Reduce Factory Overhead Expenses by Using Technology Solutions

How to reduce factory overhead expenses in garment factory

In 2021, garment manufacturing companies are working with the new normal. Factories are following the social distancing at the production floor, wearing masks, and reduced direct contact. Sometimes back factories needed to work with a reduced workforce to avoid gathering on the floor so that factories can easily manage social distancing.

Since last year, many manufacturers and exporters have faced the loss of regular export orders due to pandemics. We all are aware of these. Production capacity is not being used in full as there is a shortage of orders. So, this is the time to reduce the factory running cost and overhead cost. As a consequence everyone trying to reduce their expenses and direct and indirect overheads.

In this situation for performing better and maintaining the bottom line what can be done?

We understand the situation - factories need to keep running with less order with minimum manpower (administrative staff) and this is the new normal of the industry.

Working with less manpower has a positive side as well. Factories will learn how to manage their work without keeping assistants and sub-assistants in all the departments.

I visited garment manufacturing factories in countries like Turkey, Sri Lanka, Bulgaria, and Cambodia. Companies in those countries don’t keep office boys and pantry boys for giving tea and coffees to the office staff. They don’t keep employees for refilling staff's empty water bottles. All the staffs do these jobs by themselves.

In one factory, I had seen auto-dispensing machines for snacks, cold drinks, chocolates in the pantry and office lobby area like the one we see in the airports. Anyone can pay and buy the snacks. No need to go outside. No need to take someone’s help for buying your meal and snacks. The water dispenser, coffee makers, and tea maker machines are common now in offices in India. So, no need for an office boy for tea making.

In India, garment factories used to keep pantry boys for making tea, serving tea, and filling up water bottles. Someone is utilized for bringing food from the market and heating the food during lunch. Now mobile apps can be used for food orders instead of sending someone outside to bring lunch for staff and guests from nearby shops.

Let's come to the point of how technology solutions can help reduce manufacturing costs.

Technology for saving time and manpower in a factory

If we look into some moderate garment factories, most of them use some level of automation and technology solutions in their production processes. Those who utilize the software and systems can see the benefits.

Few common solutions that directly reduce manpower in a garment factory and saving in process time include -
  • Pattern making and sampling room (CAD system, 3D sampling, and digital sample submission)
  • Automation in cutting room (Auto spreading machine, automatic fabric cutting machine)
  • An ERP for raw material and inventory management
  • Attendance and payroll system
  • Production and finishing area – automation in data capturing and digitalization of data.
  • Cloud-based quality control applications and quality management systems.

Garment companies those yet not have automation in their factories can think of investing in technology upgradation. It might be surprising to many that there is a rise in investment in digital solutions (IoT technologies) in the apparel manufacturing sector after the pandemic.

If a factory purchases hi-tech solutions but employees do not utilize them – it is a bad investment.

Improve employee skill and reduce training cycle time

Technology can help improving workers' skills in a shorter time period and increase workers' performance. There are sophisticated and affordable systems and applications that can track operators’ performance and give them feedback in real-time. This technology can self-motivate each worker on the floor. When you have a skilled workforce, you will have better floor performance. This in turn will reduce the overhead cost per produced garment.

There is a technology solution, named augmented reality (AR), that can be used in training machine technicians and sewing operators. AR technology can be also used in repairing special machines when they broke down and you need assistance from an outside vendor.

Technology can help in reducing OT hours (indirectly)

Another reason for additional overhead costs in factories is excessive OT working hours. If you can reduce/eliminate OT working hours, you can save money by not paying OT premiums or food allowances. This is a major issue in developing countries. Better scheduling (achievable production plan) of production orders and executing it smartly can help eliminating OT hours.

But many say that our workers prefer to work OT as they get an opportunity to earn extra money by doing overtime. A production manager or a factory owner uses a production planning system that could help in scheduling orders as per daily production capacity. Use solutions that can help your manager and supervisors executing their floor through real-time production and quality data. Reduced OT hours result in lesser overhead expenses.

Technology for better planning considering a wide range of variables

Planning is done and we fail to follow the plan. Use technology for auto alerts for pending and delayed tasks. Make an accurate schedule – force all team members to adhere to the schedule by sending auto-notifications and auto alerts. 

You know production planning is done considering numerous variables and algorithms. In a spreadsheet and paper, we can't make complete capacity planning and work scheduling of orders - while each order will be in different stages - each team will be struggling with different issues. There are dependencies between processes that are unique for each order. Such a complex production environment - knowing the real-time capacity of the floor (which is very much dynamic), resource availability, and movement of the orders. 

Automated MIS reports and management KPI dashboards help in production follow-up and improve production execution. That, in turn, reduces faster production completion and the lesser quality issues in the production stage.

Related Read: Latest technology solutions for the garment industry

Energy saving in the factory:

You can save monthly expenses by saving electricity (energy consumption) in your factory. One way of installing microwave sensor led lights. There are three customizable sensor controls - Illumination (LUX), Sensitivity of motions, Light on time duration. This sensor control auto power on/off led bulbs and tubes in the office areas, meeting rooms, pantry, washrooms. All the places where you don’t need lights all the time. Check more about the microwave sensor lights on this page.

Use the light when someone enters that area. No need to switch on/off every time. This technology is common in European countries. I have seen this power-saving technology in garment factories in Turkey and Bulgaria. Even you can increase the brightness of the light in a room as per your requirement by using a remote control. The technology you might have seen in some international airports.

Factories can save more than 50% energy consumption by using power-saving servo motors in sewing machines (Source).


In this article, I have shared some random ideas. These are real technologies that can help garment factories saving expenses and can reduce overhead costs. Newer technologies are coming up in modernizing garment manufacturing plants. Explore the technology area that can be implemented in apparel manufacturing plants. As per the study by ISG firm manufacturers vigorously reassess their digital strategies and look for ways to lessen their dependency on production and delivery locations (source:

Prasanta Sarkar

Prasanta Sarkar is a textile engineer and a postgraduate in fashion technology from NIFT, New Delhi, India. He has authored 6 books in the field of garment manufacturing technology, garment business setup, and industrial engineering. He loves writing how-to guide articles in the fashion industry niche. He has been working in the apparel manufacturing industry since 2006. He has visited garment factories in many countries and implemented process improvement projects in numerous garment units in different continents including Asia, Europe, and South Africa. He is the founder and editor of the Online Clothing Study Blog.

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