Quality professionals are gearing up for another year of spending—on everything from CMMs to software to services—and most of you will be starting now. The first quarter of 2017 is spending season for quality professionals, and January in particular is the big spending month.
Our 17th annual Quality Spending Survey looks at what people will be spending money on, why they’ll be spending it, and how this has changed from year to year. As with years past, the idea behind the study is to gather information on spending for capital equipment, software and services. We wanted to learn the actual spending for quality equipment, software and services compared to the projected amount; the change in your approach to quality as compared to a year ago; overall spending on equipment/services; and the change in budgeted quality equipment and service categories.
Let’s take a closer look at respondents to this year’s survey. Two-thirds of respondents work at a location that does assembly. This was followed by manufacturing operations such as drilling, milling, finishing, welding, turning, forming/fabrication, grinding, stamping, injection molding, and gear cutting. The average location has 437 people. Twenty-eight percent work at a location with less than 50 people, and only 9% work at a location with 1,000 or more. These numbers are a jump from last year, but consistent with years past: the average company size was 337 last year, but 494 in 2014 and 428 in 2013.
And the respondents represent every region of the country, with 38% from the Midwest, 26% from the South, 19% from the Northeast, 17% from the West, and less than 1% from U.S. Territories.
Aerospace parts and products are the most commonly produced at their location (15%) followed by fabricated metal (14%), although a range of products are produced, including plastics and rubber products; electrical equipment, appliances and components; motor vehicle body, trailer and parts; medical equipment and supplies; primary metal; energy industry; machinery manufacturing; other transportation equipment; computer and electronic product manufacturing; navigation, measuring, and control instruments; and miscellaneous manufacturing.
The Importance of Quality
About half of respondents are in quality management and a quarter are in quality engineering. Other job functions include: engineering technical, corporate management, manufacturing management/operations, manufacturing engineering, research and development, and purchasing.
More than half of respondents indicate quality is more important now than it was a year ago. For 40% it’s about the same level of importance, and only 4% said it was less important.
Let’s take a look at last year’s actual spending vs. projected. In most cases, these line up—70% said last year’s spending was the same as projected. This is the highest it’s been in recent years, with only 59% saying actual matched projected in 2015, and 65% and 64% in 2014 and 2013, respectively.
Fourteen percent said they spent more than they budgeted last year, by an average of 27% more. Seventeen percent said they spent less than they budgeted, by an average of 35%, a 10% point increase from 2015.
And now for current year spending vs. projected—71% spent the same as budgeted, 12% said they spent more, by an average of 15%, and 17% said they are spending under budget, by an average of 26%.
They are also optimistic about the future, with more than a third expecting an increase for next year’s fiscal budget. Those that expect an increase, on average, expect a 29% increase. This is the highest expected increase in recent years, up for 20% in 2015 and 21% in 2014. About 44% expect the budget to remain the same.
Only 17% expect a spending decrease, by about 26%. This is also a slightly higher expected decrease than in 2015 (21%), 2014 (22%), and a jump from 2013 (18%).
This spending is starting now. Sixty-three percent of respondents plan to make their first fiscal year purchases in the first quarter of 2017. January is the biggest month for spending, with 32% planning to make their first fiscal year purchases now. About one in ten planned to make their first fiscal year purchase during 2016.
Improving productivity and reducing scrap and rework are the top investment motivations for those that plan to spend more next fiscal year. These were both cited by 57% of respondents. The next tier of motivation for spending was ramping up for new product (43%), reducing costs (42%), and tighter part quality standards (41%). The next motivations were increasing production capacity (36%), improve cycle time (35%), enhance machine/process flexibility (33%), comply with ISO quality systems (28%) or regulatory compliance (15%).
The inspection approach varies for respondents, but the general trends have remained stable. While the majority of respondents perform lot sampling for incoming parts, nearly half inspect every part or product at the final product stage.
The Planned Purchases
In putting together their shopping list for this fiscal year, general-use test, measurement and inspection equipment is at the top of the list, followed by gaging. The majority of respondents said they plan to purchase general use-equipment (68%), with gages mentioned by 66%. But there is a range of equipment and services that quality professionals plan to get this year.
Test, measurement and inspection services were on the list for 48%, product testing equipment was mentioned by 42%, followed by consulting and training services (39%), software (37%), optical inspection and measurement equipment (34%), materials test equipment (26%), nondestructive test equipment (22%), form and surface measurement (19%), coordinate measuring machines (16%), and color and coating thickness measurement (13%). Only 11% of respondents did not plan to purchase any of these items in 2017.
A Closer Look at Spending
Let’s drill down and look at these categories more closely. On average, planned budgets for most evaluated equipment types are less than $70,000. Of course, the CMM budget was almost double that, with an average of $134,000 expected to be spent in that category. For those who plan to invest in CMMs, the average 2016 budget was lower than it was in 2015, but it is expected to increase in 2017. CMM spending is primarily going towards CNC equipment, while allocations for portable, manual and DNC have dropped in recent years.
For form and surface measurement equipment spending, it appears that the 2016 budget is higher than 2015 and expected to remain the same for 2017.
The average 2016 fiscal year budget for gages and gaging equipment is $23,621 and the majority of respondents expect it to remain the same for 2017. A third of the budget is planned to be spent on handheld measuring tools, followed by 20% planned to be spent on fixtures and special tooling gages.
The average 2016 fiscal year budget for optical inspection and measurement equipment is $34,170 and half of respondents expect it to remain the same or increase in the next fiscal year. Machine vision systems are expected to receive 31% of this year’s fiscal budget for optical inspection and measurement equipment—up from 16% in 2015—followed by video measurement systems expected to receive 25%.
Coating thickness is expected to receive two-thirds of next year’s color and coating thickness equipment fiscal budget. The average 2016 fiscal year budget for product testing equipment is less than half of 2015’s and about two-thirds of respondents expect it to remain the same for the next fiscal year. The product testing equipment budget for 2017 is expected to primarily go towards environmental test equipment.
The average 2016 fiscal year budget for materials test equipment is $49,706 and about two-thirds of respondents expect it to remain the same for the next fiscal year. Respondents expect to spend more on tensile testing and less on hardness testing in 2017, while expected spending for other products is consistent with the previous year.
The average 2016 fiscal year budget for nondestructive test equipment is significantly higher than 2015; the 2016 budget was $37,850 as compared to $24,616 in 2015. About two-thirds of respondents expect this budget to remain the same the next fiscal year. No single nondestructive test equipment is expected to receive the majority of the budget next fiscal year, although the largest proportion of the budget is expected to go towards ultrasonic test.
The general-use test, measurement and inspection equipment budget average for 2016 is $34,765 and more than two-thirds of respondents expect it to remain the same for the next fiscal year. Fifty-nine percent of 2017’s general-use test, measurement and inspection equipment fiscal budget is expected to go towards calibration equipment. Expected budget allocation has remained relatively consistent over the past few years.
The software budget saw a big jump this year and has continued to rise. The average 2016 fiscal year budget for software applications was $39,011, up from the $24,623 in 2015, and more than triple the 2014 budget of $12,700. About half of respondents expect this budget to remain the same in the next fiscal year. Compared with last year, more budget will be spent on data collection and document control/management, while less will be spent on CMM programming and simulation.
And now let’s leave equipment behind and move on to training. The average 2016 fiscal budget for consulting and training services is $34,574, and the majority of respondents expect this budget to remain the same for 2017. This is an increase from 2015’s $21,260, and 2014’s $22,285, although consistent with the almost $34,000 that was projected for 2013.
More than a third of the consulting and training services budget is expected to go towards certification/registration, and less than 15% is expected to go towards each of the remaining types of consulting and training services, including advanced product quality planning (APQP), design of experiments, failure mode and effects analysis (FMEA), geometric dimensioning and tolerancing (GD&T), gage repeatability and reproducibility (GR&R), lean manufacturing, NDT training, process improvement, quality functional deployment (QFD), quality management, Six Sigma, and statistical analysis.
In looking at test, measurement and inspection services, the average 2016 fiscal year budget is $43,591, and 71% of respondents expect it to remain the same for the next fiscal year. This is a jump from the $25,190 budgeted for 2015 and the $19,521 for 2014. Half of this budget is expected to go towards calibration services, while all other categories are such expected to receive about a tenth or less of the budget.
The Web-based survey was sent to a systematic random sample of Quality’s domestic subscribers. It was fielded October 20 to November 28, 2016. The survey had a response rate of 1.54%, with 296 responses received. Thank you to all those who responded to this year’s survey. We appreciate your help, and your fellow quality professionals do too.
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