Garment Costinga

7/30/2019 Garment Costinga

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Arriving at the final price to be quoted to the buyer /retailer

It is the responsibility of marketing merchant


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Merchant

CAD

PurchaseSpecialprocess

departments

IED


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Fabric cost

Shell

Lining

Trims

buttons

Threads

Labels

Process

Cut, sew&finish

Specialprocess

Otheroverheads

Marketing Accounts &

administration


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How much is the consumption

Marker Obtained from CAD

What is the Cost per Meter

Data either given by fabric sourcing or mined from data base

Confirming cost with fabric mill if necessary

Wastages How much wastage need to be taken (normally in % terms)

Based on merchants experience and type of product


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At the time of order confirmation retailer is notproviding the size wise ratio. Now the CADdepartment asks you to advise won the ratio and theno. of ways for costing marker

What will be your decision?

Costing marker is the initial marker given by CAD todetermine the fabric consumption for cost quotation

Subsequently different markers will be developed byCAD which are called as production markers


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First mode of deciding Choose medium or large size and go for 4 or 5 way marker

Total marker length / no. of ways will give the fabricconsumption per garment

Is this enough Have you accounted for fabric shrinkage?

Can ask CAD to incorporate shrinkage into patterns What is the shrinkage % to add?

Either by experience or by testing

Will the costing marker be able to cover up even whendifferent markers need to be developed in different sizeratios


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Second mode of deciding

Check for previous orders

Are you able to detect a pattern in terms of size ratio?

If yes then follow the previous size ratios Do we have to add some percentage extra here?

There is every chance that buyer might tweak the ratiosso better have some buffer here


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Do I have to order extra fabric? Yes, because of Buyers allow exporter to ship extra % (anywhere

between 2-5%).Opportunity to earn more Penalties which buyer will impose if we fail to fulfill the

order below a certain percentage (say 97% or so)

How much extra to order? Process / styling difficulties

Over dyeing results in 8% rejections. So better cut 8% extra

and order fabric according to that Styles which have embroidery done on printing have more

chances of rejection as placement of embroidery & printtogether is difficult to achieve

Allowance given by buyer


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Labels

Usually nominated suppliers

Cost taken from data base

Interlining

Separate marker for interlining

Given by CAD

Laces Normally purchased in meters

Consumption given either by pattern master or IED


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Buttons

Manual count by merchant

Care to be taken to count extra buttons to be provided

Embroidery thread

Given by embroidery planner / designer

To be purchased in cones of 1000 /3000/5000 meters

Finishing accessories Carton box, carton dividers, matchbook ticket ,hanger

Sizer, poly bag (individual & master poly bags)


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Different type of threads used for differentOperations

Normally top stitching thread needs to be prominentlyvisible . So thicket thread is used

Overlock machines require different ticket sizecompared to single needle lock stitch machines

Finer threads are required for blind hem operations

Few operations need to be done with filament threads

Merchant does not have the time to analyze all this Merchants responsibility is to handover the garment

and the techpack to IED for thread consumption


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Operation

MC Top /Needlethreadratio

Bottom /bobbin/looperthread

ratio

Operationsew length

Topthreadconsumption

Bottomthreadconsumption

TopthreadTkt no

BottomthreadTkt no


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Can I trust the consumption given IED might give higher consumption to mask operation

inefficiencies / higher wastages in production floor Dead stock will be created because of excess consumption

calculation

Is there any way to avoid dead stock of threads Question the wastage percent taken

Often 15% wastage taken for threads without considering the orderquantity, color wise quantity

15% wastage is correct only for smaller order quantities with lot ofcolors

Order only 80% of the total thread requirement first. No onein production will keep track of threads. Check when theorder nears to the end for extra thread requirement and orderbased on the current consumption based on production andtotal cones utilized This is possible only if threads are locally sourced


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Elastic threads

Can be imported Lead time of 15 days

Smocking threads Glossy threads

Matching shades will be a problem if we have to purchaseagain

Beads & sequences Either by count or by weight

IED is responsible


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Style 1 Style 2


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Style 1

No pocket

No flap

No plaid matching

2 pockets

2 flaps

Plaid matching at front

2 way plaid matching

Flap & pocket plaids

match to front

Style 2


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Pre requirements to calculate production cost

Merchant is responsible to produce a garment made ofeither actual or substitute fabric

Need to give techpack along with the garment There are 3 ways to arrive at the production cost


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Merchant shows the garment to GM / factory manager/Production manager

Based on their experience productivity commitment istaken (Commitment either given by GM/ FM /PM)

Time taken for one garment is = 8 (hrs)/ Productivity(pcs)

Accounts / Finance department would give MC Hour

Rate MC Hour Rate = ( Total cost of running the factory per

day) / (total no. of sewing machines x hours per shift)

Production cost = Time in Hrs X MC Hour Rate


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Committed productivity is 6pcs per MC

MC Hour Rate is Rs 115

Time taken per garment is =(8/6) = 1.33 Hrs

Production cost = 1.33 X 115= 152.95 Rs


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IED provides SMV or SAM value

Based on past data of total SMV / SAM produced andthe total expenses incurred cost / SAMdata will beprovided by accounts department

Total SAM for garment x cost / SAM = Total cost ofproduction


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Total SAM for garmentgiven by IED is 45minutes

Cost / SAM given byaccounts / finance is 3 Rs

Total production cost =45*3 = 135 Rs


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Both methods calculated total cost based on thesewing content only

But in practical view point few styles are difficult to cutand few types of finish / packing is difficult

The time taken to cut a plaid shirt with matching andthe time taken to cut a solid shirt which has nomatching parameters are different

Stand up pack for shirt takes more time than hangerpack

Now how to accommodate these concerns?


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If possible better to workout the content of eachdepartment separately

Each department cost is to be analyzed and rates to befixed per hour

Estimation of time to be taken per garment is done foreach department

Adding up the individual department costs will

provide an accurate cost estimation of production


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Cut time estimation is 3.5 mins Sewing time estimation is 48 mins

Finishing time estimation is 8 mins

Cut work center rate is 100 Rs

Sew work center rate is 60Rs Finish work center rate is 80 Rs

Cut cost = 3.5 X (100/60) = 5.83 Rs

Sew cost = 48 X (60/60) = 48 Rs

Finish cost = 8 X (80/60) = 10.67 Rs Total production cost = 5.83 +48

+10.67 = 64.5 Rs


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Merchants responsibility to providesample with correct wash effect

Washing cost is determined by thewashing team based on Type of wash needed Feel & look of wash Tinting is required or not Weight of the garment

Different wash types have different costs/ Kg Softener wash : 30 Rs /Kg Enzyme Softener wash : 45 Rs/ Kg Reactive dyeing : 100 Rs /Kg Pigment & reactive dyeing : 130 Rs/ Kg


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Merchant has to providesample / artwork toembroidery department

Design is developed usingsoftware

Total no. of stitches isprovided by software Cost is calculated based on

1000 stitches Normal cost taken for single

color embroidery is 0.9 Rs /1000 stitches

This can go up to 1.2 Rs / 1000if no. of colors go high & no.of framings required is more


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Merchant has to providesample to either in-house printing in chargeor to the subcontractor

Printing costs vary basedon Wet Vs Dry prints Direct Vs Discharge Vs

Resist printing Rotary screen Vs Flat

screen Vs Transfer VsDigital printing


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Trial and error basis Need to get quotation from

different subcontractors Vendors production

capacity is an importantfactor

Cost is based on no. ofbead / sequin to beattached

Cost can be reduced byreducing the no. of knotsrequired to finish thedesign


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Few other special processes for which merchant mighthave to determine cost. They are Fraying of edges (intentional)

Smocking (if in-house factory does not have machines)

Braiding of draw cords

Special types of stitching machines (if machines are notavailable with in-house) Picot

Fagoting Zigzag


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Marketing overheads

Finance, accounts & distribution overheads

All these overheads are calculated as a percentage of

total turn over(i.e based on FOB)


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Indian government offers duty drawbacks if the fabricis purchased domestically

This drawback varies based on the fiber content anddifferent fabric have different duty drawbacks

Indian government pays the exporter a percentage ofthe FOB value for using domestic fabrics

This duty drawback needs to be subtracted from the

cost to arrive at total cost of garment


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FABRIC COST

TRIMS COST

PRODUCTION + SPECIAL PROCESS COSTOVERHEADS

DUTY DRAWBACK

PROFIT PERCENTAGE

FINAL PRICE QUOTED TO BUYER


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Cost sheet is a document in which all the cost are listedand the final price that is to be quoted to the buyer iscalculated

Cost sheet is prepared by merchants and signed offeither by their division mangers or CEOs or the MDdepending on the organization


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Documents

Garment Costinga