools, philosophies, and resources that a company pays to avoid errors and defects can reach as much as 20% of the revenue of companies that are manufacturing in Mexico.

It is undeniable that companies make quality-related mistakes every day.  This is despite the fact that reputable manufacturers have made the effort and assumed the cost of instituting rigorous processes and systems for inspection and quality assurance.  They do this because they know that the viability of a product, a line of business, or the reputation of the company depends heavily on the use of such tools. Still, maintaining a fully functioning quality system can represent a significant financial decision. Taking on this expense, however, can actually serve to reduce manufacturing costs in Mexico.

For example, there are compliance regulations, which include all those related to planning, control, and review to ensure that a product has no defects. Also, there are prevention and evaluation costs. These can include processes and training for employees so that they can adequately monitor and control production. Other costs include those related to the entire inspection and testing process of a product.  This needs to be invested in to make sure that that the manufactured item works well before delivering it to the point of sale.

On the other hand, companies must also deal with the Mexico manufacturing costs of nonconformity, which involve the financial quantification of all problems that cause defects. They can be internal before the product reaches the point of sale, or external.  The latter ones are those that are detected by the consumer. In total, both costs can account for up to one-third of Mexico manufacturing operating costs

It is true that most companies implement lean manufacturing systems and tools to try to reduce manufacturing costs in Mexico that are a result of discovered nonconformities. Companies that implement emerging Industry 4.0 technologies can make themselves more cost-effective and, therefore, more profitable.

Why do emerging digital technologies help organizations address quality issues? Consider some of the elements that make up the quality of a product: weight, color, diameter, size, temperature, and humidity. Collectively, all of these metrics can be essential to meeting customer requirements. Each has objectives that require monitoring at different times, collecting information to measure the manufactured product, and comparing it to a standard; If the results are positive the process continues, if not, corrections are made.

The problem with companies that have not implemented digital technologies driven by Industry 4.0 to this process is that often make corrections late in the production process.  That is when mistakes have already resulted in a tangible economic cost. Why? Because they usually collect information from each step of the process manually and often generate inaccurate and erroneous data.

If data is collected earlier in the measurement and comparison processes, the result would be closer to a zero-defect outcome.  This is entirely possible with IoT (Internet of Things) technologies.  Fortunately, the cost of IoT tools can be scaled to accommodate a wide range of budgets

At the end of the day, the most important thing is to find the right use of these technologies within the context of each individual manufacturing operation. What can be done with digital data that determines the quality of a factory-produced product? How can companies employ emerging technologies to find new levels of efficiency and productivity, while working to reduce manufacturing costs in Mexico?

Some companies prefer to explore technological options that are available in the quality inspection area of the final product. For example, some companies that have combined IoT with AI have made great progress in accuracy, while significantly lowering costs.  These are excellent tools to support the people who do this work, because, unlike the human eye, such a technology does not get fatigued or change its criterion over time; therefore, the possibility of making mistakes is significantly less.

In addition to discovering errors at the beginning of the production process, it is also possible to anticipate mistakes before they are committed. In this case, the use of digital technology is particularly effective. By creating a virtual replica of the production process, it is possible to predict events and to detect deviations at different stages of the process.  This allows companies to deal with them before they have an adverse economic impact. This may be a more complex solution, but the impact it has on the product and its associated costs can be significant.  Through the use of these new quality system technologies, it is possible to significantly reduce the cost of manufacturing in Mexico.

Many companies have demonstrated that state-of-the-art quality system technology can be an excellent tool if it is used correctly to address product quality problems. Never before has industry had such an opportunity to revolutionize its controls and processes and reduce its manufacturing costs in Mexico through the use of tools that have been created by Industry 4.0.

 

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