In this paper, the analytical fault detection and diagnosis (FDD) is presented using model-based and signal-based methodology with wavelet analysis on signals obtained from sensors and sensor networks. In the model-based FDD, we present the modeling of contact interface found in soft materials, including the biomedical contacts. Fingerprint analysis and signal-based FDD are also presented with an experimental framework consisting of a mechanical pneumatic system typically found in manufacturing automation. This diagnosis system focuses on the signal-based approach which employs multi-resolution wavelet decomposition of various sensor signals such as pressure, flow rate, etc., to determine leak configuration. Pattern recognition technique and analytical vectorized maps are developed to diagnose an unknown leakage based on the established FDD information using the affine mapping. Experimental studies and analysis are presented to illustrate the FDD methodology. Both model-based and wavelet-based FDD applied in contact interface and manufacturing automation have implication towards better quality of life by applying theory and practice to understand how effective diagnosis can be made using intelligent FDD. As an illustration, a model-based contact surface technology an benefit the diabetes with the detection of abnormal contact patterns that may result in ulceration if not detected and treated in time, thus, improving the quality of life of the patients. Ultimately, effective diagnosis using FDD with wavelet analysis, whether it is employed in biomedical applications or manufacturing automation, can have impacts on improving our quality of life.