The Beginning of Quality Management’s Digital Transformation

Expect a growing swell of IIoT pilot investments intended to improve quality

Published: Monday, March 6, 2017 - 13:02

This time last year, we identified what we felt were the three most important developing trends in quality management. We identified that these were the industrial internet of things (IIoT), pilots focused on quality improvements, increased adoption of risk management automation, and substantial growth in cloud-based EQMS adoption.

Fortunately, 2016 was an exciting year to make predictions. On top of several new technologies that have been changing the face of quality management, there were important updates to core quality standards (ISO 9001:2015 and IATF 16949:2016), all of which stand to shake things up quite a bit over the coming years.

So, how did we do? Read the original predictions and rationale here.

Rapid adoption of quality-centered IIoT pilot projects

Last year, LNS survey data had shown a clear shift in the market’s perspective about the IIoT. During the 18 months leading into 2016, much of the market had moved from being unaware of the IIoT to investigating it and beginning investment. Most important for quality professionals, quality improvement was a leading use case. This indicated that we should expect a growing swell of IIoT pilot investments intended to improve quality as companies tested the waters with this new technology.

This prediction was born out during the year. We spoke with many companies that invested in IIoT pilots, including several notable successes that improved supplier, shop-floor, or in-service quality through predictive analytics and cloud-based collaboration.

In fact, this trend is continuing to accelerate, as can be seen in the chart below. LNS has now surveyed 2,801 respondents about their IIoT plans, and during the past three years the portion of the market that is investing has almost doubled, awareness has substantially increased, and those who don’t see the value in investing are diminishing.

Takeaways for quality leaders No. 1
Find the IIoT initiative at your organization, or consider championing one. The IIoT is real and important to quality. Help improve the success of these initiatives by leveraging the latest LNS research, for instance, the LNS Supplier Quality Management (SQM) research that provides IIoT use cases and success stories.

Increased adoption of formal risk management

LNS statistics had also demonstrated a sharp increase in plans to automate risk management with software. The inflection point occurred in 2015, indicating that risk management automation would increase significantly in 2016. As a side note, the current statistics still suggest that the market would like to double risk management automation during the next 12 months.

Did we see a huge uptick in risk management automation in 2016? Yes: 20-percent more of the 2016 respondents reported automating risk management with software as compared to years past, which is a pretty big increase (although far short of doubling). This indicates that the market has identified a need for risk management automation, but 80 percent of the market was unsuccessful in positioning it successfully with management.

Takeaways for quality leaders No. 2
Clearly, quality leaders had more modest success deploying risk management automation vs. quality-centric IIoT projects. Why? In many cases, companies see IIoT as transformative and important to strategic objectives. Risk management isn’t often seen in the same light. Improve business-case success by referring to LNS’s Executive Business Case research for strategies, approaches, and data. We were engaged in business case development discussions with many companies in 2016 and found success applying this research.

Increased EQMS adoption, primarily in the cloud

This prediction was timely and right on the nose. The EQMS adoption rate did indeed increase in 2016, and EQMS in the cloud far outstripped the growth of EQMS adoptions as a whole, dramatically increasing over 2015. The cloud proved to be the EQMS star of the year, easing the transition from paper to automated software for those deploying EQMS for the first time.

The vendor community reported substantial growth in cloud EQMS adoption, with many vendors reporting that roughly half of new deployments selected cloud vs. on-premise solutions. This was a jump from 2015, in some cases quintupling cloud adoption rates. Also, as predicted, this did not affect the defense industry, which has its own unique data security considerations.

LNS data show that this trend will continue. Currently, 72 percent of 2016 respondents indicate that they have deployed EQMS on premise, while 59 percent planned to either initially deploy on the cloud or move to the cloud.

Takeaways for quality leaders No. 3
The cloud isn’t for everyone but does have benefits for many, which may include simpler validation, continuous software updates, improved global performance, or just plain reduced hassle. It’s a viable option that should be considered for first-timers as well as those with existing installs. Some vendors have very mature and scalable cloud offerings, while others have done little more than host on-premise solutions. Dig a little deeper to make sure you get what you want.

First published Jan. 31, 2017, on the LNS Research blog.

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.