Reverse the $ Effect on Your Profits

7/29/2019 Reverse the $ Effect on Your Profits

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© Methods Apparel Consultancy India Pvt Ltd1

Reversing the $ effect on your profits

Currently the garment industry in India is in a state of shock, the increase in the value of the Rupee

has had a really devastating effect on profitability, so what are you going to do about it?

Most companies have the potential for efficiency and management improvements to more than

compensate for this setback, but of course it involves a great deal of training and hard work to

establish the ways to get the necessary results.

It should be stated here that it is vital that any move towards this goal must be backed by the top

management and it should be understood from the beginning that results will only come after some

time and considerable effort, they are not automatic nor are they easily gained.

Here are a few ideas to help you to save at least 10%

Can you see? --- Workstudy helps us to see!

RS




No one taught me how to see! – for 20 years I wandered around the factory floor with my eyes

unable to focus on what was going on, could obviously see the operation that was being done by theoperators but not HOW they were doing it. This is a problem that I am constantly seeing in sewing

factories.

A good example of this was seen in a factory in Sri Lanka the operator was top stitching around the

sleeve and stopping 33 times! The main problem in this is the fact that neither the Supervisor nor

the Manager saw this so no corrective action was taken! But the potential for improvement was at

least 50%. We have taken many videos that show the potential for huge method improvements

varying from 35% to as much as almost 300%, but unless you set up a Workstudy department to do

this sort of improvement then you are missing a massive opportunity to improve.

It is amazing to realise that no-one in most of the factories is doing this job, we are blindly rushing

through our orders with one main concern, and that’s delivery, but how we could make the

deliveries easier to achieve is not being looked at, I guarantee that at least 50% of the operations is

most of the factories in India can be improved and the output increased.

The amazing fact that only 4% of the huge garment manufacturing industry is trained, leaving 96%

without any training at all. I would ask “Are people born with knowledge”? of course not, so how in

the world do you expect to improve your situation unless training projects are undertaken?

Garment Engineering




The sample department controls the way that the garment is made, what efforts do you make to

ensure that the sample department makes the samples in a Production efficient way? We are seeing

huge potential savings by reducing the number of operations required to make the garment and

making the garment “Production friendly” This probably means a completely new approach to new

styles and will necessitate the need for the IE department to be involved from the start of the

development stage so that from the very beginning the style is created with a view to making it easy

to make when the order comes and reducing the work content without changing the aesthetic

appeal of the garment. It’s not easy, but it could be worth a lot of money to you!

Supervisor Training




Good Supervision without properly constructed supervisory training? is this possible? Have you

taken the time to work out what the duties of a supervisor should be, if you were to do this you

would be amazed at what is expected?

The following is a list of the duties of a supervisor:

Productivity --- Quality --- Line balancing – Discipline – Housekeeping – Safety – Smooth running of

the line – Delivery on time – Bundle discipline – Motivation – Repairs – Time keeping – Line

administration – Morale of the workers – Operation sequences – Calling the mechanic – Being firm

but fair ---- and much more!!!

The supervisor directly supervises more people than any other department in the factory and they

do it without training --- Are we mad?? – If you want to improve productivity then Train them!

Monitoring the workforce




Are you aware of your efficiency? You do of course understand that without information their can be

no management, So do you know what your efficiency is? Are you monitoring the efficiency and

Work in progress in your factory? If not, how can you possibly set targets to improve? If you don’t

know where you are how can you establish where you want to be? And HOW CAN YOU PLAN?

Production planning

If you know your efficiency and your absenteeism then its possible to establish your capacity and

plan your workload to fill that capacity and then you will be able to deliver your orders on time, but

if you don’t know your capacity how can you possibly plan?

So, without this information how do you plan? Do you work lots of additional expensive overtime

hours to deliver orders? Does this make sense? Have you costed in your overtime labour hours?

What is your ratio?

How many helpers are you employing, labour is not cheap in India if you are paying people that you

don’t need to have in the first place. You calculate the ratio as follows,

• You need to imagine your operation as a strictly CMT factory




• You should therefore ignore the merchandising people and general office personnel in this

calculation since these is generally a central department

• You should include – Cutting room, Finishing, Raw materials stores and the rest of the

factory staff and the office staff that would be required in a CMT factory

• You will now take the number of Tailors and establish their relationship to the rest of the

staff, for example, if you have 500 tailors and your total staff (as described above) is 1350

people, then your ratio is 1350.- 500 = 850 / 500 = 1 to 1.7, i.e. one tailor to 1.7 others

• This is far too high, you should be aiming at a target of 1 to 1 or better, so this means that

you are possibly overstaffed by as much as 350 people, can you imagine how this could

affect your bottom line?

In the cutting room

Well since fabric represents 60-70% of the product cost a 2% saving would give you approx 3%

additional profitability, how can this be done? The following are a few suggestions

Width measurement – Ensuring that the fabric is grouped by width and that markers are

made for the various widths

End bit control – Are you keeping end bits to cover for potential replacement panels? Or are

you maximising the number of garments that can be cut from the issued fabric and only

replacing panels that can be cut from the small pieces of fabric remaining from each roll

which are not big enough to make a garment, if pieces big enough to make a garment are

being kept back for panel replacement you are throwing away money.




Laying up allowances – Are you measuring the length of the lay plus laying allowances

BEFORE you start laying up, to ensure that the length to be layed is what it is supposed to be

Marker making targets – Do you give your marker makers a target efficiency to achieve, this

of course should be a weighted average for all of the markers in the order and should be

given by garment type, records should be kept of achieved marker efficiencies b y garment

type and this information used to establish the targets, these of course can only be a guide

since there are many reasons why marker efficiency will vary from style to style.

Monitoring Fabric suppliers – Do you monitor the plus or minus on all rolls of fabric and the

amount of fabric that is removed from the rolls because of fabric flaws from all suppliers?

The finishing department

Being the last link in the value chain many companies overstaff this department excess people are

put there in order to make sure that the garments are processed with the minimum of time, again

because delivery is the overriding priority. There seems to be no proper monitoring within the

department and as long as the garments are packed in record time then all else is forgiven. I have

been in factories where the time allowed in this department is almost as much as the time allowed

to make the product in the first place, so again there are large areas of potential improvement

Quality

How many garments are being repaired each day? what is your quality documentation like, are you

establishing your “cost of quality’

This is another area of potential saving, you need to establish the repair situation within the factory

and set up the controls necessary to convert your quality information into a number, and of course

this could be a percentage and once you have this number then you need to set about improving it.




Quality costs! You need to establish how much, you then need to produce a plan that will reduce this

cost, please remember…….

Quality cannot be examined into the garment, it must be BUILT into the product from the beginning.

Your Management

It’s a great shame that managers spend so much time chasing orders that they don’t have time to

organise the basic management functions, so we are using our most experienced and knowledgeable

people to do the things a properly organised Production Chaser should be doing, its always a last

minute panic to get deliveries completed, how many times have I been told, “no can’t have a

meeting that day, we have shipments to make” yet surely if properly organised management could

be controlling the function not doing it!

Conclusion

There are many ways in which you can recover the exchange rate effect on your profit margin, and

of course a change in the exchange rate is nothing to do with you, but if you want to continue to be

profitable then you have to tackle the problem. I have suggested a few ways in which this can be

done, but I would advise you to look at your management structure to make sure that the people

you employ have the wherewithal to approach these problems, and if not then perhaps you can




embark on a structured program to make the points listed above a reality, but you cant do it

without setting up the organisation to do it, you need the concept, the people, the understanding of

how you can improve and then you can make a plan to get to where you want to be.

I have made a few suggestions as to how it can be done, there are many other possibilities, but you

need to release your top men from order chasing to start on such a program, and I can tell you that

if you structure it properly 10% improvement should be easily possible for many of you who read

this, provided of course that you are totally committed to it.

Reverse the $ Effect on Your Profits

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