Saving Fabric = Increasing dead stock??

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1 Saving Fabric = Increasing dead stock?? To minimize waste has been the mantra of garment industry for the past decade in order to increase bottom-line profitability. We have been educating ourselves on various innovative concepts and techniques to control the production floor but in order to plug smaller cracks are we neglecting the bigger holes in the system? Methods Apparel Consultancy in conjunction with OGTC conducted a ten week program for cutting room improvement in 8 factories in NCR to investigate and improve fabric utilization, the single biggest contributor in garment cost. As you are all aware fabric comprises at least 50% of the garment cost and the best fabric utilization is to use every inch of what you buy, converting it into garments and ultimately into earnings. To establish and identify the major areas of waste 2 orders were thoroughly investigated in each of the factories. The results of which have been presented here so that you can see where you stand. The results show that of the total fabric bought for an order only 82% is being used effectively the remaining 18% is being lost in one way or the other. The major contributors to this loss are :- Dead Stock: It is the fabric that is left in your stores after the order has been shipped. This is mostly the result of over cautious buying. No one wants to be blamed for short shipment and so

2 there are lots of stages where extra percentages are added. As an example the Pattern master calculates consumption on medium size (2 mtr) and adds extra approximately 10 cm to compensate for large sizes a further 3 to 5% is added for cutting wastages and 2% for shrinkage and defects. The fabric is ordered and a further 5% is added since the buyer allows a potential 5% to be over-shipped. Cut to Ship Ratio: This ratio represents the number of garments shipped against number of garments cut. The cut to ship ratio varies between 95% and 99%. 6 of the factories achieved a ratio of 96/97% with only two of them achieving acceptable delivery percentages. Garments Cut Garments Shipped Example Consumption 2 mtr Pattern Master 10cm 2.1 Cutting wastage 4% 2.18 shrinkage 2% 2.23 Fabric required (Order Qty = 4000 pcs) =8000 mtrs Fabric Bought (Order Qty + 5%=4200 pcs) = 9366 mtrs If cut to ship ratio is 97% (avg) then 4076 garments are actually shipped. Fabric accounted for = 8152 mtrs. Fabric Unaccounted for or lost =1214 mtrs. In this case the loss is 13% of the total fabric bought, this fabric is either dead stock, lost in cutting room, lost as reject garments or arrived short on rolls from mill. However, once the shipment leaves we revel in the fact that we have sent more than order qty instead of realizing the fact that we actually bought extra 5% fabric but not converted it into earnings. Because the buyers allow an extra 5% to be delivered that amount is being added to the purchases, costed consumption figures are rough and have some FAT in them Think about adding the extra garments to the shipment but don t buy fabric for them, in most cases you will succeed in delivering the order complete. Markers: 7.5% of fabric was being lost due to inefficient cut order planning and poor markers.

3 Cut Order Planning: Finding the most efficient markers for a given set of quantities presents a challenge for even the best cut planners. Good Marker planning can make cutting rooms 20% more productive and save at least 2% of fabric issued. By utilizing the additional 5% that is acceptable to the buyer, the ratio can be smoothed and the number of markers reduced. reduced This will lead to more economic consumption figures and less work, without affecting the final dispatched quantities. The concept of cut order panning is lacking in m many cutting rooms. The planning that is being done is sometimes not as good as it should be. Marker Making: CAD equipment ipment has been in the market for a long time, many companies own CAD equipment; however owever it is surprising to see that after sp spending ending thousands, the equipment are not being used as well as it could be in many of the factories we have visited. visited Some of the companies make miniature markers and send them to the cutting room where they are ignored and inefficient manual markers are made resulting in poor fabric usage usage. 50 markers were checked on the automatic marker making equipment currently on the market, market it was found that marker making unaide unaided by humans can save 3.6% on an average, average in certain cases savings were as high as 5%, this leaves huge room for thought and how management works to control the efficient use of this equipment. Width Usage: Fabric supplied pplied has considerable width variation it is important that fabric width information is supplied to the marker making department so that markers can be made to maximise the advantages to be made. This can save a further 0.5% of the fabric in an order. None of the factories were grouping fabrics and using widths appropriately. Other Areas of potential Improvement Improvement: Remnant Markers and End bit Administration: Most factories cut garments from remnants remnant (End bits) but they are frequently saved to cut part changes and the remaining fabric is wasted. In each factory it was made mandatory to use all the remnants to cut garments before the last marker and part changes were done only from off cuts. The final comparison between costed/buying and achieved consumption will be considerably improved. Methods ethods Apparel Consultancy India Pvt Ltd

4 Housekeeping: Research shows that there is direct correlation between productivity and clutter. The housekeeping in the cutting rooms was hugely improved during the project the photographs below were taken in the same ccutting room. Before After (same factory) Housekeeping is a major problem in the vast majority of cutting rooms the laying tables have been designed with shelves underneath and these shelves are used to store all sorts of pieces of fabric from current and nd old orders, fabric is treated very poorly with no understanding of its importance and these shelves promote poor fabric discipline and waste, we recommend that the shelves are removed and that all fabric is treated in the manner that its importance to the t profitability to the business should demand, the way it is stored under the tables is similar to throwing money on the floor and expecting it to be there when you return, such is the waste. Fabric Reconciliation: This is a very important tool to control and monitor fabric usage. It gives the management account of each and every inch of fabric bought. None of the companies were doing complete Fabric reconciliations The reconciliation reports is a complete summary of how the fabric was used, it covers; How much was bought, issued, layed, Supplier shortages, amount unusable, End bits and Off-cuts Off and summarizes profit and loss on each order over costed consumption. This report can assist not only in n accounting fabric but also in evaluating suppliers for shortages in rolls and quality of fabric and of course in monitoring exactly how fabric is being used. These reconciliations should from a part of regular management meetings in which fabric performance nce against individual orders plays a major part. Methods ethods Apparel Consultancy India Pvt Ltd

5 Costed/Buying Versus Achieved Consumption: There is a great potential for improvements in controlling the amount of fabric bought, the estimates on which fabric is purchased and as previously mentioned safety margins built- in lead to dead stock. If the staff involved stop trying to protect themselves from errors and buy only what is really necessary lots of money will be saved. In many cases buyers are responsible for changing the style specifications at the last moment which contributes to these variances. Our investigation into this suggests that on an average 10% extra fabric is being bought. There is no point in improving markers, using the width better, reducing end losses, using end bits better if you have overbought, all you are doing is adding to dead stock. So the commonplace assumption that we know how to save fabric could be untrue! It is possible that savings in the cutting room are worthless, since you have already purchased the fabric! It is vitally important that efficient fabric control systems are developed to monitor fabric usage from purchasing through to a final reconciliation, and how much we have Saved which is now on the stockroom shelves waiting for someone to buy it at a tenth of its original cost. Can it be that all of your efforts go towards allowing senseless wastages and increasing your dead stock holding? Roger Thomas Methods apparel Consultancy India