2025 Pulse of Quality in Manufacturing

How manufacturers are navigating labor shortages,

AI adoption and quality challenges
Introduction
About this report
In early 2025, ETQ conducted its second annual Pulse of Quality in Manufacturing survey, gathering insights from
more than 750 senior quality, safety, operations and compliance professionals across the U.S., U.K. and Germany.
These respondents oversee quality, compliance, digital transformation, regulatory affairs and supply chain
management across industries such as electronics and appliances, heavy manufacturing, medical devices,
pharmaceuticals and life sciences, automotive, general manufacturing and food and beverage.

This report provides an in-depth analysis of the challenges manufacturers face — labor shortages
and the workforce skills gap, product recalls and safety issues — alongside trends such as
AI adoption and increased investment in quality tools, technologies and people.

A survey conducted by Censuswide on behalf of ETQ polled:

Respondents
US (400)

Germany (175)
Senior-level quality
professionals & enterprise UK (175)
manufacturing firms

In terms of the size of the company surveyed,

the sample distribution was:

10,001 - 20,000
employees

20,001 - 50,000
employees

5,001 - 10,000
employees 50,001+
employees
1,000 - 5,000
employees

2 ETQ, part of Hexagon Manufacturing Intelligence

Executive summary
The manufacturing industry is undergoing a significant shift, with quality playing
an increasingly strategic role. Key insights from the 2025 Pulse of Quality
in Manufacturing survey include:

• Labor shortages continue to impact quality, affecting production efficiency

and product integrity.

• Product recalls are rising despite manufacturers’ efforts to improve

quality management.

• AI adoption is accelerating as manufacturers seek automation to enhance

efficiency and accuracy.

• Investment in quality is expected to rise as quality becomes a more important

business driver.

• Safety concerns remain prevalent, highlighting the need for stronger

compliance measures and technology‑driven solutions.

This report provides actionable insights into how manufacturers can leverage
technology, workforce strategies and data‑driven approaches to enhance quality
management in 2025 and beyond.
 Key takeaways from
the 2025 pulse of quality
in manufacturing survey
The labor shortage continues to impact quality
With the current global economic uncertainty sure to impact supply chains, labor force dynamics and
a sudden need to more deeply consider where companies establish their manufacturing locations,
companies are faced with new challenges in today’s environment. As a result, the workforce shortage
and skills gap, which are widespread issues in the manufacturing industry now, are set to become
even more problematic in the future.

Survey insights Does this workforce shortage and skills gap have
an impact on product or service quality?

Seventy percent of manufacturers

report that labor shortages are
affecting their companies, and 88% say
the shortage has negatively impacted
product quality.

This highlights the urgent need for Yes

businesses to explore solutions to
address the workforce shortage and
skills gap to mitigate its effects.
No

4 ETQ, part of Hexagon Manufacturing Intelligence

 The financial and reputational
cost of recalls
What’s driving the manufacturing labor shortage?
A variety of factors are driving the workforce shortage and teams have seamless access to quality data and workflows,
skills gap. The aging workforce and skills shortages have they can make real-time informed decisions. This reduces
created a gap in experienced talent, making it difficult errors and accelerates continuous improvement, helping
for businesses to find skilled workers. them maintain quality standards across the organization.

Meanwhile, rapid advances in technology have outpaced This also frees up human workers to focus on other
the supply of workers with the required skills to perform important tasks that rely on skills that are more difficult
tasks. Similarly, a younger, digitally native workforce that to automate, such as creativity and strategic thinking.
has grown up with easy access to portable devices and
screens of all sorts, is less likely to enter an industry that Businesses can streamline workflows and automate
may be seen as less than cutting edge, technology‑wise. repetitive tasks using digital tools. Flexible online platforms
This has put more pressure on businesses to offer more foster collaboration, improving communication and
extensive training and development programs to employees. decision-making across teams.

Increasingly, businesses are relying on connected Companies investing in digitizing worker experiences often
worker technologies to help fill workforce gaps and scale see enhanced quality outcomes due to higher employee
operations without requiring a significant increase in staff. engagement, increased productivity and greater job
Strong connections between workers, processes and satisfaction overall.
quality systems drive operational excellence. When frontline

The percentage of older workers employed has grown

Age 16 and over

Age 65 and over

Men, age 65 and over

Women, age 65 and over

Age 65 - 69

Age 70 - 74

Age 75 and over

Is your firm impacted by the current workforce skill shortage/skills gap?

Yes

No

ETQ, part of Hexagon Manufacturing Intelligence 5

 Product recalls are increasing
despite quality efforts
Despite manufacturers’ ongoing efforts to improve quality control, product recalls have been on the rise, raising concerns
and costs among manufacturers, businesses and customers.

Survey insights Did your organization experience a product recall

in the last 5 years?

Product recalls are still steadily climbing.

Seventy‑five percent of manufacturers have
experienced a product recall in the past five
Yes
years, according to the ETQ 2025 Pulse of Quality
in Manufacturing survey, a slight increase from
73% in 2024.
No
The cost of these recalls is significant, with
Not
48% of manufacturers reporting that rectifying sure
recalls costs between $10M and $49.99M. Supply
chain performance appears to play an important
role in these issues, with 47% of manufacturers
attributing these recalls to supply chain issues. of manufacturers
reporting that
This highlights the critical need for stronger
rectifying recalls
supply chain oversight and more stringent quality
management measures to help businesses catch costs between
potential issues as early as possible before
they escalate into recalls that hurt the bottom line and
and imperil brand reputation.

Thinking of your most recent recalls, how much can you attribute to supplier issues vs. internal actions?

Internal action

Suppliers issues

Other

6 ETQ, part of Hexagon Manufacturing Intelligence

The direct financial impact of these recalls is just the tip As a result, businesses are under increasing pressure
of the iceberg: they can also have significant long-term to strengthen their quality control processes to reduce
reputational costs for manufacturers. Product recalls can the risk of recalls. One key way to do this is to implement
erode customer trust, reducing long-term profitability and a robust Quality Management System (QMS) within
brand value. They can also increase operational costs, the business, as companies with a QMS report fewer
create legal liabilities and potentially damage relationships recall incidents.
with suppliers and distributors.

What was the cost to rectify the most recent product recall?

US UK Germany

$ 10 - 49.99 M £ 4 - 7.99 M € 10 - 49.99 M

(USD) (GBP) (EUR)

What has been the biggest impact of poor quality to your organization?

Product recalls / Defects

Plant injuries / Worker safety

Brand reputation

Noncompliance

ETQ, part of Hexagon Manufacturing Intelligence 7

Proactive quality management strategies can help minimize recall risks. Some examples of proactive control strategies
that can be enhanced by QMS implementation include:

Document control Supplier management

Document control ensures that documents A robust supplier management process
are accessible, compliant and up to date. ensures that an organization consistently
A robust document control process is important receives high‑quality products and services
in manufacturing, where precision and from its suppliers.
consistency are critical.
A QMS typically sets out criteria for evaluating
A QMS ensures a standardized process for and selecting appropriate suppliers and
creating, reviewing and archiving documents. establishes regular monitoring and assessment
This reduces the risk of errors by ensuring of supplier performance. This ensures
that everyone follows the same guidelines and that suppliers meet the standards and helps
preventing the use of outdated documentation. identify potential issues early. It also makes
It also allows business leaders to define who it easier to track supplier performance over
can access or approve documents, which time, which allows organizations to maintain
improves confidentiality and control across reliable supply chains and optimize
the organization. In addition, as processes their supplier relationships.
are updated, the QMS can ensure compliance,
tracking that the appropriate employees are
trained on the new process.

Data collection and analysis Audit readiness

Continuously collecting data over time Audits assess whether the organization’s
provides valuable historical insights, which regulations, processes and standards are being
businesses can analyze to adjust and improve maintained. Regular audits help businesses
their processes. Since the data is stored to identify inefficiencies and compliance gaps,
in a centralized system, it can be accessed reducing recall risks proactively. In addition
by quality, production and management teams. to internal audits, many organizations are
subject to customer and regulatory audits,
This continuous flow of data helps organizations
which requires that companies must always be
drive real-time corrections and constant
audit‑ready to ensure successful outcomes.
improvement. Teams can detect potential quality
issues and bottlenecks as soon as they occur and A QMS provides a clear structure for audits and
rectify them immediately before they escalate. securely stores critical audit data, ensuring
It also provides opportunities to analyze that auditors can easily access the information
the data to identify trends, patterns and areas they need for a thorough review. It can also
for improvement and to avoid problems before automatically generate audit reports, saving
they occur. time and reducing the risk of human error.

By centralizing audit trails, the QMS makes it

easier for departments to track and document
compliance over time, which is especially useful
when preparing for regulatory inspections.
This centralization ensures that all audit data
is readily accessible, enhancing accountability,
easing compliance demands and boosting
transparency across the organization.

This proactive approach reduces the likelihood of

unexpected issues arising during external audits,
helping to minimize the risk of non‑compliance.

8 ETQ, part of Hexagon Manufacturing Intelligence

 AI adoption in manufacturing
is accelerating
As more manufacturers seek to improve efficiency while maintaining quality standards, AI adoption is accelerating.

Survey insights Which of the following best describes your organization

with regards to using or planning on investing in AI
for manufacturing?

Today, AI adoption is overwhelmingly viewed as

inevitable, given that only 1% of respondents said they
would never use AI. This reflects a growing acceptance
of the technology among manufacturers. This survey
found that AI adoption has risen sharply in recent years
with 49% percent of manufacturers saying they plan
to deploy AI within two years, an increase from 2024.

Forty-seven percent believe AI’s most valuable

function is automating core processes, such as defect
detection and document processing. This shows
Planning Already Planning Never
increasing confidence in AI’s ability to drive efficiency on using in using on using planning on
on a day‑to‑day basis while also helping to address the next but not using
two years until 2 years
the labor shortage where AI can handle repetitive or more
from now
analysis while humans fill higher value roles.

How AI is improving manufacturing quality

AI-driven predictive analytics and automation improve Using AI across the business can also enhance
efficiency across businesses by helping them forecast transparency. Real-time monitoring and data visualization
trends, demand and potential risks. Predictive quality make it easier to track performance metrics and share
analytics allow manufacturers to minimize defects before information across teams. This improves risk management
they reach the market, which boosts efficiency and and paves the way for long-term efficiency.
minimizes the cost of poor quality.

Another key benefit of AI in improving manufacturing What are the most important things do you hope AI can
quality is that it helps streamline production processes by accomplish for your organization? (Select up to 3)
identifying inefficiencies and recommending adjustments
in real time. This leads to higher operational productivity
across the business. The ability to analyze vast amounts
Automate document processing
of data coming from equipment sensors and other sources
quickly allows companies to detect and address potential
issues before they escalate, improving product quality and
minimizing downtime. Automate core processes

A third benefit of AI technologies like machine learning

is that they can continuously learn from historical data Spot defects on the
to improve forecasting accuracy over time. This leads manufacturing floor
to better, more informed decision-making and more
optimal resource allocation. It can also reduce costs
associated with scrap and rework and ensures that Predict future trends
businesses respond quickly to market changes.
 Investment in quality tools and
processes will increase in 2025
Quality has become a key priority for manufacturers, and investments in quality tools and processes are set
to increase this year.

Survey insights
A significant proportion of manufacturers are making By what percent do you think your organization’s total
substantial investments in quality programs and spending on quality programs and people will increase
prioritizing quality as a marker of success: 39% spend in 2025?
$10M – $49.99M on quality programs per year, while
24% spend $50M – $99.9M per year.
1% - 10%
Manufacturers are demonstrating their commitment
to quality through their budgets — sixty percent plan
to increase their quality spending this year. 7% of survey 11% - 20%
respondents anticipate that their organization’s total
spending on quality programs and people will increase 21% - 30%
by up to 10% in 2025. Meanwhile, 38% of respondents
believe the increase will range from 21% to 38% and
10% expect an increase between 41% and 50%. 31% - 40%

Additionally, respondents recognize the importance

41% - 50%
of using structured systems to promote and maintain
quality across the organization. In fact, 55% are now
using a quality management system (QMS) to manage
quality processes.
of respondents are
However, there is still some way to go to ensure that now using a quality
management


every business has access to the systems it needs.
system (QMS)
According to the survey, 27% of manufacturers to manage
cite inadequate technology as the biggest barrier quality processes
to achieving quality objectives.

Approximately, how much does your organization currently spend per year on quality programs and people?

US UK Germany

39% 39% 39%

10 ETQ, part of Hexagon Manufacturing Intelligence

Why companies are prioritizing
quality investments
Businesses have reported that quality investments result In 2025, what are your top 3 business drivers for investing
in increased revenue (44%), improved compliance (44%) in quality initiatives, if any? (Select up to 3)
and supply chain resilience (43%). This shows that quality is
increasingly viewed as a key to long-term success.

One of the most well-known advantages of a QMS is its

ability to help organizations achieve compliance. This
is because it automates many quality management
processes, reducing errors and inconsistencies. For
example, a QMS allows businesses to monitor quality
metrics in real time, enabling quicker, more effective
actions while ensuring compliance documentation is always
up to date.

Strengthen supply chain

However, the benefits of a robust quality management

Improve compliance
process extend far beyond compliance. Investing
in quality and bringing suppliers into quality processes
can significantly boost revenue by reducing defects,
Increase revenue

Reduce costs
returns and customer complaints while driving more

Reduce risk
sales. This can reduce lead time, resulting in faster time
to market and more opportunities to respond effectively
to customer demand.

Providing customers with reliable, high-quality products is

crucial for securing and maintaining a positive reputation
in today’s competitive marketplace.

How many safety issues, if any, occur across your organization in an average year?

1 - 10 11 - 20

None
21 - 30

ETQ, part of Hexagon Manufacturing Intelligence 11

 Safety issues in the plant
remain a challenge
Despite long-term efforts to improve workplace safety, many manufacturing businesses are still struggling
to maintain a safe working environment.

Survey insights
Workplace safety incidents are still a significant Furthermore, 48% of manufacturers say safety
problem, and 41% of manufacturers report 11 to incidents have actually increased over the past
20 safety incidents per year. These incidents five years. This may indicate that current safety
can significantly impact worker well-being, harm protocols and training efforts are not sufficient
productivity across the business and result to protect workers in modern workplaces and
in lasting financial and reputational damage. that they need to be adapted. Additionally,
this could be a result of simply having too
few well‑trained workers to create a work
environment that maximizes safety.

12 ETQ, part of Hexagon Manufacturing Intelligence

Safety issues Has the number of safety issue, increased, decreased
or stayed the same over the last 5 years?

are quality issues

The steady rise in safety incidents suggests

that manufacturers need to improve their risk
management strategies to protect workers
more effectively. Because the health and safety
Increased
workflows in many organizations mirror quality
management and compliance workflows and
protocols, an automated QMS with expanded
Decreased
health and safety functionality is an excellent
hub for improving both. This includes creating
and managing appropriate and ongoing employee Stayed
training, continuous monitoring of safety risks and the same
automating safety event reporting.

In the long term, AI systems become more

intelligent as they gather and analyze huge Integrating quality and safety initiatives helps
amounts of data over time. In doing so, they businesses streamline their risk management
become better at using data gathered across processes by proactively identifying and
an organization to identify recurrent safety addressing workplace issues. For example,
issues, which allows plant managers and others a strong focus on quality ensures that processes,
to implement safety remedies and processes materials and equipment meet high standards.
sooner. In this way, businesses understand when, This reduces the risk of accidents and enhances
where and why accidents occur so they can take overall safety across the organization. As a result,
measures to prevent them from recurring and businesses with integrated quality and safety
improve safety. initiatives report lower incident rates.

How many safety issues, if any, occur across your organization in an average year?

None

1 - 10

11 - 20

21 - 30

ETQ, part of Hexagon Manufacturing Intelligence 13

The future of quality
in manufacturing
The role of quality in manufacturing is becoming on the top floor when the product reaches
more important, and organizations must work hard the customer.
to ensure that they don’t fall behind.
Organizations can further enhance oversight and
To stay ahead, businesses should ensure traceability across the supply chain by investing
they are taking advantage of opportunities in a QMS. This provides business leaders with
to leverage AI and automation wherever possible. a transparent window into every step of the supply
The ETQ Predictive Quality Analytics Solution chain and ensures they can identify compliance
can significantly improve precision and efficiency gaps — whether related to quality, safety or
across the company by reducing human error the environment — and address them in time
while also freeing human workers to focus on more to ensure they meet industry regulations.
creative, strategic and impactful tasks. As we have
seen earlier, AI solutions will also help to resolve QMS platforms also provide businesses with
issues caused by the workforce shortage and a robust audit trail that clearly demonstrates
skills gap. effective root cause analysis and the corrective
actions taken to mitigate risks. This makes it easier
Technology can also be used to empower to track and verify compliance over time, which can
organizations where frontline workers are still be crucial for meeting regulatory requirements,
grappling with paper-based processes, navigating passing inspections and maintaining transparency
the balance between production and quality with stakeholders.
pressures and dealing with workforce shortages.
The ETQ Reliance Connected Worker Solution Finally, businesses can improve workplace safety
promotes quality control on the shop floor by prioritizing real-time monitoring and advanced
by breaking down silos and closing the skills training programs. This helps optimize operations
gap by empowering frontline manufacturing and reduce risks across the organization, which
workers to act on opportunities for improvement is essential for maintaining a strong position in
that they notice. This, in turn, drives high quality a competitive market.

Ultimately, investing heavily in quality empowers

manufacturers to drive sustainable growth,
improve product quality and build a strong,
resilient reputation. By prioritizing quality at every
step of the product lifecycle, businesses can build
a competitive advantage and establish themselves
as leaders in a crowded marketplace.
ETQ Reliance
ETQ Reliance® is a leading Quality Management Software (QMS) designed to empower
organizations with comprehensive quality and safety management capabilities.
ETQ Reliance leverages over 30 years of experience in the industry to deliver a robust
and scalable cloud‑native platform. This next-generation QMS is specifically engineered
to meet the dynamic needs of businesses. It ensures compliance, enhances operational
efficiency and fosters a culture of continuous improvement.

Key features of ETQ Reliance include:

Agile platform Cloud-native

SaaS
Built for flexibility and
scalability, allowing Ensures high performance,
businesses to adapt to security and accessibility
changing conditions and from any location,
expand as needed. supporting remote and
mobile workforces.

Core applications Advanced

analytics
This area covers essential
quality processes such as Provides actionable insights
document control, training through powerful data
management, audits, analytics tools, facilitating
change management and informed decision-making
corrective actions. and risk management.

Expanded quality capabilities

Beyond core QMS applications, ETQ Reliance offers the most comprehensive
portfolio of quality and safety management applications to cover areas such
as supply chain quality, nonconformance handling, new product introduction,
safety management and life sciences compliance.

ETQ Reliance supports organizations in

Learn more about
their digital transformation journey, enabling
Advanced Quality Management
them to maintain high standards of quality
and compliance across their operations.
at
ETQ.com

ETQ, part of Hexagon Manufacturing Intelligence 15

ETQ, part of Hexagon, is a global leader in integrated
quality management, health, safety, and environmental
solutions for manufacturers. Learn more at etq.com.

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