<.3.2 Cut and Make cost (CM)

This value is calculated to estimate the cost of cut and make process of one garment. To calculate the C&M cost, we need two other factors, garment SMV and the CPM

SMV (Standard minute value)

                                                This term defines the time duration of a garment stitching process. The SMV for a garment is calculated in standard minutes and this value is calculated by the work-study of the sample room. There is special method to calculate this SMV. They use the GSD concept (General sewing data) to do this.
            The every operation of a garment is analyzed according to GSD and it gives time period to each operation of a garment. Once again these operations are analyzed according to the GSD codes and these codes describe the steps in an operation.

                               Furthermore;-
                                               The time for taking panels, the time for matching panels, the time for putting panels under the MC foot, the time for stitching panels, the time for put aside the stitched panels and the time for taking new panels-


                        The GSD codes also some kind of above mentioned thing and these codes are given a standard time allocation. There would be more GSD codes within one operation and we can take the SMV of that operation by taking total of each code. The total SMV of the whole garment can be calculated by taking the total of all the operation within the garment.

CPM (Cost per minute)

This the factory running cost of per minute. 

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<.2.2 Trim cost

When we produce a garment, except fabric, we need other materials such as, treads, buttons, lase, labels, heat seals etc. These add-ons are known as trims and the cost of these trims is also included to the garment FOB.

 The trim YY is calculated by the work-study of the sample room. First they get the Tec-pack and BOM. Then they analyze the garment by considering above details.
 The work-study do an operation brake down and identify what the operation within that garment. Then he analyses what is the consumption of treads for each operation. The work-study should have a good knowledge about the garment stitching process and it will help him to identify the operations within the garment

The following is a model of a thread consumption calculating sheet for a garment.

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3.<.2.1Fabric costing

      They calculate the fabric cost per a garment. To calculate the fabric cost first of all they have to calculate the garment fabric YY (yielder per yard). This is the fabric consumption of a garment and measured by yardage.

                    The following equation shows how is the fabric costing is done.

                                         Fabric cost=Fabric YY×Unit price

                   (the unit price is the price of fabric yard.)

How to calculate the fabric YY

                                     The fabric consumption of a garment is given as an average value for all garment sizes. This fabric YY is calculated by the CAD room where they draw a special marker to find the fabric YY for further processes. Finding the fabric YY of a garment in particular style is very important at the costing stage.

 Before calculating the garment fabric YY, they have to create a marker with good efficiency.    

                                                     To draw a marker, the marker planner needs all patterns of every garment from each size and also the cutter must. The cutter must show how many types of fabric should be used to produce this garment and the marker planer has to create the marker for the number of fabric types in the cutter must document. All the details about the received patterns are included here and they are sorted out by the patterns reference numbers which are changed at each developing stages. When the marker planner inserts the patterns to the Gerber system, he selects the patterns to the related reference number and

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3.1.2 Costing

 Fabric and Trim Costing

                        Costing is a process to analyze the price of the garment which the factory hopes to sell to the buyer. There should be a good knowledge of the garment producing in order to do a good garment costing. Mainly costing is for calculating the expenses incurred for the garment production.

And also the costing process should consider about the other related things such as transport, purchasing, other overheads in addition to the production process.

                        Before the costing process, factory has come to an agreement with buyer on the payment term that they intend to use during their business. Most of the time they tend to select the FOB term for the convenience of both the parties.  So the garment cost is also calculated according to the FOB term and the final FOB is given to the buyer as the garment price.

When costing a garment order there are two types of cost affect to final garment cost.

•  Direct cost:                  Mainly affects the raw material cost for the direct cost. In addition to that production cost,- cost for running machines, maintenance, power, fuel and other utilities. Then anther portion for workers’ salaries. Finally for the wastages.

• Indirect cost:                     
                 Indirect cost is for the expenses, like travelling, telephone, couriers, legal issues and taxes. Then finally depletion of machineries and other sources.

The profit of the factory also adds to this cost and they can increase their profit by adding some allowances to these figures.  The limit of adding buffers or allowances to this costing, is mainly depends on the quantity of the order and the garment FOB that buyer requested.

The garment FOB is included with following factors.

                                                        I.            Fabric cost                                 

                                                      II.            Trim cost                                  

                                                    III.            Labour cost                     

                                                    IV.            Profits   

In the BIA there is a special computer application used for calculating the garment FOB. They only have to input the fabric and trim YY. Other details are automatically inserted through the system data base.

T&A Plan

            T&A plan is very essential in production merchandising. Actually this is for minimizing the risk of missing any of the activities during the production process and the T&A is prepared by the merchandiser after discussing with other related teams such as procurement, planning, development and with the production departments also. Once the T&A is finalized and approved, the same schedule should be circulated to all the departments concerned when they start the bulk production.

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3. Merchandising Department

As we know there are so many BIA factories spread all over the country. The merchandising processes of all these factories are done by the merchandising office situated in Walisara.
This BIAW merchandising department is divided into factory wise then once again these are divided according to the buyer wise. Here in my report I have taken all details and the examples relevant to the EI account of the BIAK factory and it handles the buyer Express.
The merchandising department is the starting point of the factory’s production system and it’s known as the front end of the factory. The merchandizing department has to involve with all the departments in the factory along with their operations and this department also can be described as operation center of the factory. (BIAK factory is situated in Katunayake and the merchandising department of BIAK is situated in Walisara. So the BIAK has communicate with their merchandising team over the telephone and e-mails)
Actually the merchandising is a process with, planning, developing, costing and presenting their product to the buyer. So this merchandising department of the BIAK is divided into three teams to perform their tasks very easier.

These three sub teams are

1.  Marketing team      
2. Developing team
3. Procurement team

The responsibilities of merchandisers:-

• Product Developing 
• Inquiring for PO from venders
• Raw Material purchasing 
• Market and product 
• Analyzing
• Booking space for orders
• Sampling
• Costing

3.1 The marketing Team

Marketing team is to deal with the buyer and for negotiating about new order placement. The marketing merchandiser is the first person who gets all details about the new order from buyer. Then he receives technical pack with the BOM, from the buyer and they should sent copies for other teams for further process.
Merchandisers have to negotiate with the buyers on pricing, work out delivery schedules, and investigate for future buyers.

3.1.1 Garment order inquiry

           This is the place where the buyer and the factory merchandiser discuss about the order and its delivering schedule. The factory is a vendor and the buyer is inquiring from many vendors around the world until he comes to his satisfaction.
             The object of this inquiring is to identify what is the ability of the factory and identify of the factory capacity to meet this order in time.
               When the factory is asked for an enquiry from a buyer, factory should present their time schedule by describing the way that, how they hope to meet this order. This schedule should be send to the buyer and this is very important for the order confirmation. This plan is name as “Time and Action Plan” (T&A)