10 Formulas for Production Calculation in the Apparel Industry

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You might be using formula for calculating standard time or labour productivity or labour cost per minute. There are many such common measures we need to calculate everyday for preparing daily reports and measuring performance in various parameters. In this article we will try to understand how the basic performance measures are calculated and formulas that are used for calculating those measures.

In the apparel industry, industrial engineers, production managers and production planners measure the factory performance on daily basis by following standard formula for each measure. You might be already using such formulas for calculating your factory performance. For example, industrial engineers
  • prepare OB sheet, 
  • measure key performance indicators (KPIs)
  • prepare daily reports on factory performance, and 
  • line performance in terms of productivity and efficiency. 
They also measure line capacity as well as individual operator capacity in the given hours. All these are essential for production management, balancing work and planning production and manpower.
production formula

As these are common measures in apparel production, most of the factories use excel templates preparing such reports and calculations where the excel template are pre-filled with formula. We just follow the report template. We don’t need to calculate every time we make a report. So, many times we are not clear about how to calculate a particular measure.

Let’s discuss 10 basic production measures and formula used calculating those measures.

1. Hourly production target


Hourly production target calculation is a part of an OB and daily production report. Hourly production target is calculated for individual operators as well as for a line as needed. In an OB production target is calculated for each operations. Following formula is used to calculate hourly target.

Hourly production target = (60 / Operation SAM)
Note: This target is calculated at 100% efficiency. In case you want to plan hourly production target at certain percentage, multiply the above by line efficiency / individual operator efficiency based on your need.

In the table-1 few examples are shown for calculating hourly production target at 100% efficiency.

Table-1: Examples of hourly target calculation
Sl. No.
Operation
SAM
Hourly Target (60/SAM)
1
operation-1
0.78
76.92
2
operation-2
0.85
70.59
3
operation-3
1.2
50.00
4
operation-4
0.9
66.67


2. Daily Line Target


Like the hourly production target, daily production target of a line is calculated. This target is given to line supervisors. Based on the daily production target production planning and total production time needed to complete an order is calculated. Following formula is used to calculate daily line target. 

Daily Line Target = (Shift hours X 60 X No. of operators working in a line X Line efficiency %) /Garment SAM

See the example in the following table

Table-2: Daily production target calculation
Line no
Manpower
Shift hours
Average line eff%
Garment SAM
Daily production Target
1
40
8
65%
30
416.0
2
40
8
60%
24
480.0
3
42
8
62%
42
297.6
4
46
8
58%
38
337.0


3. Individual operator efficiency


We measure individual operator’s performance (efficiency %) for operator grading, skill matrix, and daily employee performance reporting. In case you are distributing performance based incentives to individual operators, you need to measure individual operator efficiency too. This is the formula to calculate individual operator efficiency.

Individual operator Efficiency% = (Total minutes produced*100/Total minutes worked)
Where,
Total minutes produced = Total units produced X operation SAM

See the following examples (table-3) for calculating individual operator efficiency. In case an operator is doing more than one operation, first calculate total minutes produced in each operation and sum up total minutes produced in all operations by an employee.

Table-3: Examples of individual operator efficiency calculation
Sl. No.
Operators
Operation
SAM
Unit produced
Hours worked
Efficiency%
1
Operator-1
operation-1
0.78
500
8
81%
2
Operator-2
operation-2
0.85
480
8
85%
3
Operator-3
operation-3
1.2
300
8
75%
4
Operator-4
operation-4
0.9
480
8
90%


4. Line Efficiency


Line efficiency is the common measure for measuring line performance and factory performance. Performance of a production line vary depending on operators’ skills, product design, line balancing, presence of lost time, style run time and many other factors. A better efficiency means higher output and reduced production cost. So we aim to improve line efficiency as much as possible. Line efficiency is calculated using following formula. 

Line Efficiency% = (Total minutes produced *100) / (Total hours worked * 60)
Where, Total minutes produced by the line = Line output X Garment SAM

Total hours worked by the line = Number of operators X Shift hours

Table-4: Examples of line efficiency calculation
Sl. No.
Line
Style
SAM
Units produced
No. of manpower
Hours worked
Efficiency%
1
Line-1
Style-1
24
400
25
8
80%
2
Line-2
Style-2
30
480
35
8
86%
3
Line-3
Style-3
12
300
20
8
38%
4
Line-4
Style-4
20
500
35
8
60%


Note: Include helpers and worker doing manual operations in the manpower, in case SAM of the manual operations are included in garment SAM.

The above mentioned formula is used majorly used for line efficiency calculation. This is known as output based line efficiency. Line efficiency can be also measured in a different way. Instead of line output data, individual operators produced minutes and hours worked are calculated first and later their produced minutes and hours worked are summed up to calculated line’s produced minutes and total hours worked. To many this is not easy to calculate individual operators output, their total produced minutes and actual hours they worked in a day. Following the second method is only practical if a factory is using real time production tracing system.

5. Machine Productivity


Machine productivity is measured to know the average production per machine per day or in the defined time frame. A line with 48 machines producing 480 shirts and another line with 36 machines producing 400 shirts (same design). How do you figure out which line doing better? This can be answered simply by measuring machine productivity.

Productivity is the ratio of output and input. Machine productivity of a production line is calculated using following formula.

Machine Productivity= Line output / No. of machine used

Machine productivity is measured as production per machine per shift day. See the following example (Table-5).

Table-5: Example of machine productivity calculation
Sl. No.
Line
Machines used
Production
Machine productivity
1
Line-1
48
480
10
2
Line-2
36
450
12.50
3
Line-3
36
420
11.67


6. Labour Productivity


Productivity is also measured as labour productivity. Instead of machine input in this case line output is divided by labour input to calculate labour productivity. 

Labour Productivity = Line output / No. of total manpower (operators +helpers)


7. Standard Time Estimation


Standard time is the time allowed to an operator to carry out the specified task under specified condition and defined level of performance. This is a standard definition for standard time. Some additional time is added to basic time to arrive standard time of a task. In practice none can work throughout the day without taking rest. Operators need time for relaxation from fatigue. Various allowances are relaxation allowance, contingency allowance (like machine breakdown) and bundle allowance (for PBS system). 

Standard Time = (Observed time X observed rating) + Allowances


Allowances includes Relaxation allowance, contingency allowance

The basic constituents of standard time are shown in the following chart. This chart shows how standard time is made up from observed time and basic time of a job.

Chart-1: This chart shows how standard time is made up. Source: Introduction to work study by ILO

8. Machine utilization percentage


Machines and equipment are primary resources of garment manufacturing unit. These resources must be utilized as much as possible to improvise factory performance. But due to work unavailability or less work, some machines (like specialized machines) are partially utilized by the factory. In such case, same machine is shared for multiple lines. Machine utilization is calculated using below formula.

Machine utilization% = (Actual machine running time X 100) / Time available
If you are running one of your special machines only 4 hours in 8 hours day, utilization of that particular machine would be 50%.

9. Labour cost per unit


Labour cost is part of garment FOB. For every order we have a target labour cost. We need to track the actual labour cost and control it. So we measure it after a style is loaded. Here is the formula to calculate labour cost per garment.

Labour cost pet unit = (Total cost incurred in labour wages / No. of garments produced) in a day


10. Production capacity


Production capacity is measured in available minutes as well as in number of pieces. First we will see how available minutes in a line are calculated. Then we will calculate capacity in number of pieces.

Line capacity per day= {(No. of machine x daily work hours x 60)*(1 – absenteeism %)} x Efficiency % (capacity in minutes)
Production capacity (in pieces) = Available minutes / Garment SAM

Table-6: Example of production capacity calculation
No.
No. of Machines
Minutes/Day (Daily working Hrs. X 60)
Line Efficiency
Absenteeism %
Capacity available (in minutes)
Garment SAM
Production capacity (pieces)
Line 1
30
480
60%
10%
7776.00
15
518.40
Line 2
28
480
72%
8%
8902.66
20
445.13
Line 3
32
480
65%
9%
9085.44
20
454.27
Line 4
32
480
55%
10%
7603.20
20
380.16

Conclusion:


Like other garment manufacturing units, you might be also measuring some key production measures to keep track of production performance and controlling the production. Whatever measures and formula you are using must be standardized and approved by the authorized person internally. Also everyone in an organization should be aware how the particular measures are calculated. It is good to have a poster of commonly used formulas and keep the poster in your work space. A poster would be helpful for learning for newcomers.

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Online Clothing Study: 10 Formulas for Production Calculation in the Apparel Industry
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Common production measures and their formula.
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