How to Calculate Cost of Poor Quality (COPQ) in Garment Manufacturing?
How to calculate Cost of Poor Quality (COPQ) in Garment Manufacturing?
The Cost of Poor Quality (COPQ) in garment manufacturing refers to the financial impact of defects, rework, rejects, and inefficiencies in production. It includes costs associated with internal failures (before shipping) and external failures (after shipping).
Steps to Calculate COPQ in Garment Manufacturing
1. Identify the Components of COPQ
COPQ is generally divided into four categories:
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Internal Failure Costs – Costs incurred due to defects before garments leave the factory.
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Rework cost (alteration, re-stitching, repairs)
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Material wastage (fabric, trims, etc.)
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Labor costs for rework
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Downtime due to defective work
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Machine and operator inefficiency due to defects
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External Failure Costs – Costs incurred when defective garments reach customers.
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Returns and replacement costs
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Customer complaints and discounts
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Brand reputation damage
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Logistics cost for handling returned goods
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Appraisal Costs – Costs of inspection and quality control.
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Quality control personnel wages
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Inspection and testing expenses
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Equipment for quality checks
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Prevention Costs – Costs spent to prevent defects.
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Training for operators
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Investment in better machinery
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Process improvement initiatives
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2. Data Collection
Gather data from production reports, quality inspection records, return reports, and rework logs.
3. Calculate Individual Costs
Use the following formulas:
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Internal Failure Cost = (Total Reworked Pieces × Cost per Rework) + (Rejected Pieces × Cost per Garment)
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External Failure Cost = (Returned Pieces × Refund per Piece) + (Logistics & Handling Costs)
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Appraisal Cost = (Inspector Salaries + Testing Equipment + Inspection Time Cost)
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Prevention Cost = (Training Cost + Quality Process Improvement Cost)
4. Compute the Total COPQ
Example Calculation
A garment factory produces 10,000 shirts per month.
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Internal Failures:
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500 pieces require rework, and the cost per rework is $2
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100 pieces are rejected, and each costs $10
Internal Failure Cost = (500 × $2) + (100 × $10) = $2,000
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External Failures:
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50 returned shirts with a refund of $12 per piece
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Logistics cost for handling returns = $200
External Failure Cost = (50 × $12) + $200 = $800
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Appraisal Costs:
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Quality control salaries = $1,500
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Inspection equipment maintenance = $300
Appraisal Cost = $1,500 + $300 = $1,800
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Prevention Costs:
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Operator training = $1,000
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Investment in improved sewing machines = $2,500
Prevention Cost = $1,000 + $2,500 = $3,500
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How to Reduce COPQ in Garment Manufacturing?
1. Improve Quality Control Measures
✅ Implement Inline and End-Line Inspections
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Conduct inline inspections at different production stages to catch defects early.
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Use end-line quality checks to prevent defective garments from being packed.
✅ Use Statistical Quality Control (SQC)
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Track defect rates and identify trends using data-driven approaches like Pareto Analysis and Six Sigma Tools.
✅ Increase First-Pass Yield (FPY)
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Set quality checkpoints to reduce rework and increase first-time right production.
2. Train and Upskill Workers
✅ Conduct Regular Training for Sewing Operators
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Train workers on sewing techniques, proper machine handling, and defect prevention.
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Organize Quality Awareness Programs for employees.
✅ Implement a Skill-Based Pay System
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Motivate workers to reduce defects by linking quality performance to incentives.
3. Optimize the Production Process
✅ Use Standard Operating Procedures (SOPs)
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Document and implement SOPs for stitching, cutting, and finishing to standardize operations.
✅ Reduce Excessive Handling & Movement
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Implement Lean Manufacturing to minimize unnecessary material handling and avoid fabric damage.
✅ Use Right-First-Time (RFT) Production Techniques
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Focus on error-proofing (Poka-Yoke) to prevent defects rather than fixing them later.
4. Improve Raw Material and Supplier Quality
✅ Perform Incoming Material Inspections
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Check fabric, trims, and accessories for defects before production starts.
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Reject or replace low-quality materials before they cause defects in bulk production.
✅ Work Closely with Suppliers
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Collaborate with suppliers to ensure consistent quality and on-time delivery of raw materials.
5. Strengthen Process Monitoring and Automation
✅ Implement Real-Time Quality Monitoring
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Use digital tracking systems to record defect rates and provide instant feedback to operators.
✅ Invest in Automation
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Automated cutting machines, sewing aids, and AI-based inspection systems can reduce human errors and improve consistency.
6. Minimize Rework and Waste
✅ Reduce Defective Pieces in the First Place
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Identify and fix common defect sources like needle damage, seam puckering, and fabric shrinkage.
✅ Recycle Defective Garments
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Reuse rejected fabrics for sampling or smaller garment parts (e.g., pockets, trims).
✅ Optimize Cutting Efficiency
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Use fabric utilization software to minimize material wastage during cutting.
7. Implement a Continuous Improvement System
✅ Use Root Cause Analysis (RCA)
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Apply 5 Whys and Fishbone Diagrams to determine why defects are occurring.
✅ Encourage a Quality Culture
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Involve employees in Kaizen (Continuous Improvement) activities to create a quality-driven environment.
✅ Benchmark Against Industry Standards
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Compare quality performance with leading factories to identify gaps and improve.
8. Focus on Customer Feedback and Returns Reduction
✅ Analyze Customer Complaints & Returns
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Track return reasons and work on corrective actions.
✅ Improve Packaging & Handling
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Use proper folding, tagging, and packaging to avoid damage during transit.
✅ Enhance Communication with Buyers.