Artificial intelligence been a buzzword for years, but it looks like this tool may be arriving at your location soon. That is, if you’re not already using it. More than half of companies surveyed expect to increase their spending on AI this fiscal year, according to respondents of our Annual Quality Spending Survey. And spending on automation is also expected to increase.

In conjunction with Quality, myCLEARopinion Insights Hub conducted the 24^th Annual Spending Study in order to determine actual spending for quality assurance and control equipment, software, and services compared to the projected/budgeted amount as well as the change in budgets within quality equipment and services.

Technology adoption is always a fascinating subject. With so much news about AI, how much is it actually being used? Before we get to that, let’s first get a little background about respondents.

The Results Are In

Assembly is the top manufacturing operation performed at our respondents’ locations, done in seven-in-ten locations. This is followed by machining, performed at nearly three-in-five locations.

On average, respondents’ locations have 316 employees, with the majority of company locations employing fewer than 250 employees at that location. This has gone down from the mean high of 415 in 2022.

Where are they located? The Midwest has the bulk of respondents, 42%, followed by the South at 22%, Northeast at 20%, and the West at 17%.

What are you making? Respondents said the top products produced at their companies include aerospace products/parts, fabricated metal products, electrical equipment, appliances & components, and medical equipment and supplies.

Nearly two-fifths of respondents have a quality management role. Other primary job functions include quality engineering, corporate management, manufacturing engineering, and manufacturing management/operations.

Nearly half of respondents are at least very familiar with their company’s fiscal 2025 budget. When asked in late September and early October, nearly three-in-five respondents reported their 2025 budget has already been started.

By the time you read this, most respondents said that their budgets would be done.

Sixty-nine percent of respondents report that they will have a final, approved quality equipment/services budget for fiscal 2025 in 2024, with 57% indicating this approval happens in the fourth quarter of 2024.

Concerns and Solutions

Is there anything bothering you in your manufacturing world? There may be a few concerns on your mind, both old and new. The current economy/inflation, skilled labor shortages, and supply chain interruptions remain the top concerns for respondents, and have been for past three years. However, there’s another worry on the horizon. Cybersecurity is causing a lot more concern than in the past, almost doubling this year to 35% from 18%.

Technology can address some of these concerns—while creating new concerns. The skilled labor struggles in many cases are the reason companies turn to automation. Automation spending was expected to increase for 35% of respondents.

What other technologies are companies using today? Cloud services/computing is the top category at 56%, followed by automation (53%). Additive manufacturing/3D printing comes in at number three, used by 49% of respondent companies.

The list continues with robots. Thirty-eight percent of respondents are using robots now, with 14% under discussion to use them in the next year or two, and 8% discussing using them in three to five years. Twenty-eight percent have no plans to use them yet.

Digitization; wireless sensors; and integration of smart connected machines and manufacturing assets with the wider enterprise are the next categories seeing growth.

Artificial intelligence jumped from 8% to 14% for those who currently use it—and fewer people said they had no plans to use it at all. Either respondents are using AI, plan to use it soon, or plan to use it a little further down the road.

And interest is growing in almost every category listed. More people were using these technologies compared to the previous year, and more people were planning on using them sooner than later.

Quality Remains Important

As the staff at Quality would hope, quality remains important to our readers. Fifty-five percent said the importance of quality has increased at their company in the past year—22% said it was much more important and 33% said it was somewhat more important. Forty-three percent said it was about the same. Only 2% said it was somewhat or much less important. (Good to hear!)

Now let’s look at the 2023 actual spending. Nineteen percent of respondents report that their 2023 actual spending was over budget, on average by 19%. Spending less than planned is a phenomenon many of us might not be familiar with, as 13% said that their spending was under budget, on average by 17%.

Sixty-nine percent of respondents project their 2024 spending to be on track with the budget set last year.

Looking ahead, almost half of respondents picture a similar spending outlook for 2025 as 2024. A similar proportion believe their spending will increase, on average by 19%.

January is the top month for spending—at least on quality purchases. And February and March are big spending months too. Two-thirds of respondents expect their location to begin making their first quality assurance/equipment/service purchases in the first quarter of 2025.

If respondents plan on increasing their 2025 budget, their primary motives include: improving productivity, reducing scrap and rework, and replacing old or worn out equipment. Increasing production capacity is another top motivation, as 49% cited this as a reason for spending, up from 40%. Lean manufacturing was also a bigger reason this year, jumping to 32% from 21%.

Product Categories

The most common approach to incoming and in-process testing/inspecting is lot sampling, although nearly half of respondents’ companies test/inspect every part or product during final inspections.

Let’s take a closer look at the product categories.

While you may not buy a CMM every year (only 18% plan for this in 2025), chances are you are going to be purchasing a gage (69% anticipate this in 2025).

Testing equipment is on the rise, according to respondents. About 70% of respondents’ companies plan to purchase general-use test/measurement/inspection equipment, followed by gages (69%), and test and measurement services rounded out the top three at 64%—a large jump from the 54% last year.

For those making a CMM purchase, over two-in-five of respondents anticipate their company to spend $100,000 or more on a CMM in 2025. And 32% planned to spend more in fiscal 2025 than in 2024. Of the CMM budget, the future looks especially bright for portable CMMs, which saw a jump from 21% to 28%.

The gaging budget remains stable, with 79% expecting the budget to remain the same. Budgets for gages and gaging systems for 2024 and 2025 are similar with nearly four-in-five respondents budgeting under $60,000. The types of gages respondents plan to purchase remains remarkably stable year after year, with thread gages, plug and ring gages, thickness gages, bore gages, air gages, and others remaining very similar year to year.

Thirty-one percent of respondents indicate their company budgeted less than $5,000 for form and surface measuring equipment in 2024, and 68% expect this to remain the same in 2025. Twenty-seven percent expect this budget to increase for 2025.

Nearly two-thirds of respondent companies budgeted less than $40,000 for general-use test, measurement and inspection equipment in 2024. This is similar to predicted spending in 2025 for most companies.

About two-in-three respondents predict that their plant’s spending for consulting and training services will remain the same in 2025 as budgeted in 2024. Nearly half budgeted less than $20,000 for these services in 2024.

Software makes modern manufacturing possible, and 33% expect their software spending to increase in 2025.

Calibration tops the test, measurement and inspection services budget, coming in at 36% for respondents.

Methodology

The online survey was sent to domestic active, qualified subscribers to digital and/or enewsletter of Quality. The survey was fielded September 25 to October 8, 2024. Each respondent that participated in the study received a $20 gift card. We received 260 useable responses, with a response rate of 1.96%.

And if you were one of those respondents, thank you very much for participating! Your knowledge and insights make our research possible.