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Factors should consider for reducing Production Cost in Apparel industry

Many of us have keen interest to start garment business. Garment production working procedure is almost similar whether it is big or small. It’s not very difficult to setup a small scale garment manufacturing business. But sometimes it’s very tough to control production cost comparing profit margin. It is mention-able that low production cost keeps product price as lower as possible that will bring you an excellent opportunity to expand your business. Here, I have gathered some tips considering major factors to reduce product cost.

Improve workers efficiency: It is one of the best techniques to reduce production cost as well as overhead cost. Factory monthly overhead cost remains constant. So, one should emphasize on training program to improve workers efficiency. Thus, you can expect more units than your targets. It is remarkable that more productivity can reduce overhead cost proportionally.
Production Cost ReductionImprove working environment: It is an intangible action to reduce production cost. Neat and clean working environment, extensive floor, hygienic water and sanitation keep workers mind fresh that will increase productivity.
Reduce overhead cost: Though factory monthly overhead cost remains constant, should evaluate it frequently for reduction. Try to save electricity, water, gas, and use manpower as much as possible to reduce overhead cost.
Implement AQL system: Implement acceptable quality level (AQL) system to minimize production cost. Improve quality people efficiency by frequent training program. By this procedure, you can reduce common quality defects and repair works that will improve product quality, organizational goodwill, lead time as well as productivity.
Managerial Skill: Production cost reduction process mostly depends on managerial skills. If necessary, arrange workshop and training program to enhance staffs and workers skill, attitude, relationship etc. Focus on to build a proactive team those will lead your business extremely.
Organized store: Organized store is helpful for securing raw materials and smooth delivery. You can keep your goods from dirty and stains by reorganizing store. Moreover, it will be helpful for sourcing materials, inventory control, eliminate unnecessary stock and wastage. Please refer to the following article to improve inventory control
Emphasize on proper use of fabric: Fabric is a mandatory element which cost is the major part in considering the total cost of making a garment. So, use modern equipment in pattern making, CAD and cutting section to minimize fabric consumption. It will help you to reduce fabric consumption, fabric wastage, and leftover as well as inventory control that will enhance your profit margin.
Procure reasonable fabric width: Fabric is available in different widths or diameters. Fabric price mostly depends on the fabric width. Sometimes fabric manufacturer fixes fabric width on consumers demand. So, it would be better if procure most reasonable fabric considering products dimension. Emphasize on to use full width of a fabric and urge pattern maker to improve marker efficiency for reducing fabric wastage. Please check approved sample and mini marker physically to ensure proper use of fabric width before placing order to fabric suppliers.
Emphasize on piece rate production: It would be better if you launch price rate operation system in your factory for cost minimization. It’s a perfect option for small entrepreneurs. By this system, you have to pay operators according to their daily production capabilities. It will motivate operators to give more production units to enhance their earnings. It will assist you to reduce direct labor cost. But it’s not fruitful in big organization.
Conclusion: I have tried to amalgamate some points for you to reduce manufacturing cost. These tips are not only fruitful for small garment but also perfect for a larger factory. I strongly believe that if someone focuses on these issues to reduce cost it will bring a big difference in your business and smack down total production cost day by day.

If you have any good advice regarding this issue please share with us by giving commenting below.

Here I have attached a file to know how to get product costing. You are requested to click my google drive link to get a fantastic guideline regarding product costing. Please hit the link to download your desired file.

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