GOALS DRIVING QUALITY 4.0

24%

23%

22%

27%

20%

20%

18%

18%

17%

Service execution

Product attribute/ requirement tradeoffs

Product safety

Environmental impact

Service planning

Manufacturing asset performance management

Physical testing(product verification and validation)

Virtual testing (product verification and validation)

Supplier selection

15%Management review

44%

37%

36%

34%

38%

31%

31%

29%

28%

27%

Employee recruiting, engagement, retention

New product requirements, critical parameters

Supplier management

Cost/effectiveness of quality monitoring

Product use cases

Employee efficiency or safety

Risk analysis/ risk management

Product quality

Product Planning

Manufacturing operations

27%Logistics

COST OF QUALITY IN CONTEXT OF CAPABILITIES MATURITY

PASS FAIL

Quality Check

QUALITY INSPECTION

99.782% 0.271%

QUALITY 4.0 USE CASE NAVIGATOR

Connected Worker

3 COMPANIES, 3 PATHS TO PREDICTIVE QUALITY

20%

15%

10%

5%

0%L1 - Ad Hoc L2 - Controlled L3 - Harmonized L4 - Agile L5 - Innovation Leader

Capabilities Maturity

Cost

of Q

ualit

y as

% o

f Rev

enue

Cost of poor quality (CoPQ)

Cost of good quality (CoGQ)

Total cost of quality (TCoQ)

QUALITY 4.0: Critical to Industrial Transformation (IX) Success

QUALITY PROBLEMS HAVE REMAINED FUNDAMENTALLY UNCHANGED for decades. Siloed quality organizations, ineffective technology, and weak data consistently stifle improvement efforts.

A COMPANY’S INDUSTRIAL TRANSFORMATION INITIATIVE HOLDS THE KEY TO UNLOCK QUALITY PERFORMANCE.

QUALITY is the LOW HANGING FRUIT of Industrial Transformation (IX). Early adopters of IX have demonstrated that industrial organizations must prioritize quality, engage quality teams in transformation initiatives, and focus throughout the value chain.

QUALITY 4.0 might be a standalone initiative, but most of the time it OVERLAYS OTHER DIGITAL TRANSFORMATION INITIATIVES across the value chain.

THE VALUE IS REAL: IMPROVING QUALITY MATURITY CAN REDUCE CoQ BY 5% OF TOTAL REVENUE.

LEARN FROM INNOVATORS

Innovators have addressed Quality 4.0 across 33 potential use cases in six categories across the value chain. Manufacturers should prioritize use cases by quantifying the value, and understanding implementation effort and impact on business objectives. There’s no silver bullet: each company should focus on those use cases that drive improvement in its specific industry and organization.

Leaders have demonstrated that engaging widely across the use cases can drive significant quality, manufacturing, and new product introduction improvement.

STRATEGIES TO LEVERAGE THE OPPORTUNITY: PREDICTIVE QUALITY AS AN EXAMPLE.

Many companies use “sampling plans” to inspect quality – they randomly select pieces to inspect in each lot. Sampling plans take place in-process at defined checkpoints and at final assembly. It’s an accepted good practice in most industries, since 100% inspection is expensive and time consuming.

INNOVATIVE MANUFACTURERS APPLY ANALYTICS to data from connected equipment, in-line and off-line quality inspections, and product – they PHYSICALLY AND VIRTUALLY INSPECT 100% OF PRODUCT and at many more points throughout the manufacturing process.

THE FUTURE IS TODAY: TRANSFORM QUALITY THROUGH INDUSTRIAL TRANSFORMATION INITIATIVE.

QUALITY 4.0 IS NOT A STANDALONE INITIATIVE, but it does permeate and overlay the value chain. Take inspiration from innovators and LOOK TO THE SIX CATEGORIES OF QUALITY 4.0 USE CASES TO KNOCK DOWN SILOS and improve performance. Ultimately, strive to lead the company to include quality across all initiatives to achieve results unlike any with traditional quality approaches.

Only 9% of level 1 maturity companies

know their“cost ofquality” (CoQ), while 32% of level

5 maturity companies know the CoQ

Most companies lack up-to-date

corporate-wide CoQdrill-down insights with

underlying drivers

Going from level 1 to level 5 translates to

reducing CoQ by 5%, or roughly one-third

Even traditional technology applied to

quality can unlock significant value

Connected Supply Chain

ConnectedOperations

Connected Worker

Robotic ProcessAutomation

Digital Voice of the Customer

Connected Product

RELATED INITIATIVES(Industry 4.0, autonomous

assets, others)

RELATED TECHNOLOGIES(analytics, ERP, PLM, others)

PHARMA COMPANY

• New chief digital officer (CDO) role

• Launched factory of the future initiative

• Quality as #1 use case of the initiative

CONSUMER DURABLE GOODS MAKER

• Correlate operational, warranty, and online marketplace data

• Identify in-process variables that improve outcomes for customers, lower warranty costs, increase marketplace ratings

ELECTRONICS MANUFACTURER

• Assess efficacy of screening procedures

• Eliminate any that don’t impact quality

• Improve by focusing only on select variables

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37%

24%

23%

22%

16%

16%

16%

15%

Disparate quality systems and data sources

Quality metrics not measured effectively

Quality is “department” not a “responsibility”

No formal process to manage risk

Lack of visibility into supplier quality

No formal process for continuous improvement

Ad hoc audit and compliance management

No formal process to capture non-conformance

Lack of executive support

Engineering lacks feedback on quality

37%

36%

37%

37%

35%

CHALLENGES TO ACHIEVING QUALITY OBJECTIVES (n =1882)

2016 2017

18%

16%

17%

14%

10%

20%

8%