The Pulse of Quality in Manufacturing 2024

Real-world feedback on the trends, issues and challenges

that affect quality professionals worldwide
 Quality champions

Thank you for reading “The Pulse of Quality in Manufacturing

2024” industry survey results presented by ETQ, part of
Hexagon. We undertook this initiative to collect real‑world
feedback on the trends, issues and challenges that
affect quality professionals across the U.S. and selected
manufacturing areas in Europe. We drew our survey data from
a wide range of industries as varied as heavy manufacturing,
electronics and appliances, medical devices, pharmaceutical
and life sciences, food and beverage, chemicals and
agrisciences, logistics and distribution, transportation,
automotive, aerospace and defense and consumer goods.

While we hear of product recalls almost daily — from food

and beverage to heavy manufacturing, medical devices,
life sciences and electronics industries — our survey
revealed just how troubling the trend is and the real business
impact it has on manufacturers. Yet, while recalls are on
the rise, the survey also revealed some promising trends, such as the growing role of AI, which
will be widely adopted in the next few years; and the empowerment of frontline workers who will
become further embedded into the quality processes, and subsequently, quality outcomes of
manufacturers everywhere.

“The Pulse of Quality in Manufacturing 2024” is the first of what is planned to be an annual survey
to gain a deeper understanding of what is happening on the frontlines, in the corner offices and
across the broad supply chains of manufacturers around the world. Thank you, again, for your time
and interest in the survey results and best of luck in your own quality journey.

Best Regards,

Vick Vaishnavi
CEO
ETQ, part of Hexagon

2 ETQ, part of Hexagon Manufacturing Intelligence

Executive summary

There’s an important shift happening across Our research into the true cost of quality
enterprise manufacturers: in manufacturing posed key questions, such as:

• Quality is becoming more strategic amid rising • What’s driving C-level executives and quality/
product and operational complexity supply chain managers to make quality
a strategic corporate initiative?
• Automation and digitization are
becoming pervasive • What have been their biggest challenges
and how have they worked to resolve them?
• Siloes are being torn down between critical
functions across the enterprise and • What is the impact of product recalls
data-driven visibility is enabling greater and safety incidents?
collaboration and insights
• And what do they plan for the future?
• Frontline workers are becoming part of
the decision-making process
As our survey findings show, despite this
evolution of quality as a business value driver,
product recalls remain high, plant safety
incidents continue to occur and supply chain
problems continue to impact production.
What’s driving this discrepancy?

In this eBook, we’ll use the research findings

to communicate the benefits of treating quality
as a strategic initiative.

ETQ, part of Hexagon Manufacturing Intelligence 3

 Six key takeaways
• Product recalls are on the rise • Frontline workers have a strategic
role in quality decisions
• Suppliers have an impact on
quality • Safety issues have a clear impact
on quality
• Organizations have a false sense
of quality success • It’s not a question of if AI will
be used for quality processes
in manufacturing, but when

4 ETQ, part of Hexagon Manufacturing Intelligence

Introduction
About this report
During the first quarter of 2024, ETQ gathered real-world feedback from the frontlines of manufacturing
enterprises across various industries on the state of quality and the trends, issues and challenges
that impact quality management professionals.

A survey conducted by Censuswide In terms of the size of the company surveyed, the sample
on behalf of ETQ polled: distribution was:

Respondents
Senior-level quality
professionals & enterprise
20,000 - 50,000
manufacturing firms employees 1,000 - 4,999

13%
employees

US 12%
5,000 - 9,999
employees

25%
UK 10,000 - 19,999
employees

50%

Germany

11 verticals

Heavy Chemicals & Manufacturing

manufacturing aggrotech sectors

Food & Aerospace & Pharma &

beverage defense life sciences

Medical
Automotive Transportation
devices

Electronics & Logistics &

appliances distribution

ETQ, part of Hexagon Manufacturing Intelligence 5

Product recalls
Many organizations are experiencing an increasing number of product recalls.
These recalls affect all aspects of an organization and are costly in terms of respondents had
of revenue, brand reputation and customer loyalty. a product recall in the last
five years, and 48% said
ETQ’s survey revealed that 73% of respondents had a product recall there have been more
in the last five years, and 48% said there have been more recalls than recalls than there were
there were five years ago. This data shows that organizations are not fully five years ago.
leveraging the tools and processes available to avoid recalls.

How has the total number of product recalls at your organization changed over the last five years?

More 48%

The same 43%

Less 9%

The financial burden of these product recalls is high. In the UK, 50% of respondents said rectifying the most recent
product recall costs between 8 million and 39.9 million pounds (GBP). In Germany, 41% of respondents said it costs
between 10 million and 49.99 million euros (EUR), while in the US, 39% of respondents said it costs between 10 million
and 49.8 million dollars (USD).

The financial burden of these product recalls is high:

US UK Germany

$ 10 - 49.8 M £ 8 - 39.9 M € 10 - 49.9 M

(USD) (GBP) (EUR)

6 ETQ, part of Hexagon Manufacturing Intelligence

While product recalls’ financial metrics are perhaps the most obvious to measure, recalls impact many other
areas of the business. 35% of respondents said that recalls had an impact on brand reputation, 32% said they
led to delayed product introductions, 34% said they decreased customer satisfaction, 29% said they increased
remediation costs, 30% said they led to plant shutdowns and 26% said they led to layoffs.

Recalls Impact the Business

of respondents said recalls had said recalls led to delayed said recalls decreased
an impact on brand reputation product introductions customer satisfaction

said recalls increased said recalls led to plant said recalls led to layoffs
remediation costs shutdowns and

ETQ, part of Hexagon Manufacturing Intelligence 7

The Critical Impact
of Supplier Quality of respondents

The majority of respondents surveyed (70%) believe their

organizations have control over their suppliers. However, many
claim that up to 
product recalls or product issues that occur are the result of of product recalls can be
defective parts or supplies, a lack of visibility into suppliers or
supply chain disruption. In fact, 61% of respondents claim that up attributed to supplier issues.
to one‑half of product recalls can be attributed to supplier issues.

Thinking of your most recent recalls, how much can you attribute to supplier issues vs internal actions?

<25% 12%

26% - 50% 61%

51% - 75% 21%

>75% 1%

N/A: we have never

5%
had a product recall

Without better supplier oversight, supplier management Because the QMS is a centralized tool, the organization
will continue to be a major contributor to quality issues. and its suppliers can use it to provide real-time updates
However, there are many ways that a QMS can help and share documents and data effectively. A central
organizations gain more control over their suppliers and location for all relevant data improves analysis and
reduce the likelihood of these issues. decision‑making and makes it easy to establish
requirements and share feedback when required.
When choosing new suppliers, organizations can This can help promote continuous improvement among
use the framework of their QMS to identify potential suppliers and further enhance quality standards.
suppliers based on a comprehensive set of factors,
such as compliance history, qualifications and production Finally, the increased oversight and traceability
capacity. Thorough insight into these factors reduces provided by a QMS ensures that organizations can
the risk of complications and issues caused maintain detailed audit trails regarding their purchases
by bad suppliers. and communications with suppliers. This enhances
transparency across the organization and ensures
Once the organization has selected a supplier compliance requirements are met.
to work with, it can track its success by setting out
key performance indicators (KPIs). This helps to set
expectations for factors such as quality, delivery and
communication, which enhances accountability and
helps the organization to identify suppliers’ strengths
and potential areas for improvement.

8 ETQ, part of Hexagon Manufacturing Intelligence

Building Quality and Compliance
into Product Development
A quality management system (QMS) is one of the key tools used by organizations to reduce product recalls.
Some of the key ways that it does this are outlined below:

Promoting process control Product traceability

By implementing Standard Operating Procedures (SOPs) A QMS significantly simplifies recall management by
for manufacturing processes and monitoring them keeping detailed records of each production batch.
continuously, organizations can ensure that workers carry As a result, any defective products can quickly be
out tasks correctly and consistently and that all tasks are identified and recalled with minimal disruption.
fully documented throughout the process. This reduces
product defects and allows organizations to take
corrective actions early if any deviations are identified. Promoting compliance and feedback

A QMS allows organizations to configure workflows

Product inspection and testing to match their internal processes, which sets them up for
compliance and internal audits. It also includes feedback
A QMS requires regular product inspection at each mechanisms designed to collect and analyze customer
stage, from raw material arrival to final product testing. feedback to identify and rectify potential issues.
This allows organizations to quickly identify product
defects and deal with them appropriately before they
spiral into larger issues.

Promoting
process control
By implementing Standard
Operating Procedures (SOPs)

Product inspection and testing

A QMS requires regular product inspection
at each stage, from raw material arrival

Key ways to final product testing

a QMS Product traceability

prevents
A QMS significantly simplifies recall
management by keeping detailed
records of each production batch

recalls
Promoting compliance and feedback
A QMS allows organizations to configure workflows
to match their internal processes, which sets them up
for compliance and internal audits

These features help to ensure that organizations can develop products with quality and compliance in mind
from the very beginning, reducing the likelihood of costly and disruptive product recalls.

ETQ, part of Hexagon Manufacturing Intelligence 9

The Quality Perception Disconnect
While 50% of respondents think their organization is Survey results show that 73% of organizations had
doing a good job at managing quality, leveraging digital a product recall in the past five years, 48% said there
solutions, providing employee training and treating are more product recalls and 48% said they have had
quality as a strategic corporate initiative, the numbers 11‑20 safety incidents in a given year. These figures
may indicate a disconnect between those responses show that manufacturers need to closely examine
and the reality of day-to-day product quality initiatives. their quality processes and find new ways to promote
continuous improvement.

By carrying out regular internal audits to assess

whether these procedures are being followed
appropriately, organizations can quickly
identify potential areas for improvement.
They can also use the QMS to collect and
of organizations had analyze customer feedback to understand
a product recall in their quality expectations and identify potential
the past five years gaps between these expectations and the
organization’s actual performance. If a customer
connects its factory floor workers directly to the
QMS and the data-driven quality eco-system,
many potential quality events can be managed in
near-real time on the shop floor.

A QMS can help organizations establish

measurable quality objectives that allow
said there are more them to understand and meet customer
product recalls expectations. Once these objectives are
understood, organizations can develop standard
operating procedures for key processes, along
with instructions to make sure employees
understand how to meet these objectives.

said they have had

11 -20 safety incidents
in a given year

10 ETQ, part of Hexagon Manufacturing Intelligence

Frontline Workers
Have a Strategic Role
in Quality Decisions
Quality management is no longer the sole domain of manufacturing
managers and quality professionals. The rise of connected devices
in the workplace means that frontline workers are also playing of respondents say that
a strategic role. plant floor workers have
access to electronic devices,
52% of survey respondents say that plant floor workers have access which provide them with
to electronic devices, which provide them with the tools, data and the tools, data and training
training they need to take part in the decision-making process. they need to take part in
the decision‑making process.

How many of your company’s plant floor This increased access to connected electronic
workers have access to electronic devices, devices means frontline workers can get real-time
tools and technologies needed to do their jobs? updates from customers and other team members,
no matter where they are geographically. Having
52%
instantaneous access to customer feedback helps
frontline workers to make informed decisions
and address issues more quickly. They can also
provide more effective customer service that is
based on customer profiles and interaction history.
This increases customer engagement and helps
foster a culture of quality within the organization.
Connected devices also provide workers with
real‑time updates that help them prioritize tasks
33% more effectively and reduce downtime between
tasks. If they run into problems, workers can use
their devices to contact expert support or other
team members remotely. This means they can solve
problems more effectively and improve operational
outcomes. In some cases, predictive analytics can
also foresee potential issues, allowing workers
to take preventative measures before they occur.
15%
Connected workers can set up their devices
to identify and even predict potential quality
issues on the factory floor, as well as apply
machine learning to quality management process
data to monitor quality trends and identify any
correlations of quality data between processes.
0 To improve efficiency further, AI-augmented search
can help connected workers find things faster, while
All of them Most of them Some of them None of them generative AI can provide task optimization support.

ETQ, part of Hexagon Manufacturing Intelligence 11

Safety Issues Remain
a Quality Concern
said they have had
The data demonstrates that safety incidents still occur at an alarming rate. 11‑20 safety incidents
Despite greater visibility and safety awareness, 46% of respondents say in a given year
they have 11 to 20 safety incidents in an average year.

How many safety issues, if any occur across your organization in an average year?

None 5%

1 - 10 32%

11 - 20 46%

21 - 30 17%

More than 30,

0
please specify

If they are not addressed, safety issues can wreak havoc could compromise their safety. Manufacturing has
across an organization. The longer these issues remain, changed drastically in just a few years: as of 2023,
the worse they can get. Unaddressed issues may lead the average tenure within the manufacturing workforce
to increased regulatory scrutiny, which requires additional is only three years, and 50% of new employees leave
testing, more rigorous quality control measures, or even manufacturing roles within the first 90 days. As a result
product recalls and redesigns. of this, many manufacturing organizations rely heavily on
temporary or contract workers to address staffing gaps.
This can lead to severe delays across the organization
and can also cause lasting repercussions for a brand’s Unfortunately, this has had widespread ramifications
reputation due to damaged customer trust and negative across the industry, and 84% of manufacturers report
media coverage. This typically results in stunted revenue that they have witnessed a loss of experienced personnel,
growth and lowered employee morale. negatively impacting quality, efficiency and productivity.
However, managers typically do not want to invest time
Many factors are driving this increase in safety issues in training these temporary workers, which can further
across organizations. Many organizations are drawn in increase the risk of safety issues and accidents.
by the increased efficiency and productivity benefits
of increased automation. However, market demand and
financial pressures mean that many organizations provide
workers with limited training when it comes to using these
machines. To further save money and meet deadlines,
many organizations also provide minimal equipment
maintenance, and take shortcuts in safety protocols. of manufacturers report that they have witnessed
a loss of experienced personnel, negatively
Working long hours in high-stress environments impacting quality, efficiency and productivity
means workers are more likely to make mistakes that

To reduce the impact of safety issues, organizations can utilize connected frontline worker technology to connect
with SMEs in real time to help solve quality problems swiftly. Additionally, AI-based workforce intelligence can help
hiring managers more clearly define exactly what they should be hiring for to address skills gaps. Finally, organizations
may provide workers with more specialized training based on their role and skill level to enhance their performance
within the workplace.

12 ETQ, part of Hexagon Manufacturing Intelligence

 AI in Quality:
Not but
Ninety-nine percent of respondents said they are using or plan to use AI for key
quality applications, such as document processing, automating core processes,
predicting future trends or spotting defects on the factory floor. 47% of
respondents say they plan to use AI in the next two years.

There are many benefits of using AI to enhance manufacturing quality processes.

AI can monitor production processes in real-time and perform inspections much
more quickly and accurately than human workers can. That means they can
identify and address potential deviations as soon as they occur, which improves
quality consistency across the organization and reduces the likelihood of costly
product recalls.

Which of the following best describes your organization with regards

to using or planning on investing in AI for manufacturing?

Planning on using in
47%
the next two years

Already using 33%

Planning on using but

not until two years 20%
of respondents say
or more from now
they plan to use AI
Never planning
1%
on using
in the next two years

AI tools can analyze machinery and equipment data Maintaining AI technology and ensuring it is secure and
to determine when maintenance is needed and compliant can present unique challenges. Creating
schedule it at the most appropriate times. This prevents and maintaining these models and ensuring that they
disruptions in production and helps maintain product are running as expected requires a specialized set of
quality across the organization. skills. Employing workers who have these skills can
be difficult and expensive. Many AI systems are also
Managers can also leverage AI’s ability to process vast subject to novel security vulnerabilities, which makes
amounts of data quickly and effectively to quickly them prime targets for cybercriminals. Data breaches
identify inefficiencies within the organization and make can be costly, disrupt operations and leave lasting
informed decisions to improve quality and productivity. repetitional damage.
This helps to optimize resources and reduce waste.
The tools can also free up time and improve worker The potential for AI in manufacturing and quality
productivity by automating repetitive tasks. is enormous, though the market is in a “show me”
stage as customers work out real-world use cases for
Despite these benefits, integrating AI into quality the technology. As we move past the “shiny object”
operations also introduces a new set of challenges for phase of technological infatuation, manufacturers
organizations. The initial costs required to implement need to lay the foundation today to operationalize AI,
these systems are high, and the ongoing costs required govern its safe use and ensure it plays a supporting role
to maintain these systems and train workers to use them while ensuring a measurable and predictable business
correctly and integrate data correctly can also quickly impact of the new tools. Taking a logical and pragmatic
add up. Some workers may also be reluctant to use approach to integrating AI into quality workflows
AI technology, fearing that the learning curve will be too is a smart approach and ensures that humans keep
high or that machines will replace their role completely. a steady hand on the steering wheel.

ETQ, part of Hexagon Manufacturing Intelligence 13

Conclusion
Based on the results of the 2024 survey, quality is clearly improvement and workforce development. At the same
on the rise as a strategic business concern. The cost time, we see a potential discrepancy between what
of poor quality is felt deeply in most organizations — quality professionals perceive to be the positive state of
from significant negative financial impact to brand their quality organizations and the evident rise in product
damage and staff layoffs. In this regard, respondents recalls in each geography surveyed. And, finally, AI is on
told us that supplier quality is critical to achieve optimal the horizon and quality professionals seem to be working
final product quality and that a connected frontline through the best and most pragmatic applications now,
workforce plays an important role in continuous while keeping an eye toward AI’s potential.

Survey Methodology
“The Pulse of Quality in Manufacturing 2024” was While the survey canvassed both mid-market
conducted online for ETQ by research firm Censuswide, ($100M - $500M) and enterprise‑level organizations
between February and March of 2024. More than (above $500M), the sample was weighted more heavily
750 senior-level quality professionals and related project toward larger, global manufacturers.
managers were polled at manufacturing firms across
the U.S., The U.K. and Germany.

More than 750 senior-level quality While the survey canvassed both mid-market ($100M – $500M)
professionals and related project managers and enterprise-level organizations (above $500M), the sample
were polled at manufacturing firms across was weighted more heavily toward larger, global manufacturers.
the U.S., The U.K. and Germany.

14 ETQ, part of Hexagon Manufacturing Intelligence

ETQ Reliance
ETQ Reliance® is a leading Quality Management Software (QMS) designed to empower organizations
with comprehensive quality and safety management capabilities. ETQ Reliance leverages over
30 years of experience in the industry to deliver a robust and scalable cloud-native platform. This
next-generation QMS is specifically engineered to meet the dynamic needs of businesses. It ensures
compliance, enhances operational efficiency and fosters a culture of continuous improvement.

Key features of ETQ Reliance include

Agile Cloud-native
platform SaaS
Built for flexibility Ensures high performance,
and scalability, allowing security and accessibility
businesses to adapt from any location,
to changing conditions supporting remote and
and expand as needed. mobile workforces.

Core Advanced
applications analytics
This area covers essential Provides actionable insights
quality processes such as through powerful data
document control, training analytics tools, facilitating
management, audits, informed decision-making
change management and and risk management.
corrective actions.

ETQ Reliance supports organizations in Learn more about

their digital transformation journey, enabling Advanced Quality Management
them to maintain high standards of quality
and compliance across their operations.
at
[Link]

ETQ, part of Hexagon Manufacturing Intelligence 15

ETQ, part of Hexagon, is a global leader in integrated
quality management, health, safety, and environmental
solutions for manufacturers. Learn more at [Link].

Hexagon is a global leader in digital reality solutions.

Learn more about Hexagon (Nasdaq Stockholm: HEXA B)
at [Link] and follow us @HexagonAB.

© 2024 Hexagon AB and/or its subsidiaries and affiliates. All rights reserved.