Quality 4.0 Creates Substantial Value for Manufacturers, but They Must Overcome a Diverse Set of Challenges

Although Participants in a Global Survey Recognize Quality 4.0's Importance at All Stages of the Value Chain, Few Have Defined a Detailed Strategy or Launched an Implementation Program

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Boston Consulting Group (BCG)

Aug 20, 2019, 00:01 ET

BOSTON, Aug. 20, 2019 /PRNewswire/ -- Nearly two-thirds of manufacturers believe that Quality 4.0—the application of Industry 4.0's advanced digital technologies to enhance quality management—will significantly affect their operation within five years. The benefits of this approach include reductions in defect rates and in costs related to poor quality. Nevertheless, a scant 16% say that their company has begun implementing Quality 4.0. Only 20% say that their company has started to plan for implementation, and 63% have not even reached the planning stage yet. European companies are off to a faster start: 21% have started to adopt, compared with only 6% of US companies.

These findings, from a recent global survey conducted by Boston Consulting Group (BCG) in collaboration with ASQ and German Association for Quality (DGQ), are discussed in a report titled Quality 4.0 Takes More Than Technology. The report is being released today.

The survey sought to evaluate participants' views on Quality 4.0 as it exists today and as it will exist in 2024, to understand the most important use cases, and to identify major challenges and skills needed to implement a transformation. It was conducted as part of a broader study that included interviews with numerous experts to gain insight into industry benchmarks, the impact of use cases, and best practices.

The study found that technology is only one piece in a broader quality transformation that must also focus on people and skills. "Survey participants identified a shortage of skills as the main impediment to adoption," said David Ryeson, a BCG partner and coauthor of the report. "Notably, participants regard soft skills—such as change management, communication, and teaming—as the most critical skills for success, even as they acknowledge the need to improve their analytics and big data skills."

"Taken together, the findings point to the need for companies to take a multifaceted approach to Quality 4.0 adoption that addresses the full range of strategic, cultural, and technological issues," said Bill Brody, a market research manager at ASQ.

"Companies that master the challenges will be rewarded not only with lower defect and failure rates but also with competitive advantage in the form of higher customer satisfaction and improved operational efficiency," said Benedikt Sommerhoff, an innovation manager at DGQ.

The survey's findings revealed a diverse set of opportunities and challenges:

Survey participants acknowledge the importance of Quality 4.0 at all stages of the value chain but see manufacturing and R&D as the areas that will benefit most. They also understand the opportunity to capture quality-related improvements in value chain steps that have traditionally been seen as lying outside the scope of the quality function, such as logistics and sales.
Participants point to predictive analytics, sensors and tracking, and electronic feedback loops as the most important technologies for driving impact. For example, more than 60% say that predictive analytics will significantly affect quality performance and the bottom line within five years, compared with only 16% who cite a significant impact today.
Survey responses to skills-related questions reveal widespread unreadiness for implementation. Only one-third of participants say that they understand how digitization will change quality management roles and skills, and even fewer believe that their company has the right people in place to run a Quality 4.0 initiative (17%) or has a clear strategy for attracting Quality 4.0 talent (5%).
Many organizations lack the basic prerequisites of a quality-focused culture. Although 57% of participants say that quality initiatives are part of their executive-level strategy, only 27% strongly believe that their company has clearly articulated its quality goals and objectives to all layers of the organization. Only 14% of participants believe that individuals across the organization understand their roles in achieving quality goals.
Both frontrunners (companies that have started to implement Quality 4.0) and followers (all others) cite a shortage of digital skills and talent as the number one challenge they face. For frontrunners, the next three most important challenges involve technology and data. In contrast, followers point to strategic and cultural challenges. These differences in appraisal suggest that technology- and data-related challenges become more visible to companies as they proceed with implementation. Meanwhile, roadblocks related to strategy and culture discourage followers from even pursuing implementation—a reflection of the importance of establishing a strategic roadmap and a quality-centered culture as enablers of technological transformation.

A copy of the report can be downloaded here.

To arrange an interview with one of the authors, please contact Eric Gregoire
at +1 617 850 3783 or [email protected].

About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we help clients with total transformation—inspiring complex change, enabling organizations to grow, building competitive advantage, and driving bottom-line impact.

To succeed, organizations must blend digital and human capabilities. Our diverse, global teams bring deep industry and functional expertise and a range of perspectives to spark change. BCG delivers solutions through leading-edge management consulting along with technology and design, corporate and digital ventures—and business purpose. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, generating results that allow our clients to thrive.

About ASQ
ASQ is the leading membership association to help quality professionals achieve their career goals and drive excellence through quality in their organizations and industries.

ASQ provides expertise, knowledge, networks and solutions to a global membership of individuals and organizations spanning more than 140 countries. ASQ was founded in 1946 and is headquartered in Milwaukee, Wis., USA.

About DGQ
The DGQ (German Association for Quality) is the national, centralised society for quality in Germany and the first port of call for quality, quality management, and quality assurance. The umbrella organisation is a registered association comprising a unique network of more than 6,000 quality experts in more than 4,000 companies of all sizes and industries. Young professionals, experts, and managers connect, reflect, and share experiences in more than 70 regional and expert circles as well as networking events throughout Germany.

The DGQ network offers the most versatile and comprehensive platform for sharing knowledge, practical experience, and trends on quality-related topics in Germany. The DGQ is engaged in national and international initiatives, partnerships, and committees developing and accelerating key standards as well as innovation and research projects. With around 300 trainers and 1,000 practice-related training courses, the DGQ offers a wide range of trainings and awards individuals with internationally recognized certificates. It contributes effectively to anchoring "Quality made in Germany" as a principle of success in business and society. In a world of transformation, it also develops new quality approaches for the future.

Boston Consulting Group
Eric Gregoire
Global Media Relations Senior Manager

Tel +1 617 850 3783
[email protected]

SOURCE Boston Consulting Group (BCG)