Consider an electron fired at a dual slit with a phosphor screen. While traveling from the electron gun, thru the slits, to the screen, the electron is described by a Wave Function. It has no fixed position or momentum. The Schrodinger wave passes through both slits and interferes with itself on the other side. The wave function evolves into a series of lines.
But when the electron interacts with the screen it always appears as a single point. It must do so by the laws of conservation. At the interaction it must have a specific location and momentum in order for there to be conservation of charge, momentum, energy, etc.
This interaction is enough to 'collapse the wave function'. No 'observation' is required.
How does this happen? There is no localized mechanism that can possibly make this work. The conservation laws are not local restrictions. They are universal.
Please note that this is my own explanation of now QM works, and does not necessarily reflect the official position of any school of thought. It does, however, reflect the actual use of Quantum Mechanics, in that systems evolve via the Schrodinger Equation and interactions must obey conservation laws. And No, it cannot explain how entanglement works.