2025 Predictions: A Pivotal Year for Chief Quality Officers, Embedded Quality, & Operational Excellence

It’s that time of year again when I make my industry predictions for 2025...

Chief Quality Officers are facing a layer cake of crises, from:

• • • Loss of the 20-year worker over the last five years, causing declines in safety, productivity, and quality performance

    • Over-investment in a compliance mindset, while escapes and recalls are on the rise.

    • Escalating prioritization of Operational Excellence that is characterized by pervasive momentum loss.

Operational Excellence is rising in priority as manufacturers struggle with economic concerns. Additionally, more than 60 percent of companies surveyed in our recent research on Embedded Quality have some combination of zero goals, most around zero waste and net zero carbon, with 2030 as a milepost for significant progress on these goals. Operational Excellence and Delivered Quality are key levers to achieve step change improvements that will fund these zero goals.

Chief Quality Officers find themselves being pulled in multiple directions at the same time, and 2025 will be a pivotal year for them to find their way out of the current crisis. However, we see some light at the end of the tunnel for CQOs.

Predictions for Quality and Operational Excellence in 2025:

Quality faces significant challenges going into 2025 and beyond. Several milestone changes are in the works that will be instrumental in pivoting quality away from the oppressive, overfocus on compliance.

• • • Agentic AI, employed in support of compliance, makes compliance easy. Combinations of technology are the new trend in Industrial Transformation. A couple of years ago, we started to see combinations of hardware to automate some inspection activities (a combination of AGVs and Vision Cameras for turbine blade inspection). We have gone through the hype cycle of Generative AI recently, which has me thinking about combinations of technology from a software perspective as well. Generative AI “Bots” can only do so much for you, but if combined with Large Language Models (LLMs) and Process Automation logic layered over the top of a Quality Data Architecture that collects and performs Data Ops (Contextualization, Quality, Cleanliness) on data from across the value chain, automated compliance management becomes possible. 

• • • The new frontier for Quality and Operational Excellence is decision speed:
      Quality has historically been slow to adopt advanced technology. We have seen this across multiple years of researching and advising Chief Quality Officers. With our latest round of research on Embedded Quality, we are starting to see some forward progress on friendliness and the adoption of advanced technology in quality. In our Operational Excellence research, we see trends for the loss of momentum of traditional policy & procedure-based programs that rely on expert practitioners' special knowledge. Quality and Operational Excellence Leaders, in 2025, will make significant progress in employing advanced digital technology, including Artificial Intelligence, Digital Twins, Prognostic Analytics, and Connected Frontline Workforce applications to enhance the ability of less experienced workers to make better and faster decisions in the interest of improving their own work and the Delivered Quality ideal.

• • • Delivered Quality and disciplined Operational Excellence are key differentiators in 2025 Productivity Pathfinders.
      LNS Research unveiled our Industrial Productivity Index this year. The IPI tells a story of long-term declines in Industrial Productivity since 2004. Still, we identified 30 companies across various industry sectors that have bucked the long-term trend and are growing productivity in spite of the overall downward trend. As we go into 2025, we will see that Delivered Quality and disciplined digital Operational Excellence are foundational elements enabling competitive differentiation and improved performance. 

• • • Digital Operational Excellence plays a key role in achieving significant progress on zero goals. In the introduction, I mentioned that Operation 2030 is on the horizon, and small incremental steps in operational improvement won't provide the lift necessary to achieve progress by 2030. However, policy and procedure-based Operational Excellence programs do not deliver results for 75% of manufacturers that try them. In this modern age of digitalization of manufacturing, not only are the tools and processes for Operational Excellence increasingly digital, but layering on intelligence in the form of AI, Machine Learning, and Digital Twins enables much faster time to resolution of improvement efforts and assists in problem identification, and solution ideation. In the Industry 3.0 days of manufacturing, an improvement project could take six months or longer to complete, and results were uncertain at best. Employing a combination of software technology will enable a step-change productivity growth that funds and contributes to Operation 2030 goals.

Now, let's review how I did on my 2024 predictions.

1. Future-Proofing Quality Strategy:

   Prediction: Labor constraints would push quality leaders to adopt future-proof strategies, leveraging technology to compensate for workforce shortages.

   Assessment: While the essence of the prediction is there, the accelerant was different. Quality Leaders are developing future-proof quality strategies that span the value chain, but the impetus is not labor constraints; it's quality performance in the market and the need to differentiate for competitive advantage.

2. Generative AI for Prognostic Quality:

   Prediction: Generative AI would be used to reduce administrative burdens and evolve into "Prognostic Quality."

   Assessment: Generative AI is endemic across Enterprise Software and is being used primarily as the “question-answer box” which accelerates finding things and preparing reports and documents and such. Prognostic quality is also a growing emphasis, however the Venn diagram of Generative AI and Prognostic Quality hasn’t overlapped yet.

3. Seamless User Experience as a Key Factor:

   Prediction: As labor issues worsen, a seamless user experience, particularly through Connected Frontline Workforce (CFW) applications, would be crucial.

   Assessment: The seamless user experience concept is increasingly acknowledged as the necessary approach to reach the now inexperienced frontline worker and deliver actionable insights that don’t increase the administrative burden of multiple applications.

4. Commoditization of Knowledge:
   

   Prediction: The knowledge loss due to workforce changes would impact efficiency, and companies with structured knowledge processes would fare better.

   Assessment: Nailed it! We have seen declines in worker safety performance, quality performance, and productivity. We are seeing the growth of the knowledge economy and the recognition that industrial operations knowledge is increasing in value.

There you have it…my top Embedded Quality and Operational Excellence predictions for 2025. Time will tell soon enough as we head quickly into the new year. Stay tuned as we share the latest transformation insights throughout 2025 and beyond. Happy New Year!