Apparel Production Planning & Control & Garment Manufacturing Process

Measurement of Sewing Capacity & Efficiency

Reference Material

Developed by

Paul Collyer & Prof. Prabir Jana

New Delhi

Kolkata

Hyderabad

Bangalore

Chennai

Mumbai

Gandhinagar

Kannur

Measuring capacity Measuring capacity of a sewing line is commonly done in terms of number of garments produced per shift, per hour or per month. But as garments do not have standardised work content pcs per hour is not correct representation of capacity. For example factory A sewing 1000 shirts per day and factory B sewing 1300 ladies blouse per day; unless we know the work content of shirt and blouse we can not say which factory has higher capacity. Sewing work is done by operator using a sewing machine; capacity of one sewing operator is 60 minutes per hour maximum. So if a factory has 100 sewing machines 8 hour (480 minutes) shift per day, then capacity of that factory would be 100 x 480 = 48000 minutes per day. This is considered theoretical maximum capacity, as it is assumed that operators are capable of working complete 60 minutes per hour, realistically which is impossible. There are several factors like operator efficiency, absenteeism that influences actual capacity. If the average efficiency of operator for that factory is 90%, then capacity would be 43200 (48000 x 90%) minutes per day. If average absenteeism for that factory is 15% then actual capacity would be 36720 (43200 x 85%) minutes per day. If a blouse style of 20 SMV is planned to be produced then we can expect 1836 pieces produced per day provided there are no other time loss. Efficiency Measurement Measurement of line utilisation or line efficiency is a common measurement in sewing floor of apparel manufacturing organisations. This is calculated by minutes produced/ minutes attended expressed as percentage. In a sewing line of 20 operators a style of 20 SMV is produced in 8 hour shift. If the average daily production of the style is 400 pcs/shift then the Line Utilization or line efficiency can be calculated as under:
Minutes Utilised = SMV X pcs/shift = 20x400 Minutes attended = number of operator X number of minutes per shift = 20 x 480 = 9600 So, line utilisation or line efficiency is 8000x100/9600= 83.33%

This measure is also known as balance efficiency (used commonly in Japanese literature) as the primary reason behind time loss is attributed to poor balancing. The other factors that may be responsible for time loss are: [1] No or improper feeding of cut parts [2] Non-availability of accessories (thread, zipper, cord, etc.) [3] Shifting of operators resulting start-up loss In macro measure the above may be sufficient but while analysing the cause of inefficiency or underutilisation in micro terms we need to take care of various factors thus various measures. Although above measure tells us 1600 minutes (9600 8000) was lost by the line during shift hours but we do not know the break-up. How Copyright DFT-NIFT 2009 1

much time was lost due to balancing problem (waiting for work), how much time was lost due to machine breakdown, how much time lost in repair, etc. Micro measures are required for in-depth analysis of the line and finer control. Here we will list out some commonly used measures, their definitions, formulae to measure, and how those influences other measures and parameters. Contracted time As it says it is time in contract of employment. It is measured usually hours x by number of operators to get total hours potentially available to factory or department. Used in capacity planning and calculation of absence as %. (Contracted hours absence) x expected efficiency = standard hours to be produced as capacity Usually calculated for sections, departments or factories as it is used to calculate absence levels, and capacity and you would not normally do this for individuals. Attended time Time needed for calculation of efficiency and utilisation. It is usually the time operator spent in factory not forgetting to take away any lunch break. (Contracted hours absence) = (shift hours lunch break tea break) = Attended time. Bit more complicated. Usually lunch break is excluded as per your calculation. Tea break is totally dependent upon company policy i.e. do they remove it from the working day. In UK it is usually included in attended time. It is usually calculated for both individuals and lines. Individuals for calculating utilisation and performance (attended off standard). Line for calculating section efficiency and utilisation Off-standard time Off standard time is that time utilised on performing tasks to which SMVs are not allocated. Alternatively an operator earning SMVs is working on-standard. Utilisation is a measure at how well the manager and supervisor control the section and keep operators working i.e. on standard. In most apparel manufacturing factories most operators are on some form of incentive payment whilst they are doing the job for which they are trained and equipped. They are then said to be on standard. If they come off incentive or Off standard then they will have no financial incentive to work hard (Chuter 1998). It is calculated as a percentage of operator attended time (utilisation) and reported in different categories, although the exact categorisation varies but principal categories are wait for work, machine breakdown, unmeasured work, repairs and rejects, sample making, undergoing re-training, work study. Chuter, A.J., 1998b, Introduction to Clothing Production Management, second Ed, 1998, Blackwell Science Ltd, pp 19-20

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Key off standard time categories are usually waiting for work, machine breakdown, repairs, unmeasured work, samples, retraining or new job (many companies do not class retrain as off standard but separate from other production activities and pay make up pay to worker so they earn minimum pay). Although dependent on style changes, not more than 3% of total attended time is generally time for retraining. Off standard time obviously links to operator utilisation measures and efficiency. Most companies show off standard by categories on a daily cost control report by section/line, department and factory with management and supervisory staff targeted to achieve budgeted limits. It is usually calculated for both individuals and lines. Individuals for calculating utilisation and performance (attended off standard). Line for calculating section efficiency and utilisation On-standard time This is the actual time worker spent on productive work. This is calculated as the difference between attended time and off-standard time. This should be obvious and is used in calculating operator performance On standard time = (Attended time Off-standard time) It is usually calculated for individuals as performance calculation is an individual measure but can be averaged into section performance as extra KPI Utilisation It is the time spent on productive time out of total attended time. It is the percentage of attended time working earning Standard Minute Values [SMV]. Utilisation = (On standard time / Attended time) X 100 It is usually calculated for a line as it is a measure of how well the supervisor is running the line. SMV Earned It is the measure of work done by operator. It is calculated from output from an operation generated in attended minutes and SMV of the operation. SMV earned = (SMV X Output in number of units) Used in both performance and efficiency calculations. It is usually calculated for individuals as well as for a line. As it is needed for individuals for incentive payment calculation and performance and needed for lines for efficiency calculation. Also sometimes aggregated for departments and factories to get factory efficiency. This measure or KPI can be called direct (and indirect) labour cost per standard minute produced.

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Key component in incentive schemes of all types. Can be converted straight into money in piecework system, e.g. one sm is worth x rupees therefore total incentive payment is sms earned x by conversion factor. Easy to calculate and understand especially as most operators have access to cheap calculators, even mobile phones. A variant on incentive is SMVs can also be used to calculate performance and different performances are paid at different salary levels. This is very common as it can be weighted to encourage people to achieve particular performances. Ie increments on hourly rates are higher between 80 95 % to encourage people to strive to achieve from a low base but levels off at high performances where workers may be striving to do to much and quality issues may arise. Efficiency It is primarily a measure of the effectiveness of the manager and supervisor and as such is best applied to sections / departments / factories and not the individual operator. It is calculated daily. Efficiency is directly related to both operator performance and the utilisation of the operator. Efficiency = (SMV earned on standard / attended time) X 100

It is usually calculated for a line and not really relevant to the individual unless incentives are paid on efficiency and not performance. It is easy to calculate and a mixture of performance and utilisation. It is an important KPI for managers and measure for capacity planning. It is important to note that this measure is actually fine-tuned measure of Line utilisation or line efficiency or balance efficiency that we have discussed in the beginning. Individual Operator performance It is a measure of both the skills and motivation of the operator and calculated daily. Performance = (SMVs earned on standard / On standard time) x 100 It is usually calculated for individuals and sometimes averaged for a section as a supervisor KPI. As previously stated it is a key for incentive payments. An experienced manager or supervisor will compare performance and efficiency and note variation. A big gap can only mean high off standard time. Is this justified? If the operator trying to work the system to achieve higher salaries or conversely if there is no gap but the supervisor knows the section has problems then is the operator slowing to work supply. It is particularly useful with new or trainee operators whose progress has to be monitored. Also useful to compare this performance calculation with the potential performance measured by cycle timing. Why are there differences?

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Make Up pay Make up pay is not something that has a constant calculation as it is completely as management discretion and/or labour agreements and policies. It can be best defined as an additional payment on top of any incentive earnings to bring salary to an agreed minimum level. In practice depending upon local agreements this can be calculated daily or weekly. This has to be calculated for individuals as it is relevant to pay unless incentives are paid for lines or teams. Sometimes aggregated to a total for lines taken as KPI. Excess Costs Excess costs are those payments to workers that are not direct incentive payments i.e. any off standards, policy or make up pay. The only reason for expressing it as a % of total labour cost is that many companies have a budgeted level that must not be exceeded and is often a KPI for managers and supervisory staff This has to be calculated for individuals as it is relevant to pay unless incentives are paid for lines or teams. Sometimes aggregated to a total for lines as KPI.
It is important to note that there may be different terminology used by different experts, organisations, consultants for above measures. It is the formulae of measure and its implication and use that is more important rather the terminology.

Generally in apparel manufacturing organisations the above measures are recorded daily in spreadsheet package to monitor and control performance of sewing workers. Reproduced below an example of a factorys daily sewing performance.
Factory parameters: On standard pay paid at Rupees 0.50 per minute (local salary agreement) Off standard pay = 15 Rupees per hour (local salary agreement) Guaranteed hourly salary = 15 Rupees (local salary agreement) Excess costs = off standard pay + make up pay + overtime pay Overtime premium paid at 1/3 of basic hourly pay, i.e. 1/3 of Off standard pay. (1/2 of basic pay for weekend work or any overtime over and above 2 hours per day). Company rules on overtime are set in a way to stop operators deliberately coming in late and then working overtime to hit target and drawing overtime premium. Additionally only those who can pay for themselves and not cost make up pay are allowed to work overtime. To pay overtime premium on top of makeup pay makes sms earned very expensive. Additionally if supervisors need production from those who are not eligible for overtime but know they cannot offer it to them will be encouraged to push the operators during normal work hours.

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Off std time Offm/c breakdown Employee number Employee name Operation

Pay Make Up pay Off Std pay Performance % Earned Off Std pay Over Time premium On std pay Utilisation % 90 96 94 0

Overtime

Attended time

Contract time

Re-train

On-Std time

SMVs Earned on std

Output on std

1234

Jeevani

480

600

120

60

60

540

o/lock1 o/lock3 collar make collar topsew collar stand

500 550 520

0.60 0.40 0.80

520

260

15

10

285

96

8.8%

1345

Pushpa

480

420

20

20

400

416

208

213

104

2.3%

1635

Malini

480

480

30

450

350

0.60

210

105

7.5

7.5

120

47

12.5%

1710

Doreen

480

480

30

450

1.10

7.5

35.5

77

120

35.8%

Total

1920

1980

120

20

90

450

110

1390

1920

1146

573

35

10

43

77

738

11.9%

Absenteeism = (1920-1860) x 100/1920 = 3% (for absenteeism calculation overtime, if any should be deducted from attended time) Line efficiency = [(1146+154)]/1980 x 100 = 66% Jeevani is the only person to work overtime as she is the only one who meets company overtime policy criteria. She has attended the whole day and is not costing make up pay. Pushpa was one hour late (only attended for 420 minutes) and caused Malini to wait for work and is not eligible for overtime & both Malini and Doreen have drawn make up pay to take them to the minimum wage. Jeevani spends off std time of 60 minutes therefore earns Rs. 15, spends 120 minutes on overtime therefore earns Rs. 10. SMV earned 520 minutes, so On-Std pay = Rs. 260. Total pay is Rs. 285. Excess cost = Rs. 25... Therefore excess costs =(25/285) x 100 = 8.8% Malini attends for 8 hours, therefore she is entitled for a minimum 8 x 15 = 120 Rupees. She earns 105 Rupees on standard (210 x 0.50) + 7.5 Rupees as off standard (30 minutes) making total of 112.5 Rupees. As she is guaranteed 120 Rupees therefore 120 112.5 earned = 7.5 Rupees make up pay to minimum. Doreen is under retrain and therefore not on standard. She is working on her new job and is therefore earning std minutes for work produced. She produces 140 pieces = (140 x 1.10 = 154 sms) which are paid at 77 Rupees (154 x 0.50 = 77). She has 7.5 Rupees off std pay. But as she is entitiled for Rs. 120 minimum for 8 hours therefore make up pay = 120 (77+7.5) = 35.5 Rupees.

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Excess Cost %

others

SMV

Total std

Total pay

No work