Why do garment manufacturers plan efficiency at 75 and not 100 percent?


Question: 
Why do garment manufacturers plan efficiency at 75 and not 100 percent? Would like to read views on this matter. 
-- This question was asked by Narainsamy Govindasamy in the comment box. 
Why plan efficiency at less than 100 percent

What you have observed is true. Some factories plan efficiency at 60%, some use 80% as target efficiency. The question is why not planning efficiency at 100 percent.

I have shared my views on this. I have also collected views from engineers working in garment factories and posted them here. Keep the full post to know what makes us plan efficiency at less than 100 percent.


View shared by Aditya Mahapatra (IE Specialist in a Denim manufacturing factory)
Labor-intensive manufacturing industries are highly dependent on individual performance what eventually leads to the overall factory capacity. So, to talk about factory efficiency we essentially need to understand the individual contribution towards the productivity of manufacturing lines as well.

Studies often show that the individual work rate what is academic parlance known as the Rate of Performance can transcend beyond 100%. So, we can say that the efficiency of an operator based on an established work measurement unit can practically be more than 100%.

Now can the overall efficiency of a line/factory be 100% or more than that? The answer simply is no. Not even in a utopian world.

If we look at the individual level, we will see often that the standard times of operations are generally derived from method-study of the qualified operators as the standard while the normal distribution of the available workers would comprise the mean values that would suggest the average performance rates of them are well below 100%.

When these workers are set up through the material flow chain in a traditional assembly line contributing directly to product making- the productivity of the different operations based on their SAM Value and the different Performance rate in their respective operations would definitely cause different Utilization rates of the operators. And thus, nothing termed like a perfect Line Balance can exist in the world- only we can rate them between two degrees- good and better.

This is the individual hindrance that will never make 100% efficiency happen.

On other hand, the global reasons of less than 100% efficiency of a factory or an entire manufacturing line can be attributed to absenteeism, poor workmanship which leads to rework, accidental or occupational hazards- factors which are often ignored in work measurement of the operations comprising the finished product making activities.

Traditionally, industries define the overall efficiency as a single parameter for the sake of easy calculation which actually engulfs factors like absenteeism percentage, utilization factor, rework-rate etc. under its bigger umbrella- which are still subjects to study, explore and define.

So, in my opinion, a 100% efficient factory line would never exist even in an utopian society, until it’s not fully automated or the lines are run by robots with near 0% technical glitches/break-down possibility.

People might ask what should be the standard efficiency of the factory then- 65% or 75% or 85%?

Honestly, it’s a paradoxical question as it’s imprudent to plan beforehand what can’t be executed. Without just determine a percentage as a flat verdict, the standard target efficiency should be set from both commercial and technical perspectives. The target productivity should be set accordingly that might help the plant go beyond the break-even point resulting in meaningful profit for the continuous growth of the business. And then considering the above discussed individual & global factors, a factory should define plausible overall efficiency to set their target capacity. So, it would vary definitely depending on - product range, the price, skill-set of available workforce, infrastructure, human resource and certainly region along with other commercials, technical, human and even political factors.


View shared by Ram Chandra Das (Management consultant, Apparel industry)
In an industrial production system, garment manufacturers mostly work on an assembly production system. It means a group of operators (team) make a complete garment. When we plan factory performance of efficiency it is a group performance. 75 % is team performance. When we move with a team always the slowest person decides how fast you are.


My views (Prasanta Sarkar)
The reason for planning line efficiency at less than 100% (in this question it is 75%) is to give an achievable target to the line. The production planning, manpower, and machine requirement calculation are done based on the line efficiency (75%). There are a few factors why a production line can’t achieve 100 percent efficiency. We can improve those factor but can’t eliminate completely from the garment production system.

When the standard time of a style is calculated, engineers consider the normal working speed of the worker. We get different SAMs for different operations in a line. When we balance the line (line layout) there we see some drop in efficiency due to balancing loss.

There is a learning curve for every new order loading to a production line. This eats up some amount of productive time. In a production line employees work at different skill levels. There are certain idle times, and loss times that are obvious in the production environment. 

The factory manager, planners, and engineers know these factors. They know their line's average performance on daily basis. So for planing an achievable goal and preparing achievable production schedules, they prefer to using the factory's average line efficieny.

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