Garment CM Cost Estimation using SAM

SHARE:

Estimate garment cost, cut to make cost using standard minutes.

In the clothing manufacturing, supplier gives final manufacturing cost to a buyer prior to order confirmation. For that factory prepares cost sheet estimating costs in different cost heads. Cost heads like Fabric, Trims and Packing Materials, Labor cost, and Overheads.

At costing stage, supplier only gets one sample of the garment and specification of fabric and trims for the reference. For raw material cost suppliers directly take price quote from fabric and trim suppliers. For labor cost, it is very important to estimate as near as it will be during actual production.

The scientific method for estimating CM (Cut and make) cost of a garment involves following steps

How to calculate the minute cost of the operator?


Formula:

#1. Labor cost per minute = (Monthly salary of an operators/Total minutes available in the month) at 100% efficiency.

But no line can perform at 100% efficiency, so labor cost per minute increases when line efficiency goes down. So correct way to calculate labor cost per minute is

#2. Labor cost per minute = Total salary of the labors in a month / Total SAM produced by those labors in that month.

Example:

Operator monthly salary is INR 5000.00

Total available capacity per month (in minute) = 26 working days*8 hours/day*60=12,480 minutes

So, per minute cost of the direct labor = 5000/12480 = 0.4006 INR at 100% efficiency

Formula for the projected labor cost per pieces


CM cost = (SAM of the garment * Minute cost of the labor)/Line efficiency(%)

(Minute cost determined from above formula#1. If you use the second formula then don't divide by line efficiency)

If Sewing SAM is 15 minutes and line perform at 50% efficiency then estimated garment make cost = 15*0.40/50% =12 INR

And Cutting SAM is 2 minutes and cutting room perform at 50% efficiency then estimated cutting cost = 2*0.40/50%=1.6 INR

So, Total estimated CM cost of the garment = (12.00+1.60) = 13.60 INR

Following above formula easily one can estimate garment CM cost and use it for the product costing.

Why do you need to consider line efficiency in CM costing?


Line output varies depending on the line efficiency. When a line performs at lower efficiency than standard (100%) line will produce fewer units in a day compared to what line could make at 100% efficiency. But factory spends the same amount of money as salary whether line performs at 100% efficiency or less. So, per unit cost will increase when line performs at lower efficiency.

Note: For the calculation of labor cost per minute, instead of average operator salary you can take cumulative of all operators salary (monthly) and divide total amounts by total minute available to the line (total operator * total minutes per operator per month) to have more accurate value.

Related Articles:

Actual Garment Production Cost – The way factory calculates it
How to Calculate Raw Material Cost for Garments?
Garment Production Cost: Actual Cost Vs Cost Per SAM
Cost breakdown of a Men's woven shirt sold in USA market
Costing and negotiation skills for merchandisers

[post_ads_2]

COMMENTS

You may also like

Name

5S,3,Activewear,1,Apparel ERP,1,apparel industry,56,apparel news,33,Apparel Production,31,Apparel Software,17,Bamboo Fabric,1,Bangladesh,1,Blogs,1,Books,31,Business Guides,9,Buyer,1,Buying House,4,CAD/CAM,1,Calculation & Formula,1,career,34,Change Management,1,Clothing,2,Clothing Brand,3,Compliance,3,Consumption,4,Costing,7,Cutting,18,Denim,3,Directory,3,Dyeing,1,eCommerce,2,Education,5,Event & Fair,14,Fabric,73,Fashion,5,Fashion Business,38,Fashion Design,3,Fashion Show,1,Fiber,1,Finishing,10,Garment Exporters,1,Garmenting,2,Gartex,1,GSM,1,Guest Post,8,Human Resource,2,Industrial Engineering,211,Infographic,5,Knitting,3,Kurti,1,Lean,27,Line layout,3,Machines,30,Manufacturing,51,Merchandising,105,MIS,23,MISC,20,Operation bulletin,14,Operator,1,Operator Training,1,Performance rating,1,PLM,3,Printing & Embroidery,11,Problem Solving,1,Production Planning,27,Project Report,1,QNA,121,Quality,61,Quality manual,2,Quality system,14,Research project,1,Resources,43,Retailing,4,Salary & Wages,7,Sampling,22,Scheduling,3,Sourcing,8,Spec Sheet,9,Sportswear,3,Stitching,3,Store,2,Stretch fabric,1,Student corner,1,sustainable clothing,7,T-shirt,3,Tailor,1,Tailoring Shop,2,Technology,58,Texprocess,1,Textile processing,11,Textile testing,23,Textiles,42,Threads,1,Towel,1,Trims & Accessories,15,videos,11,Waste,1,Work Study,38,Yoga wear,1,
ltr
item
Online Clothing Study: Garment CM Cost Estimation using SAM
Garment CM Cost Estimation using SAM
Estimate garment cost, cut to make cost using standard minutes.
Online Clothing Study
http://www.onlineclothingstudy.com/2011/02/garment-cm-cost-estimation-using-sam-or.html
http://www.onlineclothingstudy.com/
http://www.onlineclothingstudy.com/
http://www.onlineclothingstudy.com/2011/02/garment-cm-cost-estimation-using-sam-or.html
true
6551124471002606808
UTF-8
Loaded All Posts Not found any posts VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES POSTS View All RECOMMENDED FOR YOU LABEL ARCHIVE SEARCH ALL POSTS Not found any post match with your request Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock Copy All Code Select All Code All codes were copied to your clipboard Can not copy the codes / texts, please press [CTRL]+[C] (or CMD+C with Mac) to copy