An overwhelming majority of manufacturers are either using AI today or plan to use it within the next two years, according to Octave’s Pulse of Quality in Manufacturing survey. It also indicates that quality is rapidly emerging as a core business driver, with 71% of organizations planning to increase quality investment in 2026.
What’s more, manufacturers across the United States, U.K. and Germany are elevating quality from a functional discipline to a strategic priority—amid rising product recalls, escalating regulatory pressures and a persistent skills shortage impacting 85% of product quality outcomes.
“Manufacturers are at a pivotal moment where quality is no longer just a function—it’s a strategic lever for growth, resilience and competitive advantage,” says Vick Vaishnavi, head of Octave Reliance. “This year’s Pulse of Quality in Manufacturing survey findings make it clear that organizations are doubling down on quality investments and embracing AI to drive smarter operations. They still face an uphill struggle, however, with persistent labor shortages, rising product recalls and the repercussions of tariffs. Manufacturers that overcome these challenges will be those that treat quality not as a cost center, but as a catalyst for innovation, efficiency, and long-term business performance.”
Key takeaways:
· Nearly half of manufacturers are already using AI—and adoption is set to surge further. 47% currently use AI in quality processes (up from 33% in 2025); 43% plan to deploy AI within two years. Among AI users, 51% are leveraging generative AI/LLMs. Top use cases for quality professionals include document automation (48%), defect detection (44%) and training (46%).
· Investment in quality is accelerating as organizations tie it directly to business performance. 71% expect quality spending to increase in 2026 (up from 60% in 2025); 63% now view quality as a company-wide strategic initiative (up from 38%). 45% report into a dedicated VP of quality or chief quality officer. Top drivers include increased revenue (49%), improved compliance (48%) and stronger supply chains (43%).
· Manufacturers are navigating increasing regulatory pressure alongside global trade disruptions. 59% report increased external regulatory requirements; 65% report higher internal quality standards; 56% say tariffs or geopolitical issues have significantly impacted their business; and 68% have raised prices as a result, while many are shifting to domestic sourcing.
· Despite increased investment in quality, recalls continue to impact the majority of manufacturers. 75% experienced a product recall in the past five years; 59% say each recall costs between $10-$49.9 million (up from 48%); 47% cite supply chain issues as the primary cause.
· A widening skills gap is directly affecting product quality across the industry. 78% report being impacted by labor or skills shortages (up from 70% in 2026); and 85% say these shortages are negatively affecting product quality.
