Importance of Cost of Quality in Apparel Industry

Last Updated on 13/03/2021

Cost of Quality in Apparel Industry

The term Cost of Quality (COQ), refers to the costs associated with providing poor quality product or service. Quality is one of the least understood subjects in the apparel industry. The problem is that most of the apparel manufacturers, barring exceptions, do not realize the real cost they pay for ignoring quality. The amount of money going down the drain could be as high as 20 to 25% of the total manufacturing costs. This cost incurred due to poor quality is called Cost of Quality. A greater understanding of cost of quality can surely help reduce these costs and improve profitability of the operations.

Cost of Quality in Apparel Industry
Fig: Cost of Quality in Apparel Industry

Cost of Quality (COQ) in the apparel industry is still a widely understood misconception. The term often gets associated incorrectly with the price of creating quality merchandise. Actually, it is the other way round i.e. the amount of money incurred because the product was not manufactured right at the first time. Thus, the concept of quality costs in the garment industry is a means to quantify the total cost involved in quality-related efforts and deficiencies pertains to a manufactured apparel product.

Although it is not very easy to calculate COQ for any industry, research shows that the costs of poor quality can range from 15%-40% of business costs (e.g. rework, returns or complaints, reduced service levels, lost revenue). Most of the apparel units do not know what their quality costs are because they do not keep records on a daily basis. A large portion of resources is consumed in finding and correcting mistakes in the merchandise or related processes. Typically, the cost to eliminate a failure in the customer phase is five times greater than it is at the merchandise development or manufacturing phase.

Every time work is redone, the cost of quality increases. The obvious examples in the apparel industry include:

  • The reworking of a garment
  • The retesting of performance of apparel
  • The rebuilding of a garment machine
  • The correction of an apparel size specification sheet or change of care label
  • The reprocessing of garment to improve dimensional stability after wash or the replacement of a trim to fulfill the requirement of a customer or to meet safety issues.

In general, the cost of quality has two main components: the cost of good quality (or the cost of conformance) and the cost of poor quality.

The cost of poor quality affects internal and external costs resulting from failing to meet the requirements specified for an apparel product by the garment industry. On the other hand, the cost of good quality affects the cost for investing in the prevention of non conformance to requirements and the costs for appraising the apparel product for conformance to requirements.

You may also like:

  1. How to Maintain Garment Quality Standards with QC Checklists
  2. Quality Control Inspection in Garment Industry
  3. 7 Tools of Quality Used in Garment Industry
  4. Functions of Quality Assurance Department in Garment Industry

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