Conformance costs are costs incurred to ensure that products meet quality standards before they are delivered to customers. These include prevention and appraisal costs, such as raw material inspection, training, and preventive maintenance.
Non-conformance costs, on the other hand, arise when products fail to meet quality standards. These include internal and external failure costs, such as machine breakdown maintenance and customer rejections.

In the case of Mante Ltd, an increase in conformance costs from 2020 to 2021 (e.g., raw material inspection rose from 3% to 10%, training from 4% to 7%, and preventive maintenance from 2% to 8%) correlates with a significant decrease in non-conformance costs, as evidenced by the drop in customer rejections from 21% to 15%.

The relationship between conformance and non-conformance costs is crucial: by increasing spending on conformance (prevention and appraisal), Mante Ltd has reduced external failures, as shown by the lower rejection rates from customers. Additionally, spending more on preventive measures (e.g., preventive machine maintenance) has reduced machine breakdown maintenance costs, which fell from 11% to 4%.

Importance to Mante Ltd:
By focusing on conformance costs, Mante Ltd is effectively reducing the costs associated with poor quality. This strategy not only enhances its reputation for high-quality products but also leads to better financial performance as the costs of dealing with failures (both internal and external) decline. Improving quality control processes internally helps prevent defective products from reaching customers, which in turn reduces the need for rework, refunds, or warranty claims, leading to overall cost savings and customer satisfaction.