How to Control Garment Production Cost?

This article is for business owners and production managers who generally ignore looking into production data. They are unaware of how much money they are losing daily due to low-line performance. This is a case of a garment export manufacturer.

I was in a meeting discussing line efficiency, present cost per piece, and what the production people can achieve to lower down the making cost. When we started discussing the fact and figures everybody was surprised. 

Read the following figures to know what the surprising thing was.

Case Study:
Product SAM = 23 minutes (Ladies' blouse)
Hourly cost per operator = INR 24.00 approx (Operators monthly salary 5000.00 INR)
Present output (on day 4 of line loading) = 300 pieces
45 operators work 11 hours a day in producing those pieces.

So, present labor cost per piece = (Total cost of operators/number of pieces produced) 
= (40*24*11)/300 INR 
= 35.64 INR. 
It seems fine.

According to the standard minutes (SAM value of the garment), if the line performs at 100% efficiency then it would cost the factory = (24*23/60) 
= 9.20 INR per piece [cost per hour *SAM/60].

Even if the factory hits average line efficiency of 50% operator cost per pieces become = (9.2 x 100)/50 =18.40 INR. 

There is a big difference between current performance and what is expected.

Suppose the factory reach at 50% average efficiency then the factory owner can save a net 17.24 (35.64 –18.40) INR per piece. In an order of 15000 units, a factory will save approximately 258,600 INR in this order.

These figures are all actual and can be achieved if you know how to achieve the target efficiency. Now the question is how to improve the line efficiency. Total working hours in a day are fixed. You have to produce more minutes or more pieces to increase the efficiency within those hours. The initial steps to start improving line performance are listed below.

  • Increase operator utilization by balancing the line and eliminating off-standard works or minimizing lost time.
  • Train operators on specific operations to improve their skills
  • Motivate employees to perform jobs efficiently
  • Stabilize line by minimizing operator absenteeism and turnover
  • If you have a good team of industrial engineers, they can work on the above to meet your target (lowering the production cost). Otherwise, you can seek professional help. Nowadays you will find many freelancers who can help you save more money at your factory day by day.

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