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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

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.

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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.

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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.

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