The aerospace industry has a dirty secret: Cost of Poor Quality (CoPQ) often eats 15-20% of revenue, and in some firms, it tops 40%. The American Society for Quality reports that the Cost of Quality typically ranges from 15–20% of sales and can be as high as 40% . These aren't abstract numbers—they're real dollars lost to scrap, rework, delays, and audit findings.
According to Lean Aerospace, thriving companies maintain Cost of Poor Quality at about 10–15% of operations .
MLNavigator's AI-powered drawing compliance system is designed to help catch errors during design review—before parts hit the shop floor. Pilot programs begin in 2026 to validate the system's effectiveness in reducing drawing-related errors.
Research from ASQ and Autodesk reveals the magnitude of the CoPQ crisis:
What is Cost of Poor Quality?
Cost of Poor Quality includes all expenses incurred because work failed to meet specifications the first time. In aerospace MRO, that breaks down into four categories:1. Internal Failure Costs
- Scrap and rework: Parts that don't meet spec
- Re-inspection: Extra QA cycles after corrections
- Engineering changes: Rushed ECNs to fix drawing errors
- Downtime: Production stops waiting for clarification
2. External Failure Costs
- Warranty claims: Customer returns and repairs
- Penalties: Late delivery fees, contract liquidated damages
- Lost business: Customers move to competitors
- Reputation damage: Word spreads in tight-knit aerospace community
3. Appraisal Costs
- Inspection labor: QA time verifying work
- Testing: Non-destructive and destructive tests
- Calibration: Maintaining measurement equipment
- Supplier audits: Verifying subcontractor quality
4. Prevention Costs
- Quality training: Teaching standards and procedures
- Process improvements: Root cause analysis, corrective actions
- Quality planning: Developing work instructions
- Tool and equipment: Investments in quality systems
Industry Statistics: The $5M Problem
Cost of Poor Quality: Industry Comparison
Based on ASQ Cost of Quality studies and industry research. Assumes $10M annual revenue baseline.
- 15-20% average CoPQ: ASQ research shows typical aerospace manufacturers lose nearly a fifth of revenue to quality failures
- 40% high-CoPQ firms: Some shops report quality costs exceeding 40% of total operating expenses
- $165M annually: Autodesk/FMI study found large contractors lose up to $165 million to bad data, with $7.1 million in avoidable rework
- ECO cost impact: Engineering change orders with major project scope exceed initial budgets by 72%, compared to 11% for projects without changes
Boeing 787: When Drawings Fail at Scale
Boeing halted 787 Dreamliner deliveries in February 2023 due to fuselage issues . The result? Production delays costing billions and customer confidence shaken. While Boeing's scale is extraordinary, the root causes—drawing errors, supplier miscommunication, and rework loops—plague MROs of all sizes.F-35: Quality Gaps in the World's Most Expensive Program
The F-35 program has faced persistent quality challenges. The GAO reports that F-35 sustainment cost estimates increased 44% from $1.1 trillion in 2018 to $1.58 trillion in 2023 . Even in high-stakes defense programs with stringent oversight, documentation and quality issues slip through—underscoring the need for AI-assisted prevention at the source.How MLNavigator Cuts Cost of Poor Quality
MLNavigator's Aerospace Drawing Intelligence System (MLNavigator) attacks CoPQ at the root: the moment a drawing enters your workflow.1. Instant Compliance Scanning
During design review, MLNavigator analyzes CAD files or PDFs. Within 2-5 seconds, it flags:- Missing or incomplete tolerances
- Non-standard surface finish callouts
- Ambiguous GD&T (Geometric Dimensioning and Tolerancing)
- Missing material specifications
- Incomplete welding or heat treatment notes
2. Learning from Your Shop's History
Every time an engineer corrects a flagged issue, MLNavigator's LoRA adapters learn. If your shop consistently requires tighter tolerances on bearing surfaces, MLNavigator will start flagging looser specs proactively. This institutional memory ensures past mistakes don't repeat—even after key employees retire. Impact: Shifts quality management from reactive detection to proactive prevention.3. Audit-Ready Documentation
All scans, flags, and corrections are logged immutably with BLAKE3 hashing. When auditors ask, "How do you ensure drawing compliance?" you can show:- Every drawing scanned
- Every issue flagged
- Every correction timestamped
- Adapter version used for each scan
4. Reducing Tribal Knowledge Risk
In many MROs, the lead quality engineer carries decades of tribal knowledge in their head. When they retire, that expertise walks out the door. MLNavigator captures that knowledge in adapters, making it accessible to new hires within days instead of months. Impact: New engineers productive in 2 weeks vs. 8-10 months.Understanding Your Shop's CoPQ
Let's run the numbers for a typical mid-sized aerospace MRO: Baseline (Before MLNavigator)- Annual revenue: $10M
- CoPQ at 20%: $2M in waste
- Breakdown:
- Scrap/rework: $840k (42%)
- Miscommunication: $560k (28%)
- Schedule delays: $360k (18%)
- Other: $240k (12%)
- CoPQ reduced to 10%: $1M in waste
- $1M annual savings
- Edge tier hardware: $10k–$25k (one-time)
- Annual maintenance: ~$3k–$5k (15-20%)
- Payback period: Under 3 months
What This Means for Investors
The aerospace compliance AI market sits at the intersection of three massive tailwinds:- CMMC enforcement by 2026: Defense suppliers must certify or lose contracts
- $755B DoD contracting budget: Massive TAM with regulatory moat ().
- Aging workforce: Tribal knowledge loss accelerates need for AI capture
Prevention vs. Detection: A New Paradigm
Traditional quality management focuses on detection: inspect parts, find defects, rework or scrap. This approach is expensive and reactive. MLNavigator shifts to prevention: catch errors before they propagate. By scanning drawings during design review, MLNavigator prevents:- Wrong material orders
- Machining to incorrect tolerances
- Missing critical specs
- Misinterpreted GD&T
Stop the Bleeding
Cost of Poor Quality isn't inevitable. It's a symptom of reactive quality management—catching problems after they've already caused damage. MLNavigator prevents errors at the source: the engineering drawing. CoPQ averages 15-20% of revenue. Some firms hit 40%. A 10-point reduction saves a $10M shop $1M annually—far exceeding the cost of an AI-powered system. The question isn't whether you can afford it. It's whether you can afford not to stop the bleeding.MLNavigator Begins Pilot Programs in 2026
Schedule a pilot to measure your baseline error rate and prove the ROI in 12 weeks. Apply now to secure your spot.
Apply for Pilot Program