Global Quality in Manufacturing Survey from ETQ Reveals Dramatic Rise in Product Recalls

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Aug 01, 2024, 08:30 ET

"The Pulse of Quality in Manufacturing 2024" Also Reveals Overwhelming Plans for AI Adoption and the Changing Role of Frontline Workers

BURLINGTON, Mass., Aug. 1, 2024 /PRNewswire/ -- ETQ, part of Hexagon, shared results of its global survey, The Pulse of Quality in Manufacturing 2024. The survey found that the vast majority of respondents (73%) have had a product recall in the past five years, with financial costs reaching $99.9M in the U.S. alone for each recall. Respondents also cited additional negative consequences of product recalls, including damage to brand reputation, delayed product introductions, plant shutdowns and personnel lay-offs.

The Pulse of Quality in Manufacturing 2024 survey was conducted on behalf of ETQ by research firm Censuswide. More than 750 quality leaders and related project managers at manufacturing firms across the U.S., the U.K. and Germany were asked about the quality trends, initiatives and current status of quality in their enterprise organizations.

In addition to the rise in product recalls, a more promising trend revealed in the survey is the overwhelming plans for AI adoption, with 47% of respondents planning to use AI in the next two years (and 33% already using it). The survey also indicated a growing role for frontline workers in the manufacturing decision-making process.

"We're pleased to share results of our annual survey that gets to the heart of what's happening on the frontlines, corner offices and supply chains of manufacturers across the globe," said Vick Vaishnavi, CEO, ETQ. "While we hear of product recalls almost daily – from food and beverage manufacturers to heavy industry, medical devices, life sciences and electronics enterprises – our survey revealed just how troubling the trend is and the real impact on manufacturers."

Below are key findings from The Pulse of Quality in Manufacturing 2024:

Product Recalls are on the Rise
Seventy-three percent of respondents stated that they had a product recall in the last five years and 48% said they have experienced more recalls than they did five years ago. Thirty-nine percent of respondents said that the cost to rectify one recall ranged from $10M to $49.99M.

Respondents indicated the following impacts of product recalls:

Brand reputation (35%)
Delayed product introductions (32%)
Weakened customer satisfaction (34%)
Plant shutdowns (30%)
Corporate layoffs (26%)

AI Will Play a Greater Role in Manufacturing Operations
Forty-seven percent of respondents say they plan to use AI in the next two years. All but one percent of respondents said they are using or plan to use AI for the following quality applications:

Document processing (46%)
Automating core processes (33%)
Predicting future trends (39%)
Spotting defects on the factory floor (38%)

Frontline Workers Play a Strategic Role in Quality Decisions
The majority (85%) of respondents said that "most" or "all" plant floor workers have access to electronic devices; and 80 percent said "most" or "all" functions have access to relevant quality data.

Suppliers Have an Impact on Quality
Sixty-one percent of respondents claim that up to one-half of product recalls can be attributed to supplier issues. Despite this number, 70% believe their organization has control over suppliers.

Safety Issues Remain
Forty-eight percent of respondents said they have 11-to-20 safety incidents in an average year. Yet, the majority of respondents (71%) also said they have "good" or "best-in-class" worker training.

Manufacturers believe they have a strategic approach to quality.
Fifty percent of respondents felt that their organization is doing a good job at managing quality initiatives; and the majority (60%) believe their cost of quality is "low."

"While there seems to be some level of discrepancy in the perceived level of quality and actual quality issues, manufacturers are committed to taking a strategic approach to quality, leveraging new tools, technologies and processes, as well as their most important asset, their employees, to meet and exceed their quality goals now and into the future," added Vaishnavi.

About the Survey Methodology
Industries represented in the survey include firms in heavy manufacturing, electronics and appliances, medical device, pharma and life sciences, food & beverage, chemicals and agritech, logistics & distribution, transportation, automotive, aerospace & defense and manufacturing sectors. While the survey polled both mid-market ($100M – $500M) and enterprise-level organizations (above $500M), the sample was weighted more heavily to larger, global manufacturers.

About ETQ
ETQ, part of Hexagon, is a leading provider of integrated quality management, health, safety, and environmental solutions for manufacturers. Firms around the world rely on ETQ to ensure optimal quality at scale, reduce costs and improve the velocity of data-driven decisions. Learn more at etq.com.

Hexagon is a global leader in digital reality solutions, combining sensor, software and autonomous technologies. Hexagon (Nasdaq Stockholm: HEXA B) has approximately 24,000 employees in 50 countries and net sales of approximately 5.2bn EUR. Learn more at hexagon.com and follow us @HexagonAB.

Click here to download your copy of the report: "Taking the Pulse of Quality in Manufacturing 2024."

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SOURCE ETQ