The 2025 ASQ World Conference on Quality & Improvement in Denver, Colorado took place from May 4-7, 2025, and featured a packed session hosted by ETQ customer, Chip Williams from Hitachi Energy, and ETQ Senior Product Marketing Manager, Jennifer Bianchini where they explored the rising cost of quality, which can account for up to 20% of revenue for many organizations.
It was a great mix of real-world insights, data-driven trends and practical advice for tackling hidden quality costs. Below, we share some highlights for those who couldn’t join us.
What Is the True Cost of Quality?
If you’ve ever dealt with rework, warranty claims or product recalls, you’ve already experienced this issue. What’s often overlooked is how much hides beneath the surface, including missed deadlines, lost productivity, customer dissatisfaction and compliance risks.
Hidden quality failures can be 4x more costly than visible ones. It’s not just about fixing broken parts; it’s about identifying and eliminating root causes before they turn into major business disruptions.
Recurring challenges that many manufacturers are facing today were discussed, including:
- Reactions to market needs
- Supplier quality issues
- Maintaining compliance at scale
- Lack of data visibility
- Poor quality concerns
Many manufacturers and organizations are still operating in reactive mode, using outdated tools in a world that demands speed, visibility and agility.
Global Trends Drive Quality Transformation
Session speakers shared compelling data showing that quality management is no longer just an operational concern, it’s a strategic priority. Key drivers include:
- Digital transformation and AI: Adopting predictive tools catch problems before they escalate.
- Globalization: Organizations need scalable QMS solutions to manage teams and supply chains across multiple locations.
- Legacy system replacement: Replacement of paper, semi-automated processes, aging and fragmented systems present the opportunity for advanced, cloud-based QMS.
Industry Spotlights
A few industries stood out during the session, with highlights from the 2025 ETQ Pulse of Quality in Manufacturing Survey Report:
- Automotive: Labor shortages and supply chain issues are contributing to an increase in recalls, with 75% of companies facing severe labor shortages. One major manufacturer reported 37 recalls in a single year.
- Life Sciences: 49% of companies report rising quality costs, with product recalls creating massive risk, with 75% of med device, pharma, life science companies reporting they have experienced a recall in the last 5 years.
- Food & Beverage: 75% of companies are investing in AI, blockchain & IoT to improve traceability, reduce waste and optimize inventory management.
A Better Way: Proactive, Connected Quality
Companies that take a proactive approach and connect their quality processes through an eQMS see results such as:
- Reduced risk of noncompliance
- 50% REDUCTION in time spent supporting external audits.
- Streamlined operations
- 30% REDUCTION in time spent managing customer complaints.
- Reduced costs
- 10% REDUCTION in field failure costs.
Customer Spotlight: Hitachi Energy
During the second half of the session, Chip Williams, Quality Manager at Hitachi Energy, shared how the company is embedding quality into everything they do. With 38,000 employees in 90+ countries, their key to success has been enforcing process discipline, integrating compliance checks and leveraging ETQ Reliance to create a closed-loop system for visibility and action.
He broke down the cost of quality, noting that while rework, scrap, warranty claims and product recalls are important, they’re just one part of the bigger picture associated with inefficiencies across an organization.
The larger portion includes hidden costs like inventory issues, freight, project delays and inefficiencies in areas like sales, engineering and manufacturing. These non-failure costs often go unnoticed but can significantly impact profitability.
In Summary
Poor quality is expensive but preventable. The organizations that succeed are the ones that treat quality as a strategic priority and invest in tools that drive continuous improvement, collaboration and transparency.
Thank you to everyone who joined the session and contributed to a thoughtful, forward-looking discussion.
If you’re rethinking how you manage quality or want to explore how to transform your quality approach, contact us today to request a demo and discover how ETQ Reliance can help your organization.
