The cost of human mistakes in the woodworking industry - Production assistant

The cost of human mistakes in the woodworking industry 

Automation in the woodworking industry is different from that seen in other types of industrial manufacturing because there’s a lot more custom manufacturing than in other assembly-line industries such as the food or automotive industries.  

So all this talk about Industry 4.0 for your woodworking factory may be slightly different from what you think.  

Here’s one of the biggest differences versus large multinational manufacturers – automation is not only about replacing your people with robots, it’s firstly about empowering them with information so they can focus on their craft and do a great job. Not to mention attracting the next generation, who expect automation and digital tools. 

Over the years, you’ve been absorbing human errors as just part of the cost of doing business. Imagine if you could eliminate the majority of them? That could add up to converting 40% of your costs into money in the bank! Material waste, incomplete shipments, downtime, service calls, all of which add up significantly, all of which can be mitigated or eliminated with automation.  

Human errors – 20% to 40% of your total manufacturing costs…. 

Human errors are costing manufacturers a fortune and have increased with the high employee turnover thanks to labor shortage. As an indication, industrial manufacturing companies report between 5% and 30% of their total manufacturing costs are due to scrapping and reworking (according to the National Institute of Standards and technology). Another study by the International Journal of Engineering Research and Applications also reports that human errors account for up to 80% of quality defects. 

For woodworking companies like yours we estimate that this cost jumps from between 5% and 30% to between 20% and 40% of the total manufacturing costs.  

Why is the cost of human error higher in the woodworking industry than other industries? 

The cost of human errors is higher in the woodworking industry due to 2 factors:  

  1. Wood is a ‘’living’’ material, so when there’s a mistake it’s often completely scrapped and wasted, versus materials such as metal that can be melted and reused 
  2. The fact that there is far more custom manufacturing in the cabinetmaking industry than in the assembly-line industries means that automation has been slower to make its entry into woodworking factories. And less automation means more human error.  

Where you’ll see significant savings 

Let’s start at the end, shipping and delivery, where unfortunately most errors are realized, and where the costs are significantly higher – up to 10X higher than an error caught during production!  

The comparative cost of errors in the cabinet-making industry: 

  • During sales process and quote = $1 
  • In office during production planning = $10 
  • In factory during manufacturing process = $100 
  • During shipping process = $1K 

The snowball effect – the direct and indirect costs of human mistakes 

Let’s take the concrete example of an incomplete delivery. There are direct, measurable costs, but there are also indirect (hidden) costs which are just as important, if not more so, and which reverberate throughout the entire manufacturing process, impacting everyone involved. 

Direct costs  

  • Labor costs to search for the missing part (often not found) 
  • Cost of manpower (production manager) to plan the remanufacturing of the part (urgently) and to schedule a new delivery date to the customer (office) 
  • Cost of material AND labor to remanufacture the part  
  • Cost of repacking the part 
  • Cost of transport AND manpower to return to deliver and install the part at the customer’s premise 

Indirect costs  

  • Customer disappointment and/or dissatisfaction, who may tell other people about the problem, tarnishing the reputation you’ve spent years building. 
  • Having to integrate the replacement part into your production process as a matter of priority, thus delaying other projects 
  • The impact of changes in plans/schedules for all employees along the line 
  • The impact on the ability to deliver everything currently scheduled (disrupting schedules and having to notify other customers that their delivery has to be postponed) 
  • Unnecessary pressure and stress for employees who have to rush to clean up the mess 
  • Negative impact on employee motivation, as they have to deal with the urgency of the situation and deal with a dissatisfied or even angry customer. 

Implementing automation technology allows manufacturers to realize cost-saving efficiencies every step of the way, addressing all the direct and hidden costs of errors.  

Here are some concrete results you can expect from production process automation: 

  • Significant reduction of incomplete shipments 
  • Elimination of unnecessary communication and handling between departments 
  • Important improvement in the assembly time 
  • Better customer experience = more word of mouth and more referrals! 
  • Increased employee satisfaction!  
  • Another benefit is giving your employees more satisfying jobs and opportunities. 

One cabinet manufacturer told us they used to have four people dedicated full time to service calls, and now, after automating several steps of his manufacturing process, it’s only 1 part-time job. Those people are now dedicated to more productive and stimulating jobs.  

A few essential questions to help you evaluate the additional profits you could make by eliminating errors 

  1. How often do you go back on a job (service calls, fix small issues, replace parts, …) 
  2. How often are your deliveries incomplete? 
  3. How often are parts lost in your shop (have you ever quantified the time spent searching for parts?) 
  4. How much time is spent gathering parts prior to assembly? 
  5. How much time does your production manager spend putting out fires and trying to get the completion status of a project? 

With automation, you are empowering your people with the tools and information to be more productive, more efficient and produce better quality.  And remember : embracing automation does not entail an abrupt overhaul of all your processes; rather, it should be approached gradually, taking one small step at a time. 

Veronique Plessis Belair 

COO – WEB-CAB 

Cost of a mistake depending on where it’s found – Industry 4.0