Link each quality exception to its lot, then record extra work, material loss, transport and recovery once. Keep the quantity rejected separate from the quantity permanently scrapped; reworked material may become saleable.
A rejection is a decision point, not the final loss
A held lot may be corrected, sold at an agreed lower grade, returned or scrapped. Those outcomes have different costs. Check the inspection record and what finally happened to the material before putting a rupee value against “rejection.”
ASQ's cost-of-quality framework distinguishes prevention and inspection from failures such as rework and scrap. This guide uses that distinction for an operational cost sheet. It does not prescribe textile test limits, correction recipes or an acceptable rejection rate.
Work through one exception
All amounts are examples and exclude tax. A 500-metre lot is held. After review, 450 metres are reworked and accepted. The remaining 50 metres are unusable for the intended order. Their recorded cost before recovery is ₹120 per metre.
| Exception cost | Calculation | Amount |
|---|---|---|
| Additional processing | 450 m × ₹12 | ₹5,400 |
| Extra transport | Recorded charge | ₹1,200 |
| Additional inspection labour | Recorded extra cost | ₹900 |
| Unusable material | 50 m × ₹120 | ₹6,000 |
| Less confirmed recovery | 50 m × ₹20 | −₹1,000 |
| Total recorded exception cost | Sum of the above | ₹12,500 |
The full 500 metres were initially held, but the final material loss concerns 50 metres. Charging all 500 metres as scrap and then adding the rework bill would overstate the loss.
Do not count ordinary inspection twice. The ₹900 is extra paid work caused by this issue. It is not included in any other cost line. If staff completed it within normal hours, record the time separately unless your costing policy allocates it consistently.
Separate recorded cost from possible consequences
A late delivery could cause a concession or lost order, but it is not yet a confirmed rupee loss. Add a separate “possible impact” column with its evidence. Move an amount into recorded cost only when the event and value are established.
Likewise, a supplier may accept responsibility without issuing a credit yet. Record a pending recovery and its owner. Do not subtract an expected credit from the confirmed loss as though it has already arrived.
Use a worksheet that can be traced
- Order, lot, process and date the issue was found.
- Quantity checked, held, reworked, accepted, downgraded and scrapped, with units.
- Issue description and supporting inspection reference.
- Approved action, responsible person and completion date.
- Each extra charge, recovery and source document.
Choose categories your team can apply consistently. “Shade issue” is more informative than “quality problem,” but its cause should remain unassigned until the responsible technical person checks it. The person recording the cost should not invent a process diagnosis.
Review recurrence without confusing it with volume
Compare incidents within the same process and a similar product mix. A supplier handling twice the metres can have more incidents but a lower rate. Show affected metres alongside total metres processed, as well as the recorded cost.
The next management question is specific: “Which lots needed costly repeat work this month, and what still needs fixing?” That directs attention to evidence and closure, rather than blaming the supplier with the largest total workload.
Questions you might ask
Is every rejected metre a loss?
No. Record whether it is corrected, downgraded, returned or scrapped. Only the final outcome and extra costs establish the loss.
How do I avoid counting rework cost twice?
Separate original production cost from additional exception cost, and link each charge to one document and one cost line.