What is Acceptable Quality Level?

AQL is one of the most frequently used terms when it comes to quality in the apparel export industry. Everyone in the industry uses this term quite liberally, assuming that he knows what AQL signifies little realising the logic behind it, its effective use and most importantly, it true meaning. What was the logic behind it? How does one use it effectively? As most of the acceptance decisions of the apparel shipments for the export market are made on the basis of AQL based sampling plans, it is important that all concerned in the industry at least have a basic idea about what AQL is. In this article, we shall look at the fundamental concept of AQL, its origin and how to prepare an organisation to meet the prescribed AQL. All of us know that inspection is the tool that is used for assessing the conformance of the merchandise to the agreed specifications or requirements. Though inspection is important and it gives us an idea about the acceptance level of a product, it may not be possible to carry out 100% inspection of all the units in a particular shipment or a lot. This is mainly due to the following reasons: It is expensive. 100% inspection is seldom 100% accurate and dependable. It may be impractical and not desirable as it leads to excessive handling of goods which results in goods losing their freshness. Realising that 100% inspection may not be the best thing to do, the next question is: if not 100%, how much to inspect? There are two options available. The first option is to decide a fixed proportion of the lots that will be inspected to arrive at the acceptance decision of the whole lot while the second option is to use Acceptance sampling procedure to arrive at a sampling plan for a given AQL and make an acceptance decision. The first option is arbitrary and does not have any scientific basis which can tell us about the reliability of this technique. Since acceptance decisions are important commercial decisions, it is important to have a reliable and scientific method of arriving at such decisions and one should be aware of the extent of the risks involved in such decisions. Acceptance sampling is a scientific technique and it also tell us the probability of making a wrong judgement while using it.

Dr. Rajesh Bheda is a Professor at the GMT Department, NIFT, New Delhi, one of the worlds leading fashion technology institutes. His teaching, consultancy and research interests focus on productivity improvement, quality management, and the social issues in apparel manufacturing. He is a thought provoking speaker, writer and author. He has been addressing international conferences and has conducted several management development programmes for leading apparel firms. He holds a Doctorate in Management from the Faculty of Management Studies, University of Delhi.

What is AQL? Pradip V. Mehta describes, The AQL is the maximum per cent defectiveness that, for the purpose of sampling inspection, can be considered satisfactory as a process average. In layman's language, this means, when a buyer specifies a particular AQL for sampling inspection, it is an indication that as long as the

percentage of defective garments in the shipments (lots) supplied by a manufacturer is lower than the AQL, most of the shipments will be accepted. Process Average means the average percentage of defective products (percent defective) in the lots submitted for the first inspections. Assume a true percent defective level of six lots of garments is 2.3, 2.7, 2.4, 2.6, 2.8 and 2.2 respectively the process average will become 2.5% defective. The method of arriving at process average in apparel factories is provided later in this article. How do the Acceptance Sampling Plans Work? The apparel industry mainly uses single sampling plans for acceptance decisions. However, a few buyers also use double sampling procedure. In single sample based on AQL table one randomly draws a sample consisting of specified number of garments from a lot. The sample plan also provides the maximum number allowed for defective pieces. If the defective pieces are less than the allowed number, the lot is accepted and if the number of defective pieces is greater than allowed, the lot is rejected. One may say that as the acceptance sampling is scientific, ideally speaking, it must lead to 100% reliable results. In other words, it must always lead to acceptance of lots containing lower defective level than AQL and must reject all the lots that contain more defective products than AQL. But this is not possible, as the acceptance decision is made only on the basis of a small sample drawn from the lot and it carries the risk of making a wrong judgement. Acceptance decisions based on AQL norms of inspection contain two kinds of risks as detailed below: 1. Producer's risk: The chance of rejecting a good lot that contains equal or less percent defective than AQL. 2. The Customer's risk: The chance of accepting a bad lot that contains more defective than the largest proportion of defects that a consumer is willing to accept a very small percentage of the time. It is also known as Lot Tolerance Percent Defective (LTPD) or represented as RQL (Rejecting Quality level). The kind of risk customers and producers face in terms of making a wrong decision while using an acceptance sample plan can be understood by the Operating Characteristic Curve (OC Curve) of a sample plan. OC curve of a sample plan indicates the chance of acceptance or rejection of lots with varying degree of defective level. Let us take an example of a lot containing of 10,000 pieces. As shown in table 1, the sample code for this lot is K and sample size, table 2, is 200 pieces and acceptance number is 10. Graph 1 shows OC curve of sample plan n=200 and c= 10 for this lot at AQL 2.5. The Y-axis on the graph indicates the probability of acceptance of the lot, where as the X-axis indicates the percent defective level of the lots. As can be seen the lots containing 2.5% defective merchandise is likely to be accepted 97% of the time and there is a possibility of it getting rejected 3% of the time (producer risk). The readers will be surprised to know that a lot containing 5% defective (twice the AQL) also has the chance of acceptance of 58.3 times out of 100 inspections. The customers risk with this sample plan is about 10% where a lot containing 8% defective may get accepted. With a simple procedure an OC Curve for every sample plan can be drawn to assess the probability of acceptance of lots with varying degree of percent defective. Readers who wish to go deeper into the subject can specify their AQL and LTPD and find out an appropriate sample plan for their needs. How does one Ensure Success at AQL Based inspections? The answer to this question is very simple but difficult to achieve. Ensure that your average percent defective level is below the AQL

prescribed by your buyer. What does this mean? It means the true percent defective level of the lots submitted for AQL based inspection must be less than the AQL. For this purpose an organisation has to measure its current average percent defective level (process average). This can be achieved by conducting sampling inspections of the lots before inspection by the customer. In such case, all the pieces in a sample drawn from the lot are inspected to arrive at percent defective level of respective lots. If an organisation does this for about 300 consecutive lots and calculates the average of the per cent defective of all lots inspected, it would give a good idea of the process average. Assuming your process average is lower than the AQL level, then there is a minimal chance (generally less than 5-10%) of your shipment getting rejected. If your process average is greater then AQL level, you need to work towards- if not eliminating-reducing the generation of defect level at source so that the process average becomes lower then the AQL. In case process coverage remains higher than the AQL, the chances of your shipments failing to pass AQL based inspection are higher, depending on the process average. The best way to reduce the process average could be to analyse the kind of defects found in the inspection and their occurrence (frequency). A Pareto analysis as shown in graph 2 can be very useful. Once you know which are the most frequently occurring defects, its possible to go to the source of these defects and concentrate on the elimination of these defects through cause and effect analysis and implementing remedial actions.

Graph I Operating Characteristic Curve for sampling plamn n=200, c=100 lot size (N) 10000 AQL=2.5

Graph 2 Defect Analysis

What AQL is not Now that one has seen what AQL is, how it works and how to succeed in AQL-based inspections, it is equally important to look at the other side of the coin, that is, what AQL is not. AQL is NOT: A permit to ship defective goods to the tune of agreed AQL: AQL 4.0 does not mean that supplier has a right to send up to 4% defective merchandise to customer/buyer. A guarantee that all shipments passed as per AQL plan will definitely contain lower percent defective than the specified AQL. There is also no guarantee that lots with higher percentage defective will not pass on AQL based inspection. An indicator of the quality level achieved by a manufacturer. Let us assume that the average rate of defective garments in a

manufacturer's shipment is 6%, but the AQL used by buyer for final inspection is 2.5. It is possible that the manufacturer may resort to 100% inspection of the merchandise to weed out the defective garments so that the shipment can pass the final inspection by the buyer at AQL 2.5.

Brief History of AQL and Acceptance sampling Acceptance Sampling is an important field of statistical quality control that was popularised by Dodge and Roming and originally applied by the US military for the testing of bullets during World War II. If every bullet was tested in advance, no bullets would be left to ship. If, on the other hand, none were tested, malfunctions might occur in the field of battle, with potentially disastrous results. Acceptance Sampling plans help in distinguishing between the acceptable and the unacceptable lots. The basic assumption here is if the proportionate sample is randomly drawn from a lot, the sample would represent the quality level of the lot and based on this the acceptance decision can be made. Acceptance Sampling is the middle of the road approach between 100 per cent inspection and no inspection. Based on the extensive work by the American military during and past World War II, the US Government issued the standard for sampling procedure and tables for inspection called MIL-STD-105D in 1963. This was further modified in 1989 as MIL-STD 105 E and re-designated as ANSI/ ASQC Z 1.4 in February 1995. For all the practical purposes MIL-STD-105D and ANSI/ASQC Z 1.4 are almost similar. For the purpose of Acceptance Sampling inspection in the garment industry, most buyers refer to the tables from either of these standards. Though the garment industry generally uses the normal level on inspection, the standards also provide for reduced and tightened inspections based on the past performance of the supplier.