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🏭✨ The Cost of Quality in Apparel Manufacturing ✨🏭

In the world of Apparel manufacturing, quality isn't just a buzzword—it's a critical determinant of success. Did you know that the cost of quality in this industry can be a staggering 14% to 22% of your total revenue? 🧵💰 Unbelievable but True

🔍📊 Unlocking the True Impact of Quality Costs in Manufacturing

Quality isn't just a buzzword—it's a cornerstone of profitability in the manufacturing world. I want to shed light on a hidden truth: the cost of quality, a factor often overlooked, is steering the course of our industry. 🚀

Defining the Cost of Quality:

The cost of quality encompasses every investment an organization makes to meet customer expectations regarding product or service quality. It's a two-fold journey:

1. Cost of Achieving Quality:

- Prevention Costs: Think of these as the gatekeepers at the entrance of your production line, saving you from costly defects downstream. Investment here involves meticulous quality planning, robust control measures, and comprehensive employee training programs.

- Appraisal Costs: These vigilant inspectors ensure each product meets the highest standards before reaching customers, instilling confidence in your offerings.

2. Cost of Not Achieving Quality (Failure Costs):

- Internal Failure Costs: Hidden beneath the surface like an iceberg, these costs appear when defects are discovered within the organization. They include rework, scrapping of defective items, downtime due to quality issues, and resources needed for audits and non-conformances.

- External Failure Costs: These are like storm clouds on the horizon—threatening but not always immediately visible. They include warranty claims, customer complaints, legal fees, and the intangible costs of customer dissatisfaction and brand damage.

The Financial Impact: Industry Averages:

In the world of Apparels, Home Furnishings, and Leather Goods, the cost of quality often ranges from 14% to 22% of an organization's revenue. Concrete case studies and real data from the past decade validate this.

In-Depth Breakdown:

Let's dive deeper into these cost categories:

- Prevention Costs: The foundation of quality management, typically 3% to 6% of total sales for manufacturing companies, ensures defects are nipped at the source, saving both time and resources.

- Appraisal Costs: These typically range between 2% and 5% of total sales for manufacturing companies, instilling confidence in your offerings.

- Internal Failure Costs: Silent budget drainers, often representing between 8% and 12% of total sales for manufacturing companies, encompass not only direct expenses but also ripple effects of downtime, customer audits, and energy spent on rectifying errors.

- External Failure Costs: The most critical to minimize, these often account for 6% to 8% of total sales for manufacturing companies. They encompass warranty claims, legal fees, customer dissatisfaction, and the invisible damage to your brand's trustworthiness.

The Outsourcing Challenge:

For organizations that rely on job work, contractors, piece rate models or outsourcing, these figures can be exponentially higher compared to companies with their manufacturing facilities directly under their control. This difference arises due to the unique challenges and dynamics faced by businesses that delegate manufacturing processes to external partners.

I eagerly anticipate further discussions on how we can assist in optimizing your quality management processes to achieve maximum ROI. 📈✅

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$ Is the first 1 hour of work really giving you 60 mins?
$ How well are you actually managing the productive time of your employees?
$ Are you losing out on time in fruitless activities?
$ Do you want to make that 1st one hour count?

It is studied that the productivity in the first one hour of most work floors is close to 15 to 18%. With precious minutes wasted in walk ins, small talk, greetings and the standard settling in & booting up procedures. Experts on the other hand claim that this 1st one hour of the day has the potential to be much more productive with intelligently designed time management strategies.

Time is the most valuable resource there is, primarily because you cant have it back nor can it ever be reproduced. Unfortunately there is a scope of valuable time loss at every step of business; In duplication of efforts, in wrong assignment of tasks, in mishandling of processes. Processes with potential of greater time loss are best reserved for the most non productive hours of the week.

How many times have you planned meetings on Mondays only to regret two hours hence wishing you could get back those comparatively unproductive two hours back, implementing ideas you had thought of over the weekend?
Time is relative, so said Einstein. Only here, for us managers it is relative to productivity. The first few hours of the day are likely to be far more productive as compared to the mid-week slug and the closing business hours.

Wastage of time is inevitable, in reference to productivity. Specially if you depend more on humans and less on machines. No person can be constantly at his / her best productive levels. If I am 80 % productive on a Monday morning , It is likely to be close to 50 to 60% on a Wednesday evening.

Time management exercises and planning based on substantial research and understanding of the relativity of time & productiveness, enables one to best utilize every moment and minimize wastage of time.

Now, With this understanding question yourself : How much of time (in terms of productivity) are you actually wasting?

In order to make the first one hour count & to know more on how Lean management can help increase productivity and efficient time management get in touch with The Idea Smith.

Lean Regards
Nimish Dave
+91 9650733993 ♦ [email protected]
www.theideasmith.net

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