product costing and manufacture

PRODUCT COSTING ANDMANUFACTURE

Anna EllisCFE Production Manager

• 20+ Years Experience• Production• Product Development• Supply Chain

Management• Global & Domestic

Sourcing

The CFE have been supporting fashion design businesses since 2003. Our successes include:

Product Lifecycle

Product Design

Sales Purchasing

Raw Materials

Production

Delivery

Research

Product Development

All these job functions!

DesignerPattern Cutter

Product DeveloperGarment TechnologistProduction Manager

Quality Assurance Manager

Designer• Inspiration• Fabric Source• Research • Trim source• Range Plan• Design drawing / sketch• Tech pack• Fit

Pattern Cutter• Translate sketch into pattern• Block• Fit• Work with designer• Make initial pattern• Make amendments to patterns for

samples and production• May also grade patterns for bulk

production

Product Developer• Works closely with Designer• Responsible for producing Sales

samples• Research / Source fabric• Research / source trims• Sample in house or at factory• Initial costing

Garment Technologist• Garment fit• ‘Fit for purpose’• Factory visits• Garment details• Fabric testing• Wearer trials• Supplier Manuals• Garment sealing process

Production Manager• Costing• Price negotiations• Sourcing manufacturers• Sourcing fabric mills• Production Planning• Bulk production / production issues• Delivery schedules• Factory visits

Quality Assurance Manager• Bulk inspection• Customer returns• Quality manual• Preventative measures• Factory visits• Warehouse visits

Product Cost

“THE FINANCIAL COST INCURRED IN THE CREATION OF A PARTICULAR PRODUCT”

Businessdictionary.com

Why Product Cost?

RELATIONSHIP WITH PRICING

Must have a good understanding of cost when determining or negotiating price.

• Full Cost Pricing

Retailer / wholesale / own business

Percentage profit or mark-up added to cost to determine selling price.

Typically: cost price to wholesale price x 200%

wholesale price to retail price x 280% +

Why Product Cost?

RELATIONSHIP WITH PRICING

• Acceptance Pricing

Manufacturer / supplier

Retailer sets price for product

Must know cost to determine if this price can be achieved.

Why Product Cost?

•PROFIT

The price you sell at must be more than the cost to make in order to make a profit.

Businesses need to make a profit in order to stay in business!

Costs associated with product:• Raw Materials (Fabric and Trims)• Printing• Embellishments• Dyeing• Make Cost• Packaging• Duty + VAT (non-EU)• Freight• Overheads

Fabric• Main fabric is largest raw

material cost• Fabric utilization (how many

metres per garment) – lay plan• Printed fabric• Lining

Raw Materials (at least 50% of total cost)

Trims• Include placement prints or embroidery• Interlining• Labels and swing tickets• Hangers and polybags• Thread usually provided by factory• Create BOM (Bill of Materials)

Raw Materials

Make Cost (approx. 30% of total cost)• Preliminary cost at development stage - rough estimate to

determine if design is viable within cost range.• Factory will give price after making sample. Price quoted

should be Production Cost. (Sample cost will typically be double the Production cost)

• Time taken depends on number and complexity of manufacturing processes needed.

• Time factors include seam types, lined, placement prints, embellishments, types of trims

• Negotiate. Ask for price breakdown. Can amendments be made to bring down the price without compromising the aesthetic?

TIME

CHARGE PER

HOUR

CMT

Make Cost (approx. 30% of total cost)Garment Manufacture Processes

Process Time (hours) Price Spreading 0.12 0.30Cutting 0.42 1.80Sewing 1.30 4.21Finishing 0.18 0.50Inspection 0.24 0.60Packaging 0.24 1.20------------------------------------------------------------

2.50 8.61

TIME

CHARGE PER

HOUR

CMT

• Duty to be paid for goods imported into the UK from non EU countries.

• Duty rate is determined by the fibre cotton, category (mens, womens) and details (eg: Mens Overcoats, Cotton, Parka, exceeding 1kg)

• Each item is classified with a commodity code.• This code must be included on shipping documents.• Forwarders / Logistic companies

Duty Rates

https://www.gov.uk/trade-tariff/sections

Tariff Codes and Duty Rates

• Truck• Air• Boat• Taxi!• Cost of shipping fabric to

factory if not fully factored

Freight Costs

Tools to Product Cost

• Lay Plan

• Tech Pack

• BOM

• Cost Sheet

• Cost Log

Lay Plan

• To work out how much fabric is needed per garment.

• Lay plan contains all the pattern pieces of the garment, placed on the fabric in the most efficient way to minimize wastage.

• Take into consideration the useable width of the fabric (varies depending on fabric – can be as much as 5cm from edge of fabric)

• Grain line – parallel to the warp line (woven) / wales (knitted)

• Bias cut – grain line is 45 degree angle to warp (or wales)

Tech Pack (see Toolkit)

Bill Of Materials (BOM)

• Lists ALL the components of your product• Colour required for each component• Size required for each component• Quantity required for each component• Add cost for each component to create a

cost sheet for each product

BOM sheet: Season: AW13 Date:

Style no: MC3218MMAW Sample Enclosed: Sample sz: 40

Style Description: MENS REEFER JACKET Factory: ABC FACTORY Size Range: 36 - 48

0Pattern Cutter:FABRIC AND TRIMS COLOURS

CLOTH & LINING SUPPLIER / REF # FIBRE COMP LOCATION UNIT QTY PER GMT NAVY BLACK GREY INDIGO KALE

MM MENCHI/ MINO 80/20 WO/PA MAIN MTR 2.05 NAVY BLACK GREYINDIGO KALE

JESSGROVE 100% ACETATE BODY AND SLEEVE LINING MTR 1.5 BLACK BLACKBLACK

BLACKBLACK

NEEDLE CORD BRISBANE MOSS 100% COTTON TOP POCKET LINING MTR 0.4 SAND SAND SAND SAND SAND

LABELS / TICKETS SUPPLIER / REF # SIZE LOCATION UNIT QTY PER GMT NAVY BLACK GREY INDIGO KALE

MAIN LABEL M2346 BACK NECK, 1CM DOWN FROM NECK SEAM PCE 1 BLACK BLACK BLACK BLACK BLACK

SIZE LABEL SZ1234 SIZE RANGE 36-48 LEFT SIDE SEAM PCE 1 BLACK BLACK BLACK BLACK BLACKCOMP / CARE LABEL 80/20 WO/PA LEFT SIDE SEAM PCE 1 BLACK BLACK BLACK BLACK BLACK

OTHER LABEL M.I.E NECK HANGER (WEBBING CARRIER) PCE 1 BLACK BLACK BLACK BLACK BLACK

SWING TICKET SWCOAT-HT ATTACHED TO SIGNET SEAL PCE 1 BLACK BLACK BLACK BLACK BLACK

SIGNET SEAL SG345 ATTACHED THROUGH NECK LABEL PCE 1 BLACK BLACK BLACK BLACK BLACK

SPARE BAG PLBG 6CM LEFT POCKET PCE 1 BLACK BLACK BLACK BLACK BLACK

HANGER 2" WEBBING 2" M.I.E LABEL CARRIER MTR 0.1 BLACK BLACK BLACK BLACK BLACK

FASTENINGS SUPPLIER / REF # SIZE LOCATION UNIT QTY PER GMT NAVY BLACK GREY INDIGO KALE

BUTTON STERN / 3431 54L CF ANCHOR BUTTON + SPARE PCE 11 BLACK BLACK BLACK BLACK BLACK

BUTTON STERN/ CHESTER 40L INTERNAL LEFT CHEST POCKET PCE 2 BLACK BLACK BLACK BLACK BLACK

BUTTON STERN/ 32551 26L THROAT LATCH + INSIDE POCKETS + SPARE PCE 6 BLACK BLACK BLACK BLACK BLACK

ZIP PCE

PRESS STUDS PCE

HOOK & EYE PCE

HOOK & BAR PCE

CORD MTR 0.1

TRIMS OTHER SUPPLIER / REF # SIZE LOCATION UNIT QTY PER GMT NAVY BLACK GREY INDIGO KALE

HERRINGBONE TAPE MTR 11

HERRINGBONE TAPE MTR 2

BINDING MTR 6

SHOULDER PADS

EYELETS PCE

INTERLINING / POCKETING SUPPLIER / REF # SIZE LOCATION UNIT QTY PER GMT NAVY BLACK GREY INDIGO KALE

FUSIBLE MTR

BONDED

WOVEN

POCKETING

THREADS SUPPLIER / REF # SIZE LOCATION UNIT QTY PER GMT NAVY BLACK GREY INDIGO KALE

SUPPLIER UNIT QTY PER GMT NAVY BLACK GREY INDIGO KALE

ABC SUPPLIER PCE 45

TOTAL COST

BOM sheet: Season: Date:

Style no: Sample Enclosed: Sample sz:

Style Description: Factory: Size Range:

Pattern Cutter:

CLOTH & LINING SUPPLIER / REF # FIBRE COMP LOCATION UNITQTY PER GMT

UNIT PRICE

TOTAL COST NAVY BLACK GREY INDIGO KALE

MM MENCHI/ MINO 80/20 WO/PA MAIN MTR 2.05 14.75 30.24 NAVY BLACK GREYINDIGO KALE

JESSGROVE 100% ACETATE BODY AND SLEEVE LINING MTR 1.5 0.75 1.13 BLACK BLACK

BLACKBLACK

BLACK

NEEDLE CORD BRISBANE MOSS 100% COTTON TOP POCKET LINING MTR 0.4 1.53 0.61 SAND SAND SAND SAND SAND

0.00

0.00

LABELS / TICKETS SUPPLIER / REF # SIZE LOCATION UNITQTY PER GMT

UNIT PRICE

TOTAL COST NAVY BLACK GREY INDIGO KALE

MAIN LABEL M2346 BACK NECK, 1CM DOWN FROM NECK SEAM PCE 1 0.23 0.23 BLACK BLACK BLACK BLACK BLACK

SIZE LABEL SZ1234 SIZE RANGE 36-48 LEFT SIDE SEAM PCE 1 0.05 0.05 BLACK BLACK BLACK BLACK BLACK

COMP / CARE LABEL 80/20 WO/PA LEFT SIDE SEAM PCE 1 0.03 0.03 BLACK BLACK BLACK BLACK BLACK

OTHER LABEL M.I.E NECK HANGER (WEBBING CARRIER) PCE 1 0.09 0.09 BLACK BLACK BLACK BLACK BLACK

SWING TICKET SWCOAT-HT ATTACHED TO SIGNET SEAL PCE 1 0.15 0.15 BLACK BLACK BLACK BLACK BLACK

SIGNET SEAL SG345 ATTACHED THROUGH NECK LABEL PCE 1 0.05 0.05 BLACK BLACK BLACK BLACK BLACK

SPARE BAG PLBG 6CM LEFT POCKET PCE 1 0.05 0.05 BLACK BLACK BLACK BLACK BLACK

HANGER 2" WEBBING 2" M.I.E LABEL CARRIER MTR 0.1 0.25 0.03 BLACK BLACK BLACK BLACK BLACK

FASTENINGS SUPPLIER / REF # SIZE LOCATION UNITQTY PER GMT

UNIT PRICE

TOTAL COST NAVY BLACK GREY INDIGO KALE

BUTTON STERN / 3431 54L CF ANCHOR BUTTON + SPARE PCE 11 0.2 2.20 BLACK BLACK BLACK BLACK BLACK

BUTTON STERN/ CHESTER 40L INTERNAL LEFT CHEST POCKET PCE 2 0.11 0.22 BLACK BLACK BLACK BLACK BLACK

BUTTON STERN/ 32551 26L THROAT LATCH + INSIDE POCKETS + SPARE PCE 6 0.08 0.48 BLACK BLACK BLACK BLACK BLACK

ZIP PCE 0.00

PRESS STUDS PCE 0.00

HOOK & EYE PCE 0.00

HOOK & BAR PCE 0.00

CORD MTR 0.1 0.00

0.00

TRIMS OTHER SUPPLIER / REF # SIZE LOCATION UNITQTY PER GMT

UNIT PRICE

TOTAL COST NAVY BLACK GREY INDIGO KALE

HERRINGBONE TAPE MTR 11 0.2 2.20

HERRINGBONE TAPE MTR 2 0.11 0.22

BINDING MTR 6 0.08 0.48

SHOULDER PADS 0.00

EYELETS PCE 0.00

0.00

INTERLINING / POCKETING SUPPLIER / REF # SIZE LOCATION UNIT

QTY PER GMT

UNIT PRICE

TOTAL COST NAVY BLACK GREY INDIGO KALE

FUSIBLE MTR 0.2 0.00

BONDED 0.11 0.00

WOVEN 0.08 0.00

POCKETING 0.00

0.2 0.00

THREADS SUPPLIER / REF # SIZE LOCATION UNITQTY PER GMT

UNIT PRICE

TOTAL COST NAVY BLACK GREY INDIGO KALE

0.2 0.00

0.11 0.00

0.08 0.00

SUPPLIER UNITQTY PER GMT

UNIT PRICE

TOTAL COST NAVY BLACK GREY INDIGO KALE

ABC SUPPLIER PCE 45 1 45.00

£50.80TOTAL COST

0FABRIC AND TRIMS COLOURS

AW13

MC3218MMAW 40

MENS REEFER JACKET ABC FACTORY 36 - 48

BOM with cost details

COSTING DATESTYLE NUMBER FACTORYSTYLE NAME PATTERN CUTTER

FABRIC / LINING YIELD / QTY PRICE/MTR: Total (incl. VAT)

Main Fabric -£ -£

Lining -£ -£ -£ -£

-£ -£ -£

LABELS / TRIMS QTY PRICEMain Label -£ Size Label -£ Care Label -£ Hangtag -£ Hanger -£ Button -£ Zip -£ Press Stud -£

-£ -£ -£ -£ -£ -£ -£

-£ -£ -£

ADDITIONAL PROCESSESS QTY PRICE-£ -£ -£ -£ -£ -£

-£ -£ -£

MAKE COST £0.00

SKETCHTotal Cost of

Goods-£

COMMENTS

COST SHEET

REF/WIDTH/WEIGHT: USED FOR

SUPPLIER / REF /SIZE: USED FOR

SUPPLIER / REF: USED FOR

SEASON

mark up 2.22 mark up 2.8

mark up 2

mark up 2.8

mark up 2.5

mark up 2.8

mark up 3.34

mark up 2.8

MARGIN MARGIN MARGIN MARGINEXAMPLE : M123 WL902 £40.99 £6.30 Abc £50.00 £97.30 £216.00 54.95% £604.79 £194.59 50.00% £544.86 £243.24 60.00% £681.07 £324.97 70.06% £909.91 25 £2,432.40 £6,081.00 60%

AUTHENTIC COAT

EXAMPLE: M456 ML257 £29.39 £8.95 Xyz £65.00 £103.34 £229.42 54.95% £642.37 £206.68 50.00% £578.71 £258.35 60.00% £723.39 £345.16 70.06% £966.45 20 £2,066.84 £4,588.38 55%PEACOAT

EXAMPLE: L123 FABRIC 1 £49.44 £0.25 ABC £40.00 £89.69 £199.11 54.95% £557.51 £179.38 50.00% £502.26 £224.22 60.00% £627.82 £299.56 70.06% £838.77 10 £896.89 £1,793.79 50%

DRESS

£0.00 £0.00 £0.00 £0.00 #DIV/0! £0.00 £0.00 #DIV/0! £0.00 £0.00 #DIV/0! £0.00 £0.00 #DIV/0! £0.00 £0.00 #DIV/0!

TOTAL ORDER 55 £5,396.13 £12,463.17 57%

GRADING

TOTAL ORDER

QTY

TOTAL COST

VALUETOTAL WS

VALUE %CMTTOTAL

GMT COST W/S PRX

TOTAL FABRIC COST

TOTAL TRIM COST FACTORY W/S PRX R.R.P

STYLE / DESCRIPTION

FABRIC CODE W/S PRXR.R.P W/S PRXR.R.P R.R.P

Pricing options or revisions - columns can be hidden or removedProduction Cost Log

Cost Log (see Toolkit)

Where to Manufacture?DRIVERS TO SOURCING DECISIONS:

•COST

•QUALITY

•VOLUME

•LEAD TIMES (FAST FASHION / SLOW FASHION)

•SUSTAINABILITY

•ETHICAL

•TRACEABILITY

UK Manufacture

PROS• HIGH QUALITY• LOW MINIMUM• LEAD TIMES (FAST FASHION / SLOW

FASHION)• LANGUAGE / CULTURE• MARKETING• COMMUNICATION

CONS

• PRICE

• LOW VOLUME

• FABRIC

• CMT ONLY

PROS• HIGH QUALITY• MULTI VOLUME• LEAD TIMES (FAST FASHION)• COMMUNICATION• PRICE• FULLY FACTORED

CONS

•EXCHANGE RATE

•MINIMUMS

• FABRIC

•BREXIT

Europe Manufacture

PROS• PRICE• FABRIC• HIGH VOLUME• SKILLS• ALL PRODUCTS• FULLY FACTORED

CONS

•HIGH MINIMUMS

•LONG LEAD TIMES

• COMMUNICATION

•WORKING CONDITIONS

Asia Manufacture

PRODUCT LIFECYCLE MANAGEMENT SYSTEMS

https://youtu.be/I89s4S03LKU

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a.ellis@fashion.arts.ac.uk