Quality's 21st Annual Spending Survey

In our 21st Annual Spending Survey, we’ve looked into who will be buying what and when. Despite the economic upset resulting from COVID-19, equipment budgets look to be steady, if not growing, for the next fiscal year.

While half or more of respondents cite COVID-19, business instability, and the current economy as top concerns, they don’t plan to change more than half of all tested future technology implementations given recent events. One-in-ten respondent companies have delayed adding technology.

Regardless, our survey results have made it clear that quality is a growing priority in the field, and half of respondents believe their 2021 equipment spending will remain the same as their 2020 spending. One-third believe their spending will increase.

Read on for the full picture.

 

Manufacturing Operations

The top manufacturing operation performed at respondents’ location is assembly, done at nearly three-quarters of locations. This is followed by machining, performed at three-in-five locations. While job roles vary, the respondents primarily work in quality management, quality engineering, and manufacturing engineering.

The importance of quality remains steadfast among respondents. Nearly half of respondents state the importance of quality has increased at their company in the past year while half say it has remained the same, similar to last year. Slightly more respondents said that quality has become much more important this year than the year before, indicating that quality will continue to be a priority in the future.

 

Budget Stability

Our survey found that four out of five respondents are at least somewhat familiar with their company’s fiscal 2021 budget, and more than half have already begun budgeting for 2021. In fact, two-thirds of respondents report that they will have a final, approved quality equipment/services budget for fiscal 2021 in 2020, with nearly one-quarter indicating this approval happened in November 2020.

How have quality professionals been managing their budgets over time? According to our data, most respondents did not overspend last year: less than one-in-five of those surveyed report that their 2019 actual spending was over budget. In fact, the number of respondents who reported that their 2019 spending was under budget jumped 10 percent since last year, coming in at 27 percent. Their spending was an average of 21 percent under budget.

Even with a pandemic still in the picture, spending has been relatively stable this year, as two-thirds of respondents projected their 2020 spending to be on track with the budget set last year. That steadiness looks to continue, if not improve, through 2021. Half of respondents believe their 2021 spending will remain the same as their 2020 spending, and one-third believe their spending will increase, on average by 18%.

However, a noticeable chunk of respondents is looking to tighten belts. Seventeen percent of those surveyed say they expect spending to decrease by an average of 28 percent. That’s nine percent more of respondents looking to cut back than last year, who only expected to reduce spending by 22 percent.

 

Timing For Next Fiscal Year’s Purchases

In keeping with previous years, two-thirds of respondents expect their plant to begin making their first quality assurance/equipment/service purchases in the first quarter of 2021. Much of that spending is concentrated in January, as usual. Twenty eight percent of respondents predict spending to take place the first month of the year.

However, some companies may be slightly more tentative in their purchasing due to COVID-19. Twenty three percent of respondents expect their organization to make their first buy in March 2021, which is five percent more than what respondents reported at this time last year (and six percent more than the year before that). This indicates that some organizations may be putting off purchases normally designated for January.

 

Principal Motives For Investments

Manufacturers have ample reasons to purchase new equipment, but those who are increasing their 2020 quality assurance/equipment/service budget next year plan to reduce scrap and rework and improve productivity. While lot sampling is the most common approach to incoming and in-process testing/inspecting— it’s performed by nearly half of respondents’ companies—more than two-in-five companies inspect every part or product during final inspections.

In fact, our survey shows that more manufacturers are choosing to inspect every incoming part or product this year. Twelve percent plan to do this in 2021, up from 8 percent last year, indicating that this may continue to be a trend.

 

Quality Equipment/Services Planned To Purchase

As usual, half of respondents’ companies plan to purchase gages/gaging systems, general-use test/measurement/inspection equipment, and/or test/measurement/inspection services in fiscal 2021. This is consistent with last year’s data, as well.

Let’s dig into the numbers on equipment and services spending: Among those who plan to buy these products/services in the next fiscal year, respondents say that half of their budgets will be spent on Coordinate Measuring Machines (CMMs) and DNC machines in 2021. In 2020, respondents estimated that their companies spent more than $100,000 on this equipment, which is similar to budgets set in this category in 2019.

 

Form & Surface Measurement Equipment

More than one-quarter of respondents indicate their company budgeted less than $5,000 for form and surface measuring equipment in 2020 while two-fifths budgeted $40,000 or more. Spending for 2021 is predicted to be similar. In fact, nearly two-thirds of form and surface measurement equipment budgets will be spent on surface measurement equipment in 2021, on average. In 2019, just 2 percent of respondents indicated their company budgeted more than $200,000 for this equipment, which doubled to 4 percent in 2020. Looking to 2021, eight percent of respondents say their company plans to spend more than $200,000 on this equipment next year. While there looks to be some discrepancies between what respondents planned to budget for in this category this year and what they actually budgeted, these numbers look to be growing over time.

 

Gages & Gaging Systems

Budgets for gages and gaging systems are holding strong. Once again, budgets for 2020 and 2021 are similar with nearly three-quarters of respondents budgeting under $40,000. In 2021, more than one-quarter of gages/gaging systems budgets will be spent on handheld measuring tools, on average.

 

Optical Inspection & Measurement Equipment

Manufacturers appear to be setting aside the same amount, if not more funds for visual inspection tools. One-third of respondents indicated their companies budgeted less than $10,000 for optical inspection and measurement equipment in 2020. Three-in-five respondents predict that their plant’s budget for this equipment will remain the same as budgeted in 2020. Almost one-fifth, on average, of 2021 optical inspection and measurement equipment budgets will be spent on optical comparators and machine vision systems.

 

Color & Coatings Thickness Equipment

Budgeting for color coatings and thickness equipment looks to be steady: More than two-thirds of respondents predict that their plant’s spending for color and coatings thickness equipment will stay the same as what was budgeted in 2020. Almost half of those surveyed budgeted less than $5,000 for this equipment in 2020. On average, nearly half of color and coating thickness equipment budgets will be spent on coating thickness equipment while slightly less will be spent on color measurement equipment.

 

Product Testing Equipment

Demand for product testing equipment (primarily functional testing) is steadily growing, Nearly one-quarter of respondents expect to see an increase in spending here next year, and three-in-five respondents expect their 2021 spending to remain the same as their 2020 budget. To give you an indication of how much money is on the table: Six percent of those surveyed say their companies plan to spend more than a million dollars next year, up from 1 percent last year, and 3 percent the year before that.

 

Materials Test Equipment

Spending for material testing equipment—primarily for hardness testing—appears to be steadily growing, with almost a quarter of respondents predicting an increase in this budget category. Nearly two-thirds of respondents do not expect to see a change in spending on material testing equipment next year.

 

Non-Destructive Test Equipment

Companies are primarily budgeting for ultrasonic testing and X-ray equipment for 2021, and most of respondents— nearly three quarters—plan to keep the same spending plan as last year. One in five respondents expect their company’s 2021 spending to increase compared to their 2020 budget.

 

General-Use Test, Measurement And Inspection Equipment

Spending in this category mimics last year’s, for the most part. Approximately three-quarters of respondent companies plan to budget less than $60,000 for general-use test, measurement and inspection equipment in 2021, which is similar to spending in 2020 for most companies. Calibration equipment receives the highest share of the 2020 budgets for general-use test, measurement and inspection equipment.

 

Software

Most manufacturers are planning to spend about what they did last year on software applications. Specifically, two-thirds of respondent companies budgeted less than $60,000 for software applications in 2020, which is similar to predicted spending in 2021 for most companies.

And when they do spend, our research indicates an average of one-third of software application budgets will be spent collectively on calibration, document control/management, and data collection software next year.

 

Budget For Consulting & Training Services

Companies plan to spend 25 percent of their budgets, on average, on consulting and training services, and certification/registration next year. Quality management and process improvements combined account for another quarter of the budget. Three in 10 respondents state their 2020 budget for consulting and training services is less than $5,000 with just under two-thirds anticipating spending in 2020 to remain the same. How does your company measure up?

 

Budget For Test, Measurement & Inspection Services

More than two-thirds of respondents expect test, measurement, and inspection service spending in 2021 to be in line with the 2020 budget. However, one-fifth of respondents expect to see an increase in 2021. Calibration service budgets in 2021 have stayed the same since 2019, accounting for an average of 38% of test, measurement and inspection services.

 

Methodology

Clear Seas Research and Quality have conducted the 21st Annual Spending Study to provide information on the spending for capital equipment, software and services. The study goals were to find out respondents’ plants’ actual spending for quality assurance and control equipment, systems, software, and services compared to the projected/budgeted amount; change in quality professionals’ approach to quality today compared to a year ago; and the change in allocation of budget within quality equipment/service categories.

The web-based survey was sent to a systematic random sample of domestic subscribers of Quality print, digital edition, and enewsletter, whose primary business is manufacturing and who are familiar with their company’s fiscal quality equipment/services budget for next year. As an incentive, a $10 gift card was offered to all who qualified and completed the survey. The survey was fielded September 24 – October 5, 2020. We received 304 useable returns, for a 1.17% response rate.

Thank you to all those who participated in this year’s survey. We couldn’t do it without you.

The final report of the full survey can be found HERE.