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1. Small Factory Set up: You can set up a small garment factory with your own tailoring or
manufacturing experience. You have to hire few tailors. Make garments and sale finished
garments to retailers or whole sellers in your city. You may select products such as school
uniforms, ladies kurtis, salwar-kamiz, mens shirt or make ladies blouses.
2. Sub-contracting Business: Set up a small factory and do sub-contracting work (job-work) for
export houses and domestic brands. In buying seasons export houses book orders in excess
quantity than their own production capacity. To complete those order on time they look for
sub-contractors or job-workers. In this business you dont need to handle buyers, dont need
to purchase materials. You have to just collect cuttings from exporters and stitch garments.
What is Subcontracting?
Subcontracting can be defined as doing partial work of a contract that is originally received by other.
The companies those do subcontracting are called as subcontractors. They are also known as job-
workers.
In the garment industry, a subcontracting unit is a factory that mainly does garment stitching work.
They don't need to set-up other facilities and staffs for layer cutting, garment finishing, and packing
activities. In apparel supply chain garment exporters receive original contract from apparel brands,
international buyers or retailers. These export houses get their excess production done from
subcontractors.
An export house can also work as a subcontractor. When an export house doesn't get enough direct
business they take work from other export houses. So there is no fix definition that sub-contractors
only sew garments. They can take subcontracting work from cutting to packing, provided they have
in-house facilities for these.
Reasons behind Subcontracting Stitching Work
Followings are few visible reasons for existing subcontracting business in apparel industry.
Uncertainty of order volume round the year - Garment exporters set up their factory based on
average order quantity. When they get excess orders in pick seasons, export houses prefer getting
production done from subcontractor. It is also found that exporters get production done for part of
their total orders from outside in all seasons. By getting production done from outside, exporters
save on overheads cost. They dont need invest on building and machines those could not be utilized
in full year.
Getting Control over manufacturing cost This applies to brands. By sourcing fabrics and other raw
materials, brands can reduce manufacturing cost of garment. Also brands can controls quality of raw
materials keeping sourcing on their hand.
Keep away labor issues - Domestic brands are changing their sourcing strategy. They now started
sourcing garment based on Cut to Pack, instead of FOB orders. In this process they don't need to set
up factory. This way brands can focus on developing designs and retailing their clothes. Brands like
UCB, ITC outsource their products from subcontractors. Brands give work to subcontractors those
provide cutting, make and pack services.
Exporters and brands sometimes face problems in terms of quality standards of the product when
production gets done by subcontractors. However stitching quality can be controlled.
Brands - Domestic brands those don't have their own manufacturing facility, give cut-make-pack
orders to subcontractors. Fabric and trims are sourced by brands and given to subcontractors.
Designers - Designers need small quantity of garments in particular designs. They prefer sourcing
fabrics and accessories by their own. They just need to stitching work by others. So they reach to
subcontractors.
Following is the simple process flow of subcontracting job. To make explanation easy, I am
considering that subcontractor are getting work form exporters.
A subcontractor sets up factory with sewing machines and contact with exporters for work.
They show their expertise in products and facility they have to exporters and possible
clients.
Garment exporters contact with subcontractors in their location, show their samples to
subcontractors and fix price per piece for making garment (in most cases stitching only).
All trims and accessories are normally provided by exporters. If required, trims can be
purchased by subcontractors. And expenses are billed to the exporters.
This is all about subcontracting in apparel manufacturing. You are welcome to add other features of
this business process, if you find something is missing here.
3. Garment Wholesale Business: You can start garment whole sale business in your spare time.
Source garments from manufacturing hubs and distribute those garments to shops in small
cities. As you purchase goods in bulk quantity and from manufacturing hubs, you will have
good margin in this business.
4. Clothing Store: You can open a garment retail shop or outlet in your small town or City, in
Street corner or inside a mall in metros.
5. Export Surplus Garments Store: Export quality (international brands) garments with low
prices are on demand now-a-days. In metros everyone wants to look trendy and wear
branded clothes but they dont want to spend much money in Brands retail shops. So they
look for export surplus garments. So, opening an outlet for export rejected and surplus
garments is a good and profitable business idea. If you are working or worked in past in
garment manufacturing you know that garment manufacturers make extra garments than
the order quantity they get from buyers. Sometimes whole order get rejected due quality
issue or shipment delay. Purchase stock of surplus garments from factories and sale at
attractive prices.
6. Printing and Embroidery Unit: Printing and embroidery are value added processes in
garment manufacturing. In this fashion age, to make product trendy, designer always add
some colors and patches on their designs. Hence, excluding some basic product all export
orders include printing process or embroidery work or both. To set up Print and Embroidery
business factories need to invest on machines, so small manufacturer dont have in-house
printing and embroidery machines. Thus, it can be one good business opportunity in these
value added processes.
8. Garment Buying agency: If you are working as merchandiser in an export house or buying
house for few years. You may have developed good relationship with your buyers. You have
good opportunity to contact with buyers, take order and get manufactured garments from a
factory. You can even set up product development and sampling room to attract more buyer
and display wide range of products. You will be needed small team to start garment buying
house initially.
9. Consultancy Services: May be you have built your expertise and skills in some specific fields.
If you have passion to teach others and can solve real life problems daily faced by factories,
buyers and auxiliary business firms, you can start consultancy services. Though at present
consultancy services are not very popular in this industry, in future factories will look for
expert guidance -in the areas like cost reduction and factory performance improvement.
10. Information Technology Services: Garment industry is embracing more and more IT based
technology. It may be ERP systems or other technology solutions. If you have good
understanding of IT and can develop innovative tools that can solve exporters problem such
pattern making solutions, real time data collection, production planning, material
management or it can be anything. Your development must bring measurable improvement
in garment manufacturers business as a whole or in department level.
What type of garments you are going to make? If you plan to make knits garment (T-Shirts, Polo ),
you would not try to make woven products (Shirts, Trousers) at the same time. Again in woven and
knits there is wide range of product categories. Narrow you product profile as much as possible. For
eg., you are going to make woven shirts - Formals and Casuals.
How many pieces are you planning to make daily? 50 shirts or 500 shirts per day? It would be
difficult to decide the figure at this stage but you have to estimate a rough number. Later you can
modify this figure depending on the budget and customer demand. Otherwise you can't move
forward making your business plan. When my clients ask me question how many machines and what
all machines they need to buy for their garment manufacturing set up, I ask them what (product
name or type) do they want to make and how many pieces of garments they are planning to make
per day. Read 'How to Calculate Production Capacity of a Factory'.
In Apparel Manufacturing, Production capacity is one of the most important criteria used for
vendor selection by the buyers. It is because; the production time of an order is directly proportional
to vendors production capacity. So it is very important that marketing and planning personnel
should aware about the production capacity of their production units.
Capacity of a factory is primarily expressed in terms of total machines factory have. Secondly, how
much pieces the factory produces on daily for the specific products? In general, total numbers of
machines in a factory mostly remains same for a period. But factory may produce various types of
product during the season. According to the product (style) category, machine requirement may
change and daily average production in each style may vary. So to be specific during booking orders,
planner should know exactly how much capacity he or she needed to procure the order in a given
time period.
Sewing Floor (Image Credit: Shahi Exports Pvt. Ltd. via Facebook page)
A factorys capacity is presented in total minutes or hours or in pieces (production per day). The
method used to calculate capacity has been explained in the following. To calculate Daily production
capacity (in pieces) one needs following information.
1. Calculation of factory capacity (in hours): Check how many machines factory has and how many
hours factory runs in a day. For example suppose,
2. Calculation of Product SAM (SAM): Make a list of product category that you manufacture and get
standard minutes (SAM) of all products you make from work study engineers. If you dont have
product SAM then calculate the SAM. Or you can use average SAM of the products. Suppose you are
producing shirt and its SAM is 25 minutes.
SAM or Standard Allowed Minute is used to measure task or work content of a garment. This term
is widely used by industrial engineers and production people in the garment manufacturing industry.
For the estimation of cost of making a garment SAM value plays a very important role. In past
scientists and apparel technicians did research on how much time to be allowed to do a job when
one follows standard method during doing the job. According to the research study minute value has
been defined for each movement needed to accomplish a job. Synthetic data is available for each
movements.
General Sewing Data (GSD) has defined set of codes for motion data for SAM calculation. There is
also other methods through which one can calculate SAM of a garment without using synthetic data
or GSD. In this article both methods are explained in the following.
In this method 'Predetermined Time Standard' (PTS) code are used to establish 'Standard Time' of a
garment or other sewing products.
Step 1: Select one operation for which you want to calculate SAM.
Step 2: Study the motions of that operation. Stand by side of an operator (experienced one) and see
the operator how he is doing it. Note all movement used by the operator in doing one complete
cycle of work. See carefully again and recheck your note if all movement/motion are captured and
correct. (for example motions are like - pick up parts one hand or two hand, align part on table or
machine foot, realign plies, etc.)
Step 3: List down all motion sequentially. Refer the synthetic data for TMU (Time measuring unit)
values. For synthetic data you can refer GSD (without licence use of GSD code prohibited but for
personal use and study one can refer GSD code and TMU values) or Sewing Performance Data table
(SPD). Now you got TMU value for one operation (for example say it is 400 TMU). Convert total TMU
into minutes (1 TMU=0.0006 minute). This is called as Basic Time in minutes. In this example it is
0.24 minutes.
Step 4: Standard allowed minutes (SAM) = (Basic minute + Bundle allowances + machine and
personal allowances). Add bundle allowances (10%) and machine and personal allowances (20%) to
basic time. Now you got Standard Minute value (SMV) or SAM. SAM= (0.24+0.024+0.048) = 0.31
minutes.
I like to refer you an article Secret Behind Calculation of Machine Time in SAM for better understand
of SAM calculation.
Step 1: Select one operation for which you want to calculate SAM.
Step 2: Take one stop watch. Stand by side of the operator. Capture cycle time for that operation.
(cycle time total time taken to do all works needed to complete one operation, i.e. time from pick
up part of first piece to next pick up of the next piece). Do time study for consecutive five cycles.
Discard if found abnormal time in any cycle. Calculate average of the 5 cycles. Time you got from
time study is called cycle time. To convert this cycle time into basic time you have to multiply cycle
time with operator performance rating. [Basic Time = Cycle Time X performance Rating]
Step 3: Performance rating. Now you have to rate the operator at what performance level he was
doing the job seeing his movement and work speed. Suppose that operator performance rating is
80%. Suppose cycle time is 0.60 minutes. Basic time = (0.60 X 80%) = 0.48 minutes
Step 4: Standard allowed minutes (SAM) = (Basic minute + Bundle allowances + machine and
personal allowances). Add bundle allowances (10%) and machine and personal allowances (20%) to
basic time. Now you got Standard Minute value (SMV) or SAM. SAM= (0.48+0.048+0.096) = 0.624
minutes.
To estimate SAM you have to analyze the garment carefully and check different factors that affect
the SAM. SAM of a product varies according to the work content or simply according to number of
operations, length of seams, fabric types, stitching accuracy needed, sewing technology to be used
etc.
But still many of us inquire for approximate SAM values for basic products, like Tee Shirt, Formal
shirt, Formal trouser or jacket. An estimated SAM helps in capacity planning of the factory,
calculating requirement of machineries and even helps to estimate CM (cut and make) costing of a
garment.
However, for better understanding I will suggest you first to read articles How to calculate SAM for a
garment?. SAM is a short form of standard allowed minutes. It means a normal operator can
complete a task within the allowed time (minute) when he works at 100% efficiency.
Standard minutes (SAM) of few basic products have been listed down with its SAM range according
to work content variation. In actual cases garment SAM may go outside of the limit depending the
above factors. This list will be updated time to time adding more products.
3. Factory Average Efficiency: This data is collected from industrial engineer. Or calculate it with
historical data. Suppose average line efficiency is 50%. Read the article - How to calculate efficiency
of a production line or batch?
Like individual operator efficiency, efficiency of a production line or batch or section is important for
a factory. Daily line efficiency shows the line performance. To calculate efficiency of a line for a day,
you will need following data (information) from the line supervisor or line recorder.
Once you have above data you have to calculate following using above information -
a. Total minutes produced by the line: To get total produced minutes multiply production pieces by
SAM
b. Total minutes attended by the all operators in the line: Multiply number of operators by daily
working hours and convert total hours into total minutes (multiplying by 60).
For example, refer following table. Data calculation formula has been given on the header row of the
table.
Total
Total Line
No. of Working line output Garment minutes Minute Efficiency
Operator hours (production) SAM attended produced (%)
(A) (B) (C) (D) (E=A*B*60) (F=C*D) (F/E*100)
Calculation of production capacity (in pieces): Once you have above information use following
formula to calculate production capacity.
= (2000*60/25)*50% Pieces
= (2000*60*50) / (25*100) Pieces
= 2400 Pieces
[Note: Production will vary according to the line efficiency and during learning curve or in the initial
days when style is loaded to the line]
Production (capacity) planning is normally done based on sewing capacity. Having knowledge of the
capacity in other processes (internal or external) is also very important. Otherwise planner may fail
and will not be able to meet the dead line. Other departments such as Cutting room capacity,
Finishing room capacity, Washing Capacity and capacity of the value added jobs.
Number of Machines
On the above I have said to you to estimate production requirement. If you have decided the
production figure, and product type, number of sewing machines and other equipment requirement
can be calculated. Calculation can be also done in reverse way. In case you have a plan of setting
specific number of machines, and product type, estimated production per day can be calculated.
Here is the resource "How to Determine Machine Requirement for a New Factory" for your further
reading.
Type of Machines
Next step is to find what types of machines are required to make garments that you have selected
from the wide range of product categories. For example, read Types of Machines used by Shirt
Making Factory. It is also important to find number of machines to be purchased in each machine
type. This step would help you to calculate capital investment in machines.
With sewing machines, make a list of other essential machines, equipment and set up requirements.
For example, pressing tables, cutting room machines, Boiler (steam generator) for pressing table,
diesel generator for power back-up, finishing room equipment, furnishings etc.
Sewing Machines
1. Single Needle Lock Stitch (Plain, with/ without UBT): Collar and Cuff making, Pocket
hemming and pocket attach, Yoke attach, Shoulder attach, Sleeve placket make, Sleeve
attach, bottom hem, Main label attach, top stitches etc.
2. Single Needle Lock Stitch (Edge cutter): Collar run stitch and Collar attach to collar band
3. Double Needle Lock Stitch: Collar and Cuff Top Stitch and Armhole Top Stitch
4. Multi Needle Chain Stitch (i.e. Kansai Optional): Front placket make and attach
2. Iron for folding and pressing front pocket and sleeve plackets.
3. Collar and cuff turning machine: For collar and cuff turn and iron
Machine cost:
Cost of the above machines depends of the machine brand and sourcing country. For the cost part it
would be better to contact with machine suppliers nearby your location. Contact details of the
supplier can be easily found on Google search.
You have already selected the product that you are going to make. Now make a list of raw materials
required to make the garment with average consumption. This would help you to prepare your
budget on material sourcing. A sample material list for knitted garment with projected cost has been
published here.
Material cost is the major cost component of a garment manufacturing costs. A correct cost
calculation method will give you better projection of garment cost for a style. In this article how to
calculate direct materials cost have been explained in details. Raw materials required for making a
garment is sourced from suppliers. Main materials are like fabric, labels, sewing thread, hang tags,
trims etc. So to have correct material cost you must have price knowledge of each item.
List down all items required and calculate consumption per unit for all materials to be used in
garments.
For an example, let you are going calculate material cost for a polo shirt. To make polo you need
knitted fabric Single jersey/pique, cuff and collar rib. Sourcing of knitted fabric can be done three
ways
- You can source yarn, knit fabric and process the knitted fabric as per your requirement or
Let you will purchase yarn and get knitting and dyeing processes done by job workers. To go through
this process collect the pricing list of different types of yarn (or at least for the yarn that you will
purchase for your product), knitting cost, knitting loss%, dyeing cost per kg and process loss% from
suppliers.
Collect material price quote for all the material you need to purchase from different vendors.
Prepare database for the current market price of raw materials.
For example here is one Price List
Knitting cost:
Knitting loss: 2%
Fabric cost: Ready to use fabric cost is calculated using basic calculation as shown in the following
table. Cost of the knits fabric is represented in price per Kg.
Once you find fabric cost and fabric consumption prepare material cost sheet including all other
material required to make a garment ready for sale. An example of material cost sheet has been
shown below.
Now for each item merchants generally purchased extra quantity of inventory (from 2% to 7%) as
buffer. This excess cost due to extra purchase of material is added into the garment costing.
Now move one step ahead. How much space is required for installing machines and office for staff?
To set up factory you need space for installing machines, office space and setting up departments for
production and associated processes. Calculate space requirement. According to that you have can
plan for a factory building or rent a space. Estimate rent amount for the project budget.
Manpower Requirement
You have already planned for machines and materials. Now plan for the requirement of manpower
for the business. Manpower is one of the primary resources for a business. In manpower planning,
include number of staffs, supervisors and workers (operators and helpers) you need to hire to make
projected garments and to run business smoothly. Also estimate salaries for each employee and add
to your budget to running cost. Get an idea from the market how much salary you need to pay to
managers and workers.
Project Cost
I frequently get asked by people, how much money one needs to invest for the small size garment
business? Here it is. To know the estimated budget you have to prepare cost of the project. You
need to calculate total capital investment, Rent, EMI amount (if you are taking loan), salary for staff,
workers wages and running costs. Also include finance required for sourcing raw materials for initial
months and other expense etc. To run you business without financial problem, prepare monthly
cash flow requirement for at least one year.
Make detailed process flow of an order. This will help you to decide what all departments you need
to set up and you can plan hiring people accordingly. You can cross check about your equipment
requirement process by process. Read the Garment Manufacturing Process Flow Chart for the export
orders. If you are new to garment manufacturing, read Apparel Manufacturing -An Overview'
Garment manufacturing includes number of processes from order receiving to dispatching shipment
of the finished garments. A process flow chart helps to understand how raw materials are moved
from one process to another process until raw materials are transformed into the desired product
(garments).
To be noted that a process flow chart made for the garment manufacturing processes will vary based
on manufacturing facility and product types. As some companies do whole process in single plant
when others do production jobs and other auxiliary processes are outsourced.
Post production processes - thread trimming, pressing, checking, folding and packing,
shipment inspection etc.
Instead of making a single process flow chart, I have made one chart for major processes and two
separate charts for cutting room processes and finishing processes for detailed process chart.
This process is not essential at first place. But you can start working on finding good and reliable
suppliers for fabrics, trims and other necessary items required to manufacture your garments. Start
establishing suppliers with your region, then go to other state and even you can source from
international market for the quality and cost effective materials.
You have finished the major part of making the garment manufacturing project. Now make a list of
potential customers and start contacting them for business leads.
If you are new to garment manufacturing and want to enter into garment business seek help from
an expert. An expert's guidance will help you to save your time, money, and efforts. You can also
learn many things about the business insights from an expert. Wish you all the best for your
upcoming garment business project.