“Garment Costing”
The objective of the Program
Facilitator :
Productivity
• Do you know about Productivity?
• It is Ratio of OUTPUT and INPUT
• It is the main factor to be measured in an
organization.
There are some misconception of
productivity
1 Production & Productivity
2. Working hard & productivity
**Controls of resources are very
important to increase productivity.
**We can use IE and Work-Study
Techniques to control resources
What are the main resources to
be controlled……
• Man power
Machinery
Material
Method & Techniques
Land, Floor area
etc
WHAT IS WORK-STUDY?
• ®Work-study is a management
techniques to investigate all factors, which
are affecting to the productivity.
There are two Techniques of
Work Study
• 1. Method Study
• 2. Work Measurement
Method Study
• Method Study is the Systematic recording &
critical examination of existing & proposed
way of doing works as a means developing &
applying easier &more effective methods and
reducing cost
ILO- International Labour Office Geneva - INTRODUCTION TO
WORK STUDY
General Sewing Cycle
Handling Time
Stitching Time
Steps of a Method Study
• Select - operation/Process to be studied
• Record - all relative facts
• Examine - critically analyzing the
current method
• Develop - old / selected method
• Define - the new method properly
• Implement- the new method
• Maintain - routine check
Pre-consideration
• Economical Consideration
• Technical Consideration
• Human Reaction
Following Techniques are very
important in Method Study
• Motion Economy
• Ergonomics & Engineering Design
• PMTS (Pre-determined Motion Time
System, e.g. GSD)
• 5S
• KAIZEN
Main Responsibilities of a Work
Study officer/Engineer
• Establish correct method
• Establish correct Time standard
• Achieve real performance of the worker
Three factors affecting to the
worker's performance
• 1. Skill Training
• 2. Effort
Physical giving medical & food facilities etc
Mental motivation, counseling
• 3. Condition
Improve working conditions using
industrial engineering techniques.
***** Off Std factors
• 1. No work
• 2. Damage repair
• 3. Machine, tools, equipment breakage
• 4. Cannot work due to no power or any other
relative resources
• 5. Waiting for instructions
• 6. etc
Work Measurement
Accessing human effectiveness of the
Work
Following main important parameters of the
Garment Industries are based on the SMV
• CPM – Cost Per Minute
• CM - Cut and Make Price ( Labour Cost)
• Factory Capacity
• Line Loading and Shipment Plan
• Factory Efficiency
• Line Efficiency
• Workers Efficiency
• Workers,Line,Factory Target
• Workers Motivational Payments-Incentive, Best Line,
Best Worker
What is the meaning of SMV
• Meaning of the Abbreviation- Standard Minute Value
• It should be expressed always in Minutes
• Time taken by a standard operator to complete any
given operation/s with pre-defined conditions
• BSI 100= 100% performance operator is the standard
operator
A standard operator is one who is accepted
as having the necessary physical attributes,
who possesses the required intelligence and
education and has acquired the necessary
skill and knowledge to carry out the work in
hand to satisfactory standards of safety,
quantity and quality. We have to compare
our operatives with the standard operatives
and rate them accordingly.
What are the Parameter to be considered
when giving SMV for an operation
• Handling– pick-up, Aligning, Dispose, Tool
use, Machine Handling etc
• Sewing –
»[Link] RPM, SPI/SPC and mc
Features
»2. Seam Length
»3. Seam Type – (Visible/ Invisible,
Straight,Curved, etc)
What are the Parameter to be considered
when giving SMV for an operation cont..
4. Stopping Accuracy
(End back tack,Pivot, Runoff..etc)
5. Attachment Use
(Folders,[Link])
6. Personal, Machine Effectiveness
Can SMV changed in same operation with any
conditioned?
• SMV can be changed by following factors
– 1. Method ( Pickup, Aligning, No of Burst, Machine
handling, Dispose, Attachment)
– 2. Machinery Condition (Machine features, RPM,
SPI/SPC,..etc)
– 3. Environment Condition ( Temperature, Noisy
level, any fatigue factors..etc)
SMV-Standard Minute Value
• SMV = BT + ALLOWANCES
• Direct Basic Time can be generated by GSD
or any PMTS versions.
In Stop watch Time study
• BT = OT X OR BT- BASIC TIME
OT- OBSERVED TIME
OR- SR =100 RATING
OBSERVED
SR- STANDARD RATING
M achine Allowances
Type of Machine Allowances Remarks
SNLS 12.50%
SNCS 7.50%
DNLS 17.50%
DNCS 9.00%
SNOL/3OL 7.50%
DNOL/4OL 8.50%
DNOL/5OL 9.00%
3FL 7.50%
4FL 8.50%
5FL 9.00%
BH 12.50%
BALS 12.50%
BACS 7.50%
BTK 5.00%
MNCS Add 1.5% per needle to the SNCS
Picot/Scallop 7.50%
ZigZag 12.50%
Other M/C 2.00% Fusing/Pressing ..etc
Personnel & Fatigue Allowances
Personnel Allowances 7.50%
Standing Allowances 4.00%
Policy Allowances 3% (Gamini
Use to high Ndl Brk)
Wijekoon for Heavy materials
Contingency 2% No A/C Situation
TARGET????
• Operator TARGET per Hour = 60/SMV
• Line Target per day= OP X WM
SMV
• Line Target Efficiency level
• = OP X WM x Eff
SMV
PMTS -Predetermined Motion
Time System
• PMTS can be used as a work measurement Technique,
Tool for setting of TIME STANDARDS
There are common versions,
• MTM1,2,3 [Established in 1940(350codes), 1965 (39
codes),1970 (10 codes)
• GSD (General Sewing Data) Established in 1971-
specially designed for the needle trade work. (36
codes)
Basic Process in Garment Industry
Shareholders Expectation..
Customer Profitability
SPM US $
Sales in $ 000 SAH '000
cents GP
% of Margi
Customer T/O n
Budget Last year Budget Last year Budget Last year %
Others
Total
Some more……
Employee Expectations….
Service to the Nation (CSR)
Government Expectation, Role in
global environment
Legal Requirements………
Fair Trade…………………..
System perspective to garment costing
INPUT What are the OUTPUT
(Costing)
inputs PROCESS
required?
Input requirement for costing
1. Product Package Analysis
2. Name of different parts of the garment and discuss
with specification sheet.
3. Fabric consumption of the garment.
4. Pattern-Check for counter check of the fabric
consumption for accuracy.
5. Exercise on Fabric Consumption.
6. Techniques of doing Accessories Consumption and
Costing.
7. Points to be considered for Costing of Printing.
8. Points to be considered to do costing for Embroidery.
9. Points to be considered for costing of Washing.
10. How to assess Cost of Making of any Garments?
11. What are FOB, C&F and CIF Costing?
12. How to asses C&F price of any Garments?
13. How to do Garments Costing considering all factors?
14. How to Quote Price?
15. How to negotiate and confirm price with Buyer?
Wow…… Cup of tea????
Cost Per Minute (CPM)
Use of CPM
• Garment Costing, Calculating C&M (Cut and
Make price)
• Calculating of financial parameters. PBP
• View of organization current status
(Financial and Operational)
CPM is one of the main parameter in an Organization
CPM Calculation
• CPM= Total Expenses
Total Direct Working Minutes
CPSM= Total Expenses
Total Direct Earned standard Minutes
Cost & Expenses
Total Expenses of the year = Direct wages + Indirect Wages + Over
Heads + Extra Ordinary cost + Cost of Capital
Total Direct Working Minute = No of Machine Operators x Working
hrs of the year x 60
Use all forecast values to calculate CPM forecast, And use actual values
of the past years to get the actual CPM
There are Input and Out Put
CPM is an Input Value,
Values
Out Put Value of this is..
CPSM
Cost Per Standard Minute
Concept
• Manufacturing Plant is producing Standard
Minutes
(or SAH- Standard Allocated Hours)
• Use Working Minutes to Produce Standard
Minutes
• Efficiency is the most important factor which is
the ratio between Earned SAH and Worked
Hrs,
ie. The Utilization of Working minutes
Graphical Illustration of CPM & CPSM
with Efficiency
0.14 CPM CPSM Forecast CPSM
0.12
0.10
Forecast CPSM
0.08
CPSM Actual
0.06
Forecast CPM
0.04
0.02
0.00
50% 55% 60% 65% 70% 75% 80% 85%
CPM,CPSM, Eff , SMV
• CM = CPSM x SMV
• CPSM=CPM/Efficiency
• CM= CPM x SMV /Efficiency
How can do a proper costing
• Make a data base to forecast efficiency
factor with considering
1. Order Qty (Q) or No of line days (n)
2. SMV (S)
3. Other Critical effectiveness of the style (X)
• Experienced costing manager can decide the
reachable efficiency level with considering
the styles , order qtys and SMV s,
• So use the formula
CM= CPM x SMV /Efficiency
What factors to be measured
and monitored
• Calculate actual CPM of the Last year
• Forecast the CPM for this year
• Measure the actual CPM and CPSM fluctuation on monthly
basis
• If there are major deviation between forecast and actual CPM
then set the forecast CPM again.
• All costing calculations should based on the updated CPM
Main Critical Success Factors of a
Garment factory
Productivity Measurements
• 1. Efficiency, Performance (Earned SAH)
• 2. Cut Ship ratio
• 3. Labour Direct:Overall Ratio or
Direct:Indirect
• 4. Wastages
• 5. Cost Per Standard Minute
• a. Overheads
• b. extra Ordinary
• 6. Absenteeism & Labour turn Over
1. Efficiency
• Efficiency is an expression
of productivity
• It is the percentage of Total
earned Standard times and
total working manning
times
Earned Standard time x 100
Worked manning time
Affective factors of Line or
Factory Efficiency
Style Changes
Skill level of the
Workers k
rea
B
Line Management n e
h i o wn
c
Ma D p l y
Machine Break p
S u
Down o
Lost Time factors N
er
w
Po
No
g e%
ama
D
g h
Hi
Increase Values of effective
factors of Line or Factory
Style
Planning Changes
TrainingSkill level of the
Workers
Training for Line IE techniques
Managers/Supervisors ,
Technology
Line Management
(Incentives) and other
Motivation
Production
• Follow-up Efficiency
Hourly, Daily, Weekly, monthly Annually
• Find the reasons for low efficiencies
• Quick and correct solution (Quick Response) is a best management
technique.
• Find methods to increase efficiency level
• Motivate the work force, Use Incentive and other motivational Factors
• Line environment also a part of efficiency
• Scientific and Technical approach will help to increase the level of
Efficiency and quality too.
• Reduce unnecessary wastages and cost
• Follow up all critical factors
Capacity Calculation
• Parameters
– No of Direct
– No of Days working
– No of Hrs working a day
– Running efficiency
– Capacity = No of Directs x No of Working Days x
No of Hrs a day x Running Efficiency
• C = n x d x h x e -- SAH
Learning Curves ( Build –Up Curves)
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20