Implementation of a Quality Cost Management Model: Case Study from the Textile Industry Sector

Abstract

The goal associated with quality costs management, is to reduce them, because they can make up a significant proportion of a company’s overall expenses, but the majority of Portuguese companies from the textile industry sector do not use quality cost management systems. Additionally, there is a scarcity of sectorial case studies on this topic. Thus, a research gap seems to exist demanding more case studies on the application of quality cost models on specific contexts. The main objective of this work is show how to implement the Prevention-Appraisal-Failure (PAF) Model in a dyeing and knitting finishing company. The implementation established an appropriate categorization for each quality cost element, data were collected and analysed. The total quality costs represent 12% of sales turnover, distributed unevenly by four categories: 23% of prevention costs; 26% of appraisal costs, 46% of internal failures costs, and 5% of external failures costs. Top managers considered this value higher than initially anticipated and promoted the deployment of improvement projects. This work can provide guidelines for companies in the same sector to adopt such quantification as a means of justifying new improvement projects and reduce costs.