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Remakes & Returns: Quality Issues Are Costing You More Than You Think

Measure twice, cut once.

That may be the gold standard for quality control, but many apparel and textile companies choose to instead face consequences of an after-the-fact QA strategy rather than building a thorough processes throughout their entire supply chain. While some of these repercussions become measurable in the final cost, others are less quantifiable, leading brands, retailers and manufacturers to underestimate how deeply these issues are truly affecting their bottom line.

As an industry that’s historically used labor at the common denominator, many brands and retailers prioritize labor costs and chase the nickel-an-hour worker around the world, Gary Ross, president of GERoss Consulting LLC, said to Sourcing Journal. But equally important is knowing your supplier’s supplier because determining such things as inconsistent raw material qualities, non-compliant trims and poor process control lets companies head off problems before they occur, he said.

Although firms may try to correct issues during production, addressing them during preproduction increases the chance that a first-quality product will be delivered from the sewing line.

“Many manufacturers have learned that the hard way,” Ross said. “It costs more to make a ‘second’ than it does to make a first-quality product because a second has to be [fixed]. Not only can’t you ship it, but that same operator is trying to repair an operation that was incorrectly processed in the first place.”

An abundance of chemical testing that apparel and textile manufacturers are required to observe also heaps on its own set of issues, noted Dirk Bendig, senior consultant at compliance software firm Topo Solutions.

These costs can add up, and companies with smaller production runs don’t have the benefit of distributing the testing costs across a large number of items. As a result, “these companies are often dependent on reducing the testing costs by partially suspending the necessary tests, which in turn can be a risk if the wrong tests are suspended,” Bendig said.

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Beyond the direct overhead associated with quality control, these costs can extend to customer loyalty. “In the age of e-commerce, returns are very expensive for retailers and brands, and poor quality leads to more returns,” said Brian Adams, CEO of Retail Reworks, a consumer-products inspection, rework and refurbishment service provider.

“Customer-friendly returns/exchange processes allow customers to return products for free with the brand/retailer paying the return shipping. Returns cost brands and retailers billions every year,” he added.

Consumers within the fiercely competitive apparel industry are more demanding than ever, said a spokesperson from quality management firm SgT Group, with high expectations surrounding both the technical quality of a garment (performance and durability) and its perceived quality (feel, comfort and fit). When unsatisfactory purchases result in disappointment, it can then be widely shared on social media and negatively impact a brand’s reputation, leading to lost sales and share ceded to competitors.

For quality issues discovered at distribution centers, costs can pile up when the products then need to be reworked at a third-party facility, he said. “Brands and retailers with established factory relationships have the ease of the factory paying for rework, but lost sales due to seasonal merchandise, sales, etc., can still be a burden.”

E-commerce and direct-to-consumer brands have even less leeway with poor quality, added Bendig, as just a single negative experience from can permanently turn off a customer from an inexperienced brand.

“Newcomers often lack manufacturing know-how and underestimate the complexity of regulations and requirements to market a product in the respective sales countries,” he said. “Most of these brands are located in the sales markets but not in the manufacturing countries, [and] there is a natural disconnect between brand and factory.

“Consequently, it becomes even more important for brands to have tools that allow them to remotely monitor and track their supply chain process to ensure product quality and compliance,” Bendig added.

As expected, a fear of tariffs and the current trade uncertainty are also putting pressure on the quality control process. “Buyers are looking to diversify their sourcing country portfolio to spread their risks of increasing tariffs,” said Tobias Grabler, Topo COO.

“Searching for new suppliers in new countries comes with uncertainties about productivity and quality,” he said. “Every combination of country, supplier and product group scores differently on these dimensions.”

With all of these untested relationships stressing an already-trying process, it’s even more imperative that companies conduct factory audits, said Ross, and not be led astray by new options that sound too good to be true.

“Uncertainty and unpredictability are the sourcing executive’s nightmare,” he said. “It starts with a proper factory audit. [For example] understanding what their constraints could be, discipline in time and calendars, if the total sample has to be approved on this date [or] if the lab dip has to be approved on this date.”

And while there may be no shortcuts to good processes, new technologies can help companies more efficiently and more accurately collect the information that’s required to ensure proper quality.

Technology opens the lines of communication between factories and buyers, explained Retail Reworks’ Adams. “It also allows for real-time video calls to cover the construction of garments. Technology also allows for distribution centers to accept and flag shipments in need of rework or inspection much easier.”

Topo’s Bendig echoed this, noting that data-driven technology can improve both products and process. “Not only is it [possible] to use appropriate risk analyses to focus on specific causes and their solutions, it can also serve to improve cooperation between the factory and, for example, the brand or retailer. …  With this combination, it is ultimately possible to realize that not only product quality [and] customer satisfaction increases, but also production costs decrease. Only those who are ahead now can play in the premier league in the long term.”