Outlook Is Positive for Quality Management

Three developments to pay attention to this year

Published: Tuesday, February 9, 2016 - 18:11

It’s  shaping up to be an interesting year. The U.S. presidential campaign looks to be outrageous and entertaining, stocks started the year with a nasty hangover, and ranchers turned militant in Oregon. Although the outlook for quality management isn’t quite as exciting, there are a number of interesting—and positive—new developments we should keep an eye on in 2016. Here are three.

Rapid adoption of quality-centered IIoT pilot projects

LNS Research has been covering the industrial Internet of Things (IIoT) for more than six quarters and has identified a clear shift in industry's interest in IIoT. The chart compares recent feedback from 1733 respondents during the last six quarters. It depicts a rapid swing from a disinterested majority in Q3 2014—58 percent either didn’t know about IoT or weren’t planning to invest, to a motivated majority in Q4 2015 with 68 percent planning to invest or considering investment. A separate LNS survey identified quality improvement as the fourth most frequently identified top-use case for companies looking to adopt IIoT (23 percent of 252 respondents).

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The industry is excited about the potential for IIoT, and quality and reliability improvements are some of the core use cases. However, while some organizations are making large investments in IIoT, most are deploying IIoT pilots. So although there’s a possibility of an explosion of IIoT investment in quality projects at the start of 2016, the more likely scenario is a large raft of smaller projects over the next 12 to 18 months as the early majority dips its toe into the IIoT water. Reinvestment in larger IIoT projects upon successful pilots will result in more sizable investments later in the cycle. Looking for more education on the connection between IIoT and quality? Start with these papers:
• “The Industrial Internet of Things and Big Data Analytics: A Coming Manufacturing Revolution”
• “Leveraging the Internet of Things to Improve Product Quality: What You Need to Know”

Risk management gets the spotlight

Formalized risk management is another big shift coming center stage to quality management. Although risk management has been getting much-needed incremental attention for years, the arrival of ISO 9001:2015 has really forced the planning for enterprise adoption of a formal risk management process. Companies are beginning to take the hard journey from flexible and often ad hoc risk analysis to enterprise-connected risk management.

This particular journey will likely be faced with user adoption challenges, since users are conditioned to the ease of use and informality of spreadsheets. However, industry is beginning to kick aside the crutch of spreadsheets as they search for a solution to lifecycle-wide risk-based thinking.

Why 2016? LNS Research identified a sharp jump in plans to adopt formal and standards-based risk management processes, as well as a simultaneous shift in the percentage of companies moving risk management from a bucket of “least critical” quality processes to “most critical.” Again, during the next 12 to 18 months, we expect a significant increase in quality-centered enterprise risk management pilots.

Increasing EQMS adoption, but not on premise

Enterprise quality management system (EQMS) adoption, planning, and budgets have steadily increased during the last several years. However, 2016 stands out as having the largest single-year increase in EQMS budgeting, with a jump in companies that allocated budgets for EQMS.

Although this indicates a banner year for EQMS deployments, another interesting data point is the growing interest in the SaaS models, both single and multitenant. In fact, mind share of on-premise EQMS declined somewhat.

Our discussions with EQMS vendors and quality leaders bear this out. The low effort and low up-front cost of SaaS offerings combined with their security and growing capabilities are beginning to tip the scales for new buyers of all sizes, as well as some buyers with existing deployments. We expect to see this trend continue to accelerate during the coming years for most industries. Of course, some industries, such as government and defense with their strict data security regulations (ITAR), typically find an internal cloud offering a more desirable approach and would likely not move to a public, SaaS/cloud offering.

Rosy outlook for 2016

Quality management as a whole is poised to make some substantial improvements in 2016, both with improved process support as well as laying the groundwork for future broad-based IIoT deployments. Contrary to the news stories of the day, quality management’s outlook looks positively sunny. May this year bring you success.

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About The Author

Dan Jacob

Dan Jacob is a research analyst at LNS Research primarily focused on the enterprise quality management systems (EQMS) practice. Jacob has more than 20 years of experience in quality, reliability, risk, and safety across several industries, primarily automotive, aerospace and defense, high tech and electronics, and medical devices. Jacob also operated his own firm providing engineering consulting to the medical devices and metals industries. Jacob graduated Magna Cum Laude from the University of Pittsburgh with a bachelor’s degree in mechanical engineering.