The Definitive Guide for the TIC Sector
- Category: Medical
- Publishing date: 28 February, 2022
- Author: The LabShare Team
Who could have predicted the Internet would be taking the world by storm? Arguably, some technologies in the wings today could make such a difference. One thing is for sure: without testing, inspection, and certification, we would never be able to get to know them.
Those looking for revolutionary solutions should keep an eye on the TIC (Testing, Inspection, and Certification) industry, providers who help manufacturers improve their productivity, efficiency, and internal processes.
Regardless of industry, TIC companies work to verify the safety and performance of a product, service, or process. Product reviews fall into two categories, depending on when they occur. The first type is conducted before a product is introduced to the market, and the second while the product is already in use.
The TIC sector refers to quality control organizations all over the world that provide a range of services from auditing to inspection, testing to quality assurance, verification to certification. It is to their credit that innovative products can reach consumers (whether companies or individuals), and they do so in a safe, reliable, and efficient way.
Where is the TIC industry headed today?
According to recent forecasts, the total value of the testing, inspection, and certification market could reach $143.3 billion by 2027. Market growth is also driven by governments enforcing strict regulations, and increasing consumer awareness. It is, therefore, more crucial than ever for the quality of products to be certified by independent organizations.
And yet, the sector is impacted by the limited availability of testing facilities, the lack of a skilled workforce, and varying regulatory standards. COVID-19 and the consequential safety measures have also posed a serious challenge to the industry. As a result, production slowed down or even stopped in some sectors, such as the automotive industry or consumer electronics. To compensate, companies responded by accelerating the pace of digital development, automation, and remote services.
One focus of TIC is the testing of hardware, such as cars and machinery, either on-site or in a lab. Along with global trade, regulatory requirements and out-sourcing have also increased, and so has the demand for these external services. Over the past decade, the TIC market has grown at an average rate of about 8% per year. However, digitalization is expected to bring about significant changes in the sector.
Connected devices, mobile payments, and connected cars will become more commonplace, making software testing and inspection as important as hardware testing and inspection is today. In addition, companies will provide TIC services remotely on a continuous basis.
What are the key trends in the TIC sector today?
There is an increasing emphasis on human rights, health, and safety. With large companies, some of the most dangerous work environments are found at the beginning of the supply chain, such as mines, fields, or emerging economy worksites. These usually remain invisible to stakeholders.
While working conditions in such locations are difficult to assess, TIC service providers employed by third parties are often asked to investigate the “end” of the value and supply chain.
Environmental awareness plays a significant role due to the growing population, accelerating urbanization, frequent food shortages, and global climate change. Revolutionary technologies such as blockchain or artificial intelligence promise process automation. On the other hand, they pose a challenge and thus require increased attention even post-market entry.
The growth of the TIC sector is partly due to the steady increase in forgery and counterfeit products. According to a joint article by the OECD and the EU’s Intellectual Property Office, these accounted for 3.3 percent of global trade in 2019. The lack of transparency undermines consumer confidence, mainly in the IT, pharmaceutical, B2B, medical equipment, and food & beverage sectors. Thus, TIC services remain essential for clean trade to ensure product safety and protect the reputation of manufacturers.
According to a study by Meticulous Research, testing was the most demanded segment of the TIC market in 2021. This is partly due to the growing variety of available products, the high demand for quality and safety, the strict regulations imposed by the authorities, and standards that differ from region to region. However, the certification segment might expect the fastest growth throughout the next decade.
As per the customer side, the agricultural and food segment held the largest share of the global TIC market in 2021. This is due to the continuous growth of the segment and the growing demand for organic and processed food. However, studies forecast the most explosive growth in healthcare throughout the next decade.
In terms of geographical distribution, Europe had the largest share of the TIC market in 2021, with a number of the world's largest industrial processing companies, automotive companies, military equipment, and medical device manufacturers.
Is the TIC sector going digital?
Digital technologies will bring major changes to the TIC sector, and while traditional market players are lagging, those embarking on digitization are already facing high growth.
With respect to digital maturity, we can distinguish passive, literate, performer, or leader companies. And while passive ones are doomed to fail, literates can transform and digitize operational processes to catch up with the large players.
Another growing focus of TIC businesses is the inspection of newly installed hardware, e.g., in cars or machinery. Due to modern technology, checks can now take place in the office as well as on-site, or inside a laboratory. Industrial requirements have increased, and so has the demand for external inspection services.
As a result, there will be less need for on-site inspections. Several TIC players are currently experimenting with online monitoring of elevators, pressure vessels, and other hardware. It is estimated that in the next decade, digital technologies will account for 40 to 60 percent of the TIC market.
In addition, state-of-the-art providers now employ digital technologies themselves. Smart sensors can ensure a continuous stream of information with round-the-clock monitoring and inspection capabilities, allowing personnel to perform 24/7 security checks and maintenance tasks.
Cloud-based technologies are also crucial for sharing freshly collected data for certification. These technologies reduce the number of on-site inspections but require more analysis. Several players are currently experimenting with the online monitoring of elevators, pressure vessels, and other devices. Both smart sensors and cloud-based systems are now used by nearly 70 percent of companies in the global TIC market.
As apps proliferate, the growing number of cyberattacks and data security issues are likely to lead to stricter regulations, once again benefitting the TIC sector. The proliferation of big data results in a growing demand for data management, allowing TIC providers to introduce new services such as predictive maintenance.
Similarly, security concerns will lead to the widespread use of connected devices such as connected cars, smart home networks, and other IoT innovations. TIC companies may well become gatekeepers of the data generated by these systems.
Blockchain technology is the most important recent invention in computing which can be used for end-to-end traceability solutions for food and other products. Therefore, the demand for TIC services related to blockchain systems is bound to increase.
As the automation of smart machines progresses, it will also bring about a growing need for TIC services. For example, agricultural equipment that analyzes climate and soil data to determine optimal farming practices will require TIC. In addition, the increasing use of VR and AR devices is likely to create a major opportunity in product testing. Several TIC players are already experimenting with AR for inspections to improve their service quality and efficiency.
In the coming decades, it will not be possible to succeed without a convincing digital vision and strategy. Thus, for traditional TIC actors, digital transformation will be a priority.
The use of digital technologies, such as various apps and platforms, is crucial to facilitate customer engagement. In addition, the company requires a skilled workforce with plenty of experience in the digital world. Big names such as SGS, Bureau Veritas, and TÜV SÜD have prioritized digitization, while smaller companies are already lagging behind.
Who will be the future clients of the TIC industry?
Currently, Asia Pacific (APAC) is the largest market for testing, inspection, and certification. APAC is one of the fastest-growing markets for technology solutions and offers attractive opportunities, leading many companies to expand their presence in this region.
China, India, South Korea, and Japan are among the major centers in APAC, accounting for the largest share of the market. But what are the most important sectors served by TIC companies?
Whether for transport, power supply, or industrial applications, devices in the 21st century are increasingly supported by lithium-ion batteries. The demand for batteries is ramping up with 30 percent year-over-year growth around the world, reaching 3900 gigawatt-hours (GWh) in 2030.
In Europe, it is inevitable to build a domestic battery value chain for a clean energy transition. The European Commission launched the European Electricity Alliance in October 2017 in response to the industrial challenge. The goal is to create a strong European battery industry with an annual market value of €250 billion by 2025.
Battery testing is, therefore, essential. Without it, several products or components would never get the all-clear to enter the market. The TIC sector plays a significant role in this process. Continuous testing is required to obtain European market standards.
These include ECE R100 (entailing the safety requirements specific to the electric power train of road vehicles), IEC 62660-1 (for the performance and life testing of secondary lithium-ion cells), and ISO 12405 (related to electrically propelled road vehicles). In addition, EMC testing ensures that any devices containing lithium-ion batteries will not malfunction due to a high level of electromagnetic interference.
Explosive growth is predicted on the market for medical devices, where products range from band-aids to hearing aids, meaning they might require a plethora of different verification procedures. To obtain the required CE marking for the European market, manufacturers must first grade a medical device according to the degree of risk it poses, and place it in one of the four distinct classes.
The global testing market for medical devices is expected to grow to $657.98 billion by 2028. The market is driven by the harmonization of the standards, the growing consumption of medical devices in developing countries, and the trend to outsource testing services.
The cybersecurity of medical devices is a sensitive issue. They can connect directly to the Internet, the hospital’s internal network, or other devices that contribute to the success of healthcare. However, it is precisely these properties that pose a cybersecurity risk. Medical devices are vulnerable to security breaches that might affect their functioning.
Threats and vulnerabilities cannot be ruled out, and thus, the management of healthcare environments remains a challenge. Manufacturers play a significant role in medical device testing that usually involves players from the TIC sector. An important industrial standard is EC 60601-1, which sets out requirements for the safety and performance of various medical electrical equipment.
As inspection and testing become obligatory in some industries, such as oil and gas, the demand for TIC services is expected to increase. TIC providers offer comprehensive quality assurance across various stages of the oil and gas supply chain. This industry presents particular challenges to operators, as production and storage are dynamic and subject to market fluctuations.
Finally, the consumer electronics market was temporarily shaken by the COVID-19 crisis but is on the way to recovering. The global electronic products market is expected to reach $1291,14 billion by 2025.
The supply chain is dominated by China, where the majority of assembly processes take place. Non-assembled products come primarily from Japan, South Korea, Singapore, and Taiwan.
Understanding the tipping point: how to navigate changes and stay relevant in the TIC sector?
What counts as a tipping point in the development of a business? Is it more of an opportunity or a threat? The truth is, it might be both, but what it means to your business depends only on how well you recognize and use the opportunity.
A tipping point occurs when a series of improvements give way to irreversible changes. Such a point has arrived in many industries. Just think of banking: transactions used to take place in person, yet today, customers perform tasks in one application. As a result, they now expect control over their business transactions.
But not only technological advancements trigger such a radical change. Just think of the improvements the pandemic has brought to e-commerce transactions or digital healthcare.
This question is more important than ever due to the traditional providers of TIC getting more and more competition from startups and established TIC companies with a digital focus.
One example is AsiaInspection, a quality control and compliance company that has digitized its customer interface. Within 48 hours of making an appointment, the inspection is performed and a detailed report is available online the same day.
Non-TIC players also pose a serious threat in areas such as predictive maintenance, supply chain integrity, data collection and analysis, and cybersecurity.
This category includes original equipment manufacturers who have always been interested in grabbing a piece of the TIC services pie, as well as large consulting and accounting firms known for their independent, third-party judgment and advanced digital capabilities. Thirdly, tech giants have a significant competitive advantage in the digital space due to their access to vast amounts of data that they could eventually use for TIC-related services.
Thus, if a TIC company misses a tipping point, it risks becoming irrelevant. Think of how Kodak missed out on the transition to digital photography - that is, if you even remember them today. Thus, it is crucial to be prepared for change and convey to customers that they are dealing with a developing, forward-thinking company.
The same goes for the TIC sector. It is only a matter of time before first movers gain a significant business advantage by using a three-tier, customer-centric business approach. But how can these tiers be defined?
Using software to oversee TIC affairs, the first tier allows customers to plan and book appointments with the TIC business while having insight into their exact workflow. This method is long-established in hospitality for booking hotels and restaurants.
At the second tier, technology is also provided for customers to track work-flow. Such a system allows them to see how the job is progressing. It also helps them schedule their own workflow and financial plans.
Finally, the third tier means a TIC business can also link the billing and payment process to the completion of work. This improvement comes with the advantage of more efficient cash flow and fewer overdue invoices.
Once all three tiers are in place, transaction costs lessen while the accuracy and customer satisfaction increase. In the meantime, underutilized business capacity can be prioritized for mining new prospects to enhance sales and business value.
An example of this is LabShare, whose technology presents a tipping point in digitizing the product testing market. We assessed the needs of our customers and turned our experiences into a new service for the testing industry. We offer complex products to manufacturers and product assembly providers, as well as to the laboratories they use.
Those who do not follow the latest trends risk falling behind on the next tipping point. How do you avoid becoming such a company? Register on LabShare and choose from laboratories by price, location, capacity, and availability!