Lumafield, a leading manufacturing intelligence platform, released the results of its comprehensive Cost of Quality Report. In partnership with NewtonX, Lumafield surveyed quality leaders across the U.S. and Canada and found that shifting global trade policies and the escalating affordability crisis are forcing manufacturers to confront the Cost of Quality (COQ) while remaining cost-competitive. 

The report reveals 62% of respondents believe tariffs and other trade barriers have made it harder to ensure product quality. Furthermore, supplier-related quality issues are the top concern across every industry represented in the research, with 41% indicating that a 25% reduction in supplier-related quality issue costs would have the greatest operational impact. 

Quality costs every manufacturer money, but Lumafield’s findings show many don’t have a clear picture of just how much:

•    40% of the organizations represented in the research estimate that quality-related costs consume 2-5% of their revenue, while 42% place that figure at over 5%.

•    58% of respondents believe at least a quarter of their true quality costs go unaccounted for. 

•    While COQ models have existed since the 1950s and are considered a foundational tool for manufacturers, only 35% of decision-makers surveyed use a comprehensive COQ model. 

Despite the availability of advanced technologies, the report highlights a heavy reliance on outdated methods: 

•    77% of organizations surveyed still rely on manual visual inspection.

•    Nearly half of respondents spend 5-10% of all production labor hours on inspection.

•    The majority of respondents (65%) place the hourly rate of inspection labor cost between $25-34, representing a substantial recurring expense that could be optimized through automation.

Manufacturers in the survey reported that the rapidly shifting tariff and trade barrier landscape has had a significant negative impact on quality.

•    62% of respondents said tariffs and other trade barriers have made it harder to ensure quality.

•    The largest impact from tariffs and trade barriers has been component shortages, with 71% citing it as a challenge.

•    More than half (54%) indicated suppliers have downgraded product quality in order to offset tariff costs.

•    27% of respondents say overseas suppliers have started to conceal the real country of origin of their products in order to evade tariffs.

“Rising trade barriers and component shortages are creating a minefield for manufacturers,” said Eduardo Torrealba, Co-Founder and CEO of Lumafield. “Quality has a cost, and if you aren't accurately measuring it, you’re essentially gambling with your margins. The research shows an enormous and real technology opportunity as AI and automated inspection are delivering measurable gains in efficiency. But those benefiting the most from this are the ones that have built the data infrastructure to actually make the technology useful.” 

The Lumafield Cost of Quality Report provides complete findings from the research and is available as a free download at https://www.lumafield.com/cost-of-quality-report.