Each year, Quality looks at the manufacturing landscape to see what companies plan to buy, how much they plan to spend, and the reasons behind these decisions.
And according to our 13th Annual Spending Survey, quality is increasingly a priority for companies. More than half (56%) of respondents indicated that it was somewhat or much more important than a year ago.
This year’s survey examines a range of spending categories, from equipment to software and services. Careful readers of our Spending Survey will notice that we have changed the methodology this year to look at trended results. This resulted in a finer breakdown of categories, and included information to compare from previous years. In addition, we’ve looked at trends in inspection methods.
While the survey does not quantify exactly how much will be spent on quality next year, the good news is that the majority of respondents report being on target with budgets: 68% expected their spending for fiscal year 2012 to match the amounts budgeted in 2011. About half (48%) expect next year’s spending to match this year’s, and 40% expect their spending to increase. Of those expecting an increase, the average increase is at 22%. The top three reasons for the projected increase are reducing scrap and rework, cited by 60%; improving productivity, cited by 53%; and tightening part quality standards, also at 53%.
Comparing projected spending for 2013 with 2012 offers some insights into spending growth. Interest in nondestructive testing jumped dramatically with a 95% increase from last year. Seventeen percent say they will be purchasing this test equipment. Test, measurement and inspection services also drew more interest: the number of people who said they would purchase it next year increased by 61%, with 34% planning to buy. Optical test and measurement equipment rounded out the top three growth areas, with a 56% increase and 22% planning to buy.
Color and calibration will also be receiving more attention, as these subcategories were projected to grow. In the color and coating thickness test equipment, more emphasis will be placed on color, with 47% of this category allocated to color measurement, a 56% increase. And 19% of the software application budget will be spent on calibration—an 86% increase.
Respondents plan to buy gages, test equipment and services. The top projected spending area is gages and gaging systems, as more than half (52%) plan to buy these. General use test, measurement and inspection equipment came in at 41%, and test, measurement and inspection services were mentioned by 34%.
This year, the mean company size was 491 employees, slightly down from 523 in 2011, but up from the 436 in 2010. As in years past, the Midwest garnered the largest group of respondents. This year, 38% of respondents worked in the Midwest, followed by the South at 26%, the Northeast at 19%, and the West at 17%. The regional responses closely matched results from the past two years.
Fabricated metal products continued to play a major role. The largest number of respondents (18%) made fabricated metal products, followed by aerospace, motor vehicles, plastics and rubber, medical equipment and supplies, machinery, and electrical equipment.
Seventy-four percent of respondents worked in quality/product assurance, compared to 66% last year, and 72% in 2010. This was followed by 16% who worked in manufacturing engineering and manufacturing operations. This year, only 4% of respondents said they worked in corporate management, down from last year’s 11%, and slightly lower than the 6% in management in 2010. Research and development came in at 2% this year, and purchasing rounded out the list with about 1%.
The importance of quality continues: 27% rated it as much more important this year, followed by 29% who described it as somewhat more important, and 42% who said it was about the same level of importance. Only 2% ranked quality as somewhat or much less important.
How did the 2011 actual spending compare to the 2010 budget projections? Sixty-three percent matched their projections, while 21% were under budget and 16% came in over budget. Of those that were under budget, the mean was by less than 25%. Fourteen percent of respondents reported being under budget by 5% or less, while 29% said they were under budget by more than 25%.
For those whose spending exceeded their projections, the mean was 21%. Twenty-one percent said they were over by 5% or less, just as 21% said they were over budget by more than 25%.
And based on the fiscal 2012 experiences to date (the survey ended in August), the 2012 numbers were similar to those predicted in 2011. Sixty-eight percent came in on target, while 18% said they were under budget and 14% over budget. Of those that were under budget, the mean was 23%. To break that down further, 15% said they were under budget by 5% or less, while 28% said they were more than 25% under budget.
Of those that were over budget, the mean came in higher, at 30%. Twenty percent of the over budget group said they were only 5% over budget, and another 20% said they spent 25% or more than expected.
The future may look similar. About half of respondents (48%) expected that their 2013 spending on quality assurance and control equipment, systems, software and services would match the fiscal 2012 spending. Forty percent expected spending to increase, while only 12% predicted a decrease. For those expecting an increase, they predicted a mean increase of 22%. For those that projected a decrease in spending, the mean was 33%.
According to those that predicted an increase in spending, the principal reasons listed for investment were 1) reducing scrap and rework, 2) improve productivity and 3) tighter part quality standards. Additional reasons included: increase production capacity, reduce costs, ramp-up for new product, comply with ISO quality systems, improve cycle time, regulatory compliance, and enhance machine/process flexibility.
The survey asked respondents to explain their inspection approach to incoming, in-process, and final product.
A look at the 2012 results for incoming products revealed that 11% did no sampling of incoming products, 31% did random sampling, 49% did lot sampling, and only 8% inspected every part or product.
For in-process parts, 4% did no sampling, 28% did random sampling, 39% did lot sampling, and 29% inspected every product or part.
The numbers changed when it came to the final product. Forty-seven percent sampled every part or product, 33% inspected with lot sampling, 16% with random sampling, and only 4% did no sampling.
The breakdown was similar for 2011 and 2010. The biggest difference in results was in the treatment of incoming parts. In 2011 respondents cited more inspection of every product (11% as compared to 8% in 2012), more lot sampling, and less random sampling.
EQUIPMENT SPENDING EXPLAINED
The survey also examined spending for specific equipment. The CMM budget for the 2012 fiscal year came in at a mean of $73,794. Thirty-three percent listed a CMM budget between $100,000 and $249,999. Thirty-four percent budgeted $50,000 to $99,999, while 28% budgeted $10,000 to $49,999. Only 5% said they budgeted less. And looking ahead, 39% expected their CMM spending to increase, another 39% said it would stay the same, and 22% predicted a decrease.
The 2012 fiscal year budget for purchasing form and surface measurement equipment came in at a mean of $28,244, with the largest segment (33%) reporting a budget of $50,000 or more. Forty-seven percent predicted that this would remain the same, 37% said it would increase, and 16% said decrease.
Gages and gaging systems earned a budget with a mean of $30,520 for the 2012 fiscal year. Forty-six percent estimated that this would remain the same, while almost as many (43%) predicted it would increase. Only 11% predicted a decrease.
The budget for optical inspection and measurement equipment for the 2012 fiscal year came in at a mean of $22,684. Half of the respondents expected this to increase next year, 34% expected it to remain the same, and 16% predicted a decrease.
For the 2012 fiscal year, the mean product testing equipment was $66,348. The largest number of respondents (47%) budgeted more than $50,000 on this equipment for the 2012 fiscal year, and the majority of them (57%) expected this number to stay the same. Thirty percent expected an increase and 13% a decrease.
The mean spending for general-use test, measurement and inspection equipment such as calibration or laser systems was $37,526 in 2012, with 57% expecting this to remain the same. Thirty percent expect an increase, and 13% a decrease. Spending for calibration equipment rose in 2012, while data collection spending dipped.
MATERIALS TEST PURCHASES
The mean budget for materials test equipment was $46,236 in 2012, with 42% of respondents saying that they would spend $50,000 or more. In looking ahead to next year, 44% think the budget will remain the same, 40% expect it to increase, 11% think it will decrease, and 5% said they didn’t know.
Of the materials test subcategories, spending on tensile testing, scanning microscopes and metallography continued to rise in 2012.
The nondestructive testing budget for 2012 was $19,989. The largest group of respondents, at 32%, said they would be spending $5,000 to $7,499. The next largest group, at 21% of respondents, said they had a budget of $5,000 or more.
And more than half of respondents expect to continue on this path, with 56% expecting the budget to stay the same. Thirty-four percent expect an increase, 5% expect a decrease, and another 5% said they didn’t know. Of the NDT subcategories, the percentage of the budget spent on transducers was on the rise between 2010 and 2012. Dye penetrant climbed this year, while X-ray equipment spending fell.
Ultrasonic equipment remains the top percentage of the NDT budget. It was about 25% of the budget in 2010 and 2011, but dipped slightly in 2012.
Hardness testing fell to 13% from 39% last year and 25% in 2010. Eddy current testing equipment also fell from the 10% of the NDT budget in 2010 to about 6% in 2012.
SOFTWARE AND SERVICES
Software purchases came in at a mean of $14,172 in 2012. Respondents were evenly divided on whether this would increase or remain the same for next year, with 40% selecting increase, 40% thought it would remain the same, and another 20% selecting decrease.
Calibration software spending almost doubled this year, jumping from an estimated 10% of the software budget in 2011 to 19% in 2012. Data collection software, meanwhile, dropped from 19% to 13%. Statistical Process Control (SPC) software also dropped to 4% from 12%.
Consulting and training services showed a mean of $25,506 for 2012. This was expected to remain the same for 43% of respondents, increase for 33%, and decrease for 24%. The bulk of the consulting and training services—almost 40%—were spent on certification and registration for programs such as ISO 9000.
Test, measurement and inspection services, currently with a mean budget of $27,228, were expected to stay the same for next year by 63% of respondents. Twenty-eight percent predicted an increase and only 9% a decrease.
Calibration services remains the largest spending area for the test, measurement and inspection services budget, though it fell this year to 45%, down from the 62% last year and 59% in 2010.
The web survey was sent to 14,955 active, qualified Quality subscribers from our domestic circulation. The survey had a 3% response rate. The fielding period was July 24 to August 8. Quality would like to thank all those who participated in this year’s survey.