SAM (or SMV) means the time (in minutes) that it takes a worker to complete a specific operation or produce a specific garment. Estimating garment manufacturing cost is a crucial task for apparel manufacturers. Deriving the a accurate costs for the new orders need knowledge and awareness of the factors that effective the production cost for the bulk order. In this article, we will know the calculation of garments CM (Cost of Making) by SAM /SMV.
The scientific method for estimating CM (Cut and make) cost of a garment involves following steps
- Determine SAM of the garment
- Calculate average line efficiency
- Calculate direct labor cost per minute
Calculation of Garments CM (Cost of Making) by SAM/SMV
Calculate labor cost
Labor cost per minute = (Monthly salary of an operators/Total minutes available in the month) at 100% efficiency. But no line can perform at 100% efficiency, so labor cost per minute increases when line efficiency goes down.
Example:
Operator monthly salary is INR 15000.00
Total available capacity per month (in minute) = (26 working days x 8 hours per day x 60)=12,480 minutes
So, per minute cost of the direct labor = (15,000/12,480) = 1.20 INR at 100% efficiency. This CPM is the actual labor cost per minite.
So, the correct formula is,
Labor cost per minute = Total salary of the laborers in a month / Total SAM produced by those laborers in that month.
Calculate Cutting labor cost per garment:
Cutting SAM is 2 minutes and cutting room perform at 75% efficiency then the estimated cutting cost is (2 x 1.2)/75%=3.2 INR
Let’s say sewing SAM of a apparel product is 17 minutes. The production line works at a 75% efficiency. In this example, the estimated garment making cost = (17×1.2)/75% =27.2 INR
Calculate Finishing labor cost per garment such as ironing and all:
Cutting SAM is 3 minutes and cutting room perform at 50% efficiency then the estimated cutting cost is (3 x 1.2)/50%=7.2 INR
So, Total estimated CM cost of the garment = (27.2+3.2+7.2) = 37.6 INR
You can further include thread trimming and garment inspection labor costs.
Also you can Read ….. How to Calculate Labor Productivity?
