QUALITY TOOLS quality plan, sorting out rejected lots, etc. f ) Quality Audit It is the cost involved with time that personnel spend in performing audit. 3. Costs of Internal Failures a) Scrap Scrap represents the losses incurred in the course of obtaining the required level of quality. b) Rework It is the extra payments made to operators to achieve the required level of quality. c) Material Procurement costs It represents those additional costs incurred by the material procurement personnel in handling both rejects and complaints on purchased materials. 4. Costs of External Failures a) Warranty Charges Costs of concessions made to customers due to substandard products and services being accepted by the customers as it includes loss in income due to downgrading products for sale as seconds. b) Product service It represents all product service costs directly attributable to correcting defects/ imperfections or special testing. c) Product liability It is the quality related costs incurred as a result of liability judgments due to quality failures. d) Product recall It is the cost incurred as a result of recall of products or components of products.
Textile Value Chain can be determined how much cost is involved in achieving certain level of quality. Finally, it will help to budget realistically to achieve a desired quality level. CONCLUSIONS As delineated in the above paragraphs, in garment manufacturing, Quality Costing is an extremely important tool in managing quality and business strategy planning by quantifying all quality related activities in monetary terms. The Indian garment manufacturers will be benefited by utilizing this concept to improve upon their quality related performances in today's highly competitive business scenario. REFERENCES 1. Anon., 'Quality System for Garment Manufacturing', www.ellisdev.co.uk, 2004 2. R M Liang and J Webster, 'Stitches and Seams', The Textile Institute, Manchester, 1998 3. Anon., Course Material of 'Workshop on Quality Costing', The Associated Chamber of Commerce and Industry of India, New Delhi, 1997 P V Mehta, 'Quality Management: An Overview' in Testing and Quality Management', editor: V K Kothari, IAFL Publications, New Delhi, 1999, p-34.
BENEFITS OF QUALITY COSTING As it is mentioned earlier, the analysis of Quality Costs shows the highest percentage of expenditure is incurred in Failure Costs followed by Appraisal Costs and very little Preventive Costs before the establishment of the Quality Costs system in a garment manufacturing company. After a certain period of Quality Costs system is brought into operation, if the investment is increased in Preventive Costs, then the Failure and Appraisal Costs come down not only in terms of percentage but also in absolute money terms of total cost. This indicates a direct economic benefit to the company. Besides, there are a few more advantages. By showing how much poor quality actually costs, senior management can be enlisted in quality improvement efforts. Also, the performance of the Quality Control department can be evaluated in financial terms and it
July - September 2012