COST ANALYSIS OF POOR QUALITY IN APPAREL MANUFACTURING – A CASE STUDY

Abstract

Indian apparel industry is going through tough times due to uncertainty in global markets. The competition from neighboring apparel manufacturing countries like China, Bangladesh, and Vietnam is ever increasing and thus it is very important to be price competitive. The buyer’s are squeezing exporters in quality parameters, delivery lead times and prices. Unfortunately Indian apparel industry is plagued not only by low productivity levels but also because of losing lot of money on account of poor quality. on an average the organizations lose about 25- 30% of manufacturing cost due to poor quality .In the organization understudy it is observed that the cost of poor quality is as high as 30%. In Apparel industry the objective of reducing quality related costs can only be achieved if the organizations reduce their rejection rates and eliminate expenses on rework/ repair. As quality is one of the least understood subjects in Apparel Industry, the problem lies in the fact that this money spent is hidden and due to delivery pressures only a handful of organizations are able to focus on reducing such expenses .In such a situation it thus becomes very important for the organizations to focus on improving quality standards and reduce quality costs. This research paper is an attempt to make the industry aware about the implications of poor quality on their respective organizations and in the industry as a whole and suggests ways to reduce the cost of poor quality. This research paper focuses on calculating the cost of poor quality and addresses the areas with major quality failures and provides suggestions to reduce such failures with simple yet effective measures.