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Perspective

The Great Quality Recession

Technology has revolutionized how we attract and assess employees, order supplies, track and measure performance, and control machine and human processes, and has profoundly influenced our cultures. We have access to more real-time data, information, and knowledge than ever before. In fact, AI will only take this to an unprecedented level. Yet despite technological progress, quality is in decline across almost every industry. The overabundance of information may be a hindrance more than an enabler. There is an inherent risk with AI that people will stop exercising critical thinking skills and further negatively impact critical points of human intervention.

A Series of Unfortunate Car Events

The quality recession is evident in the automotive industry, which has experienced extraordinarily high recalls in the last three years. Ford, GM, Stellantis, Toyota, Honda, Tesla, Mercedes, and others have faced serious quality issues that have eroded consumer confidence.

As a life-long “gearhead” who has restored and built several classic cars and hotrods, I find it hard to understand how a long-standing, reliable platform can suddenly become plagued with systemic problems. Case in point: GMC’s 6.2-liter engine. It has been in production since 2014, but recent failures have required total engine replacements in many cases. With over a decade of production, shouldn’t reliability have improved?

This winter I began shopping for a new truck and visited a local Ford dealer. I was told that they couldn’t sell a single F150 truck on the lot because every vehicle was under recall!

A Widespread Issue

The problems aren’t limited to automotive manufacturing. In the airline industry, Boeing’s challenges are all too familiar. Missing bolts on the 737 Max door, 787 Dreamliner fuselage gaps, improper fastener torques, non-compliance-quality parts, debris left inside completed aircraft, and new system design flaws are but a few of the problems that have compromised aircraft safety.

In the medical device industry, recalls of devices like pacemakers, infusion pumps, glucose monitors, interocular lenses, surgery staplers, and a plethora of others have become increasingly common.

Consumer products tell a similar story. 2025 alone saw recalls for garden hoses, pressure cookers, water bottles, and more. Listeria contamination in ice cream and metal shards found in shredded cheese caused just two recent food safety recalls.

The Underlying Causes

I could continue providing examples from other industries and their quality failures, but the pattern is evident. Clearly, outsourcing and geographically dispersed manufacturing models, the integration of complex technologies, aggressive cost reductions, supply chain disruptions, and talent shortages have all contributed to the erosion of quality. However, I believe there are other fundamental causes plaguing manufacturing related to people and leadership. These will only become more pronounced and impactful as the U.S. attempts to rescale domestic production.

Loss of legacy manufacturing knowledge

  • Off-shoring diminished domestic investment in manufacturing, especially in developing the skills necessary to install, operate, and maintain equipment. Many apprenticeship programs were eliminated or diminished, depleting the ready supply of personnel essential to efficiently support manufacturing.
  • Over time, executive leadership became less involved in manufacturing operations, leading to a reduced understanding and ultimately underinvestment in both assets and human resources to continue to evolve domestic manufacturing capabilities.
  • At the operator level, today’s sophisticated equipment embedded with smart technology requires a foundation in math and reading education that is not being provided in certain areas of our country. This has further aggravated the talent shortage and places a greater burden on companies to provide rudimentary training.
  • It may be fair to say that organizations facing the challenges of competing in a global market, needing to keep costs low, and investing profits in technology have failed to provide the critical thinking training their operators need. Specifically, they haven’t emphasized the importance of understanding the “why” behind quality issues and their impact on processes and customers.

Regression in predictive and preventative maintenance and process discipline

  • A significant decline in the application of predictive and preventive maintenance has also contributed to diminished reliability and increased product defects. Often, maintenance is among the first budgets reduced when companies face uncertain financial challenges.
  • From my last corporate role as head of engineering and maintenance within a division of Johnson & Johnson, I can compare the processes and procedures employed during the ’70s, ’80s, and ’90s with what I see at manufacturing clients today. The difference is striking. Somewhere along the way, the discipline required to execute high-quality predictive and preventive maintenance began to erode. I believe this was in part due to the depletion of technical resources who advanced from the shop floor or engineering to maintenance supervisory and managerial roles. As these individuals retired, an expertise void was created that was not adequately addressed through succession plans. In some organizations, workmanship quality standards became increasingly subjective, inconsistent, and ultimately unenforced. When the people installing and maintaining equipment lack a shared understanding of what constitutes quality, reliability inevitably suffers.
  • Ironically, despite the integration of sophisticated software and integrated predictive systems, manufacturing downtime and equipment inefficiencies have often worsened. Defined processes, procedures, and tools are essential, but they fall short of ensuring quality outcomes without trained, disciplined, and accountable personnel.
  • The lack of consistent application of CQV (commissioning, qualification, and validation), 5S/Lean, SOPs (standard operating procedures), and other proven processes and methodologies has negatively impacted quality, as well as efficiency and throughput.
  • In our client experience, we have observed a significant shortfall in organizations’ ability or discipline in defining root causes of issues. And when they do identify root causes, they often lack a structured approach to addressing them and/or employing process improvements in a consistent manner.

Lack of attention to leadership and culture

  • Process controls and compliance are essential components of product quality assurance. Yet when highly sophisticated manufacturers, e.g., Boeing, utilizing state-of-the-art stage-gate processes, “closed loop” feedback systems, and advanced automation, continue to experience rising quality issues, we must ask why. The reasons are many. However, I will suggest that complacency, lack of urgency, and lack of process application discipline are key contributors. I have encountered many organizations with strong processes on paper that were routinely ignored in practice. I attribute most of these factors to the culture of the manufacturing environment, a culture that is a direct reflection of leadership involvement, standards, behaviors, and philosophies.
  • Sustainable high quality cannot be achieved without understanding and addressing cultural influences. These include the labor management relationship; leadership conduct, interest, and engagement; and establishment, education, and enforcement of all standards (safety, housekeeping, workplace organization, environmental working conditions, and others). A “house of quality” cannot be created without a supportive culture.
  • Ironically, we often see plant or production managers who try to do everything themselves instead of sharing and reinforcing the quality culture that they expect. Everyone is “trained” to let the leader solve the issue versus being curious themselves or trying to improve performance.
  • Human error and performance variability are inherent challenges that we cannot fully eliminate, even in well-cultured workplaces. Despite strong leadership and supportive environments, individuals may still struggle under pressure or face unexpected scenarios. Leading organizations provide regular training that emphasizes validating knowledge, rather than simply presenting information in a PowerPoint and assuming it has been absorbed.

We Must Improve and Maintain Quality to Stay Competitive

At this point you may be asking, “So what?” These are not new ideas. The “so what” is this: Quality requires leadership that is both highly disciplined and genuinely caring. If we don’t relearn how to consistently produce high quality products, competitors, here or abroad, will. We learned this lesson in the ’80s and ’90s when we relinquished U.S. auto manufacturing dominance. The “so what” is also that in some cases we endanger lives when quality defects reach the public. And the “so what” is that the U.S. can’t sustain a purely service-based economy (a belief adopted in the ’70s & ’80s).

“So what” needs to be followed by “what now?” Manufacturing is essential to the economy. We desperately need to improve our manufacturing capabilities to produce high quality products consistently.

I believe that we can find many of the answers by exploring and reinstating reliable past practices (such as those listed in the “10 Commandments” section below) and combining these with the powerful technologies available today, including AI. High-quality manufacturing must adopt cutting-edge technologies, such as automation and data analytics, and integrate these with proven established methods.

More than anything else, we need to reignite interest and passion in the world of manufacturing, a passion that my fellow engineers, operators, and maintenance colleagues and l had for producing a product better than our competitors, and one that our consumers could recognize and appreciate each and every time. Promoting the exciting opportunities within manufacturing will draw our young men and women to engineering, the trades, and other roles critical to developing, designing, and manufacturing the highest quality products in the world. Only then can we secure the future of high-quality manufacturing in the U.S.

 

10 Commandments of High-Quality Manufacturing

Through my decades of direct involvement in operations management and improvement, I have concluded that the determinants of consistent high quality are captured in these Ten Commandments.

  1. Plant safety standards and enforcement
    • Ongoing training, reinforcement, and recognition
  2. Plant organization and housekeeping standards
    • Everything in its place, a defined place for everything
    • Expectations for orderliness and cleanliness understood and reinforced at all levels and for all areas
  3. Clear, concise, measurable, and understood product quality attributes
    • Empowered and accountable personnel, both labor and management
    • Elimination of subjective quality criteria
  4. Raw materials specifications and machine process tolerance compatibility (fit for use)
    • Disciplined control of raw materials and conformance to specifications
    • Purchasing materials at the bottom of the specification range to save money results in compromised quality and increased costs downstream, which eliminates any savings.
  5. Defined and reliable process control parameters
    • Compliance to control parameters through both human intervention and technology
  6. Machine maintenance and reliability
    • Repair, preventative, and predictive maintenance standards documented and enforced
  7. Operator and maintenance personnel training and competency
    • Strong engagement/attitude and ownership
    • Ongoing skills enhancement
    • Smart incentive plans that financially benefit the employee and company and inherently incorporate quality outcomes within the incentive formula
  8. Management understanding and engagement in manufacturing
    • Visible and engaged presence on the plant floor
    • Problems are solved on the floor, not from a desk (applying GEMBA)
    • Active review of operations data and obtaining operator input
  9. Labor–management relationship
    • Environment of trust, respect, ongoing interaction, and understanding of mutual interdependencies and contributions to company success
  10. Executive engagement and support
    • Demonstrated commitment to manufacturing excellence through investment, involvement, and caring interactions
    • Aligning incentive to the right and best performance measures across all roles

 

January 20, 2026

Author

  • Portrait of Rich Panico, Founder and CEO of Integrated Project Management Company (IPM).
    CEO
    Integrated Project Management Company, Inc.
    LinkedIn Profile

    C. Richard Panico founded Integrated Project Management Company, Inc. in 1988 and has served as CEO ever since. An active advocate of values-based culture and meticulous quality, Rich has been recognized by DePaul University’s Institute for Business and Professional Ethics and the University of Illinois’ Entrepreneurial Hall of Fame, among others.

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Author

  • Portrait of Rich Panico, Founder and CEO of Integrated Project Management Company (IPM).
    CEO
    Integrated Project Management Company, Inc.
    LinkedIn Profile

    C. Richard Panico founded Integrated Project Management Company, Inc. in 1988 and has served as CEO ever since. An active advocate of values-based culture and meticulous quality, Rich has been recognized by DePaul University’s Institute for Business and Professional Ethics and the University of Illinois’ Entrepreneurial Hall of Fame, among others.

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