product costing and manufacture
TRANSCRIPT
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
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