Within the textile manufacturing environment, inspection is an important process which is employed in order to ensure high quality of the final products. Traditionally, this process is achieved manually which is very tedious, time consuming and labour intensive. A central problem in automatic visual inspection and computer vision is to determine the extent to which one shape differs from another. This is the key element of any inspection algorithm. Pattern recognition operations such as correlation, template matching and model based vision methods can all be viewed as techniques for determining the difference between shapes. In this paper the problem of visual inspection of deformable materials in general, and lace in particular, is considered. This is particularly difficult to achieve due to inherent and inevitable variations between a ‘model’ and the material being inspected. A mechatronic approach based on correlation along with morphological filters and ‘active vision in the loop’ using a line-scan CCD camera is presented. The utilized algorithm and its advantages and disadvantages are also discussed.