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Complete Training Cost-Benefit Analysis

Complete Training Cost-Benefit Analysis of Workers

This article will provide your complete training cost benefit analysis of garment workers. Suppose 5000 workers are working in your factory. You are not able to reach the target productivity level. After critical evaluation of the productivity of every worker, you have identified that 500 workers are performing below the expected level. The actual productivity is 50% for these 500 workers, which was estimated to be 65% on an average. And you also come to know that they have lower productivity because of lack of skills and experience. You cannot just replace this large number of workers with skilled one because getting skilled workers is hard to find and time-consuming process.

Complete Training Cost-Benefit Analysis

So it will be a better choice for you to provide the training, that will improve their skills, which results in increased productivity and lower in cost. But before that, you must do a cost-benefit analysis of investment for the training program and also calculate the return on investment. If you get a positive result, then you must go for the investment of the required training program.

A proper training plan and materials must be prepared by export from the related field, otherwise, your investment will become a loss project.

Training Plan of Garment Workers

To provide training you have to be ready with the following things

  • How many people will receive training?
  • Training for how many Days (Whole day training or few hours of a day)
  • Workshop training will be provided with a practical opportunity of learning
  • Course materials will be provided by the company (if it is required)
  • Company will arrange this training program at its own cost
  • Food allowance will provide by the company for the training days

Training Cost May Includes

  • Consultant/Trainer Fees
  • Training Facilities arrangement
  • Recreation/Food Allowance
  • Course Materials (Book containing visual images of the required processes)
  • Opportunity Cost of Reduced Productivity of the training days

Calculation of Training Cost Benefit

Following parameters are required:

  • Total number of worker will receive training = 500 person
  • The training program will be for = 3 Days for each batch
  • Number of hours of training = 8 Hours/Day
  • The total training program will be for = 3 Days x 8 Hours = 24 Hours
  • Total 50 people will receive training for 3 Days in a Batch
  • Number of batch required = 500 Person/50 Person a day = 10 Batches
  • Total Days Required for this training program is = 10 Batch x 3 days = 30 working days
  • Number of Trainer = 2 Person
  • Average Salary of Workers Per Month = 9,000 BDT/Month
  • Total Working Hours in a Month = (8 Hours x 26 Days) = 208 Hours
  • Average Salary of Workers Per Hour = (9,000 BDT/208 Hours) = 43.27 BDT/Hour

Cost Estimation of Training Program

  • Total Consultancy/Trainer Fee = (30 Days x 20000 BDT) = 600,000 BDT
  • Food Allowance = (500 Person x 3 Days x 100 BDT) = 150,000 BDT
  • The cost of training facility arrangement = 300,000 BDT
  • The cost of Training materials = 400,000 BDT
  • Opportunity Cost of Losing Productive Hours = (500 Person x 3 Days x 8 Hours) = 12,000 Hours
  • Total cost of Productive Hours = (12,000 Hours x 43.27 Average Hourly Salary) = 519,240 BDT

After summing up all these expenses, you will get the total cost of the above training program.

Total Cost of Training = (600,000 BDT + 150,000 BDT + 400,000 BDT + 519,240 BDT) = 1,669,240 BDT

Note:

  • The training cost can vary industry to industry, training method to method.
  • The training cost is highly depending on the scope of the training program.
  • It is not necessary to provide food allowance and training course materials for the garments workers. But if you provide, then it will be beneficial for them. Although it is costly for most of the garments.

Calculation of Existing Productivity

Suppose if a factory can maintain 100% efficiency then a worker production capacity should be 1000 piece a day. You are expecting that your factory worker’s productivity should have 65%, which is 650 piece a day. But your factory running at 50% capacity, based on the production of 500 pieces a day.

  • Expected Productivity = (650 Piece of Work /1,000 Piece of Work) = 65%
  • Actual Productivity (Before Training) = (500 Piece of Work /1000 Piece of Work) = 50%
  • Actual Productivity (After Training) = (550 Piece of Work /1000 Piece of Work) = 55%

Cost Benefit Analysis of Training Program

  • Daily Production Will Increase for each worker = (550 Piece of Work – 500 Piece of Work) = 50 Piece of Work a Day
  • Total Daily Increased Production = (50 Piece of Work x 500 Workers) = 25,000 Piece
  • Total Monthly Increased Production = (25,000 Piece of Work x 26) = 650,000 Piece of Work in a Month
  • Suppose a piece of work has a value of 0.070 BDT then total Benefit your factory will get = (650,000 Piece of Work x 0.70 BDT) = 455,000 BDT
  • Total Yearly Benefit = (455,000 BDT x 12 Months) = 5,460,000 BDT
  • Wages and Salary Expenses = (500 Worker x 9000 BDT) = 4,500,000 BDT
  • Cost Per Operation (Before Training) = (4,500,000 BDT/ (500 Workers x 500 Piece a Day x 26 Days) = .692 BDT per Piece of Work
  • Cost Per Operation (After Training) = (4,500,000 BDT/ (500 Workers x 550 Piece a Day x 26 Days) = .629 BDT Per Piece of Work
  • Total Reduction of Cost per Piece of Work = (.692 BDT – .577 BDT) = .063 BDT
  • Cost Reduction Percent = 9.10% because of increased productivity

Calculation of Return on Investment of Training Program

  • Return on Investment of Training Program = (Yearly Total Benefit/Total Investment) x 100 = (5,460,000 BDT/1,669,240 BDT) x 100 = 327.09%

Calculation of Cost Benefit Ratio of Training

  • Cost Benefit Ratio = (Yearly Total Benefit/Total Cost) = (5,460,000 BDT/1,669,240 BDT) = 3.27:1

That is, if you invest 1 BDT then you will receive benefit of 3.27 BDT which is more than three times of the investment amount.

Note:

  • All numbers are taken assumption basis, so these numeric results are not 100% accurate to the apparel industry.
  • BDT is used as a currency; you can use of your own currency.

Written by
Md. Nahian Mahmud Shaikat

Email: [email protected]

GSM of Fabric: Meaning and Calculation

You will not find anybody who is working in different processing of apparel manufacturing but didn’t have any idea about GSM. Simply, GSM is the unit for weighing of fabric. Actually not only fabric but GSM is also used specifying the weight of paper, lather or any sheet-like materials.

GSM of Fabric: Meaning and Calculation

What GSM Stands for?

GSM is the abbreviation Grams per Square Meter. It says the weight of one square meter of fabric. That means if we make a piece of fabric whose area is just 1 square meter and weighted in a balance what the reading shows will be the GSM of that fabric.

Calculation of Fabric Gram Per Square Meter (GSM)

If we need to check/calculate the weight of any fabric, what we do? We cut a circular shaped piece of fabric by GSM cutter and put it on an electronic balance. Balance shows the reading 1.80gram, we proclaim that the fabric has Gram Per Square Meter (GSM) 180 moving the decimal for two digits from the balance reading. Why we do this? Though GSM is the weight of one-meter fabric why we measure of such circular piece fabric?

There is very silly but interesting math in it. Let’s have look.

Measurement of GSM

It is much difficult to measure fabric weight by making a piece of fabric of 1 square meter and it will be a wastage of fabric as we have to check the weight for several times of same fabric. Then what can we do? If we make the specimen 1/100 of 1sqm i.e., 100 square centimeters, now weigh the piece of fabric of 100square centimeter and multiply the reading by 100, we will find the GSM of the fabric.

That means it is more convenient to measure the weight with a piece of 100square centimeter, rather than 1square meter.

Now the problem is that our GSM cutter is circular shaped, not square. Let us think if the GSM cutter is square-shaped, will that be possible to cut the piece by screwing the cutter?

That’s why GSM cutter is circular shaped. Now we need to find out a circle whose area is 100cm2. It is pretty easy, just back to the High School Geometry. We know, area of a circle is πr2.

Now if we summarized it then comes, the radius of our GSM cutter is 5.64cm and the area of the circular piece of fabric that we found by the GSM cutter is 100cm2. We will find GSM of that fabric by multiplying the weight reading of 100cm2 fabric by 100.

Written by

Galib Hossain

Senior Merchandiser at Centro Tex Ltd.

Sizing: Meaning, Purpose, and Modern Process of Textile Sizing

What is Sizing

Sizing is the process of applying different size solution with paper or textile materials. In the textile industry, sizing solution is used on the twisted yarn (cotton, linen, and polyester) surface during weaving, so that the strength of yarn can increase and reduce the hairiness. Commonly used sizing solutions are an adhesive, softener, binding agent, anti-mildew agent, hygroscopic agent, anti-foaming, and wetting agent. Normally 15% of sizing materials are added with 85% of water to prepare the sizing solution. The solution preparation is depending on the type of yarn and the machine will be used in weaving. The main problem of sizing is the actual shade of yarn may change.

Sizing: Meaning, Purpose, and Modern Process of Textile Sizing

In this article, we will have a discussion on the sizing meaning, the purpose of sizing and modern automated process of textile sizing. You know, sizing is the process of coating with different size solution to ensure the supply of good quality yarn for weaving.

Sizing Meaning, Purpose, and Modern Process of Textile Sizing

Purpose of Textile Sizing

The purpose of sizing is to apply size solution on to the warp yarn surface during weaving warp yarns under high tension and vigorous abrasion. So that we can get the following benefits:

  • Sizing particularly on cotton yarn will increase the yarn strength and reduce the yarn breakage.
  • Sizing helps to reduce the yarn hairiness
  • Sodium Phosphate is used to Increase the overall weight of cotton yarn.
  • Because of using softener, the yarn softness will increase.

Process of Textile Sizing

A sizing machine is used to size the yarn before using it for weaving. Sizing machine is generally composed of four sections; the beam creel, size box drying, chamber, and winding head.  The process of textile sizing is given below:

  1. Warp beams are attached on a beam basket pneumatic warping brakes are fitted on the beam stands. It is used to reduce the warp let-off speed by applying a suitable pressure so to adjust the warp tension.
  2. The brake system can also stop the beam instantly to avoid further rotation due to inertia.
  3.  Cooked size solution is pumped into the size box and the size solution is applied to the yarn by application rollers. It is important to control the size box temperature and yarn tension during size application.
  4. Sized yarns are then passing through a series of steamrolls in the drying chamber. Yarn should have good contact with the steamroll surface for a good drying result.
  5. At the front end of the sizing machine, the yarn separation rolls separate the warp sheet into individual yarns. In order to give a uniform yarn layout for winding onto the beam.
  6. The adjustable Reed controls the width of the warped being wound onto the beam while the press rolls control the warp density of the beam, hence more yarn can be wound onto it. Warp length is marked by a stamping device. This mark assists the operator to cut the continuous fabric into rolls according to the required length during weaving.
  7. Process parameters such as; winding speed, and tension, moisture content, Creole tension, drying temperature, and size can be controlled by the control panel located at the front end of the machine.

Written by
Md. Nahian Mahmud Shaikat
Email: [email protected]

Break Even Analysis of Apparel Industry

Break Even Analysis of Apparel Industry

Break Even Analysis is one of the most popular and effective tools of cost volume and profit analysis. By using this we can calculate production quantity/sales quantity and their values whether there is a situation of neither profit nor loss. Apparel Industry is growing in India, Bangladesh, Vietnam, and the future of the apparel industry is very much competitive and challenging. Every year new modern garments factories are establishing to produce different garments to meet the worldwide increased demand for apparel. Here in this article, you will learn why break even analysis of apparel industry is required. Break-even point can be calculated for your whole factory, individual machine, equipment, production floor or any other investment opportunities. You can identify both forecasted BEP and actual BEP as required.

As an investor, you must be careful about making an investment decision. The main concern should be the minimization of the production cost of garments and increasing the production of garments. Different project appraisal techniques like; cost-benefit analysis, break-even analysis, capital budgeting, etc. are used by the entrepreneur or manager to make the right financial decision. Normally the company is not aware of the break-even point if it is running a profit. But in the case of losing concern, the company must try to avoid loss situation to ensure the survival of the company. Break-even point analysis is also known as BEP analysis.

Calculation Break Even Point and Analysis of Apparel Industry

To calculate breakeven quantity or value, you will be required to have the following information:

  1. Sales Price Per Unit
  2. Total Sales Quantity/ Expected Sales Quantity
  3. Variable Cost Per Unit
  4. Total Fixed Cost

If you have a total sales amount and quantity of sales, then you can easily get the average per-unit sales price by dividing the sales amount with the sales quantity. Another thing is if your company produce many varieties of products and there is a far difference in price then it will be good for you to choose a weighted average sales price instead of calculating average sales price.

On the other hand, the variable cost per unit is the amount of cost which remains fixed for any level of production or sourcing.

For your better understanding, I am giving a simple example of break-even analysis in details.

Break-Even Analysis Equation or Formula

Break Even Formula

Two basic formulas of break-even analysis are most popular, one is used for calculating the break-even quantity and another one is for break-even values.

Break Even (Quantity) = (Total Fixed Expense)/(Sales Price Per Unit-Variable Cost Per Unit)

Contribution Margin Per Unit = Sales Price Per Unit – Variable Cost Per Unit

Total Contribution Margin = Total Value of Sales – Total Variable Cost

Break Even (Dollar) = (Total Fixed Expense)/(Contribution Margin Ratio)

Contribution Margin Ratio (CM Ratio) = (Total Contribution Margin)/(Total Sales)

Break Even Analysis Example

break even analysis graph

In this break-even graph, you can see that with the increase in sales volume fixed cost remains the same for a particular period but the total cost is increasing. Total cost includes fixed cost and variable cost. Only increase of variable cost is there with the increased in production or sales. Here the thing is when you increase the sales, per unit fixed cost, will be reduced but total fixed cost remains the same. Fixed cost is shown by the straight horizontal line in the graph. On the other hand per unit variable cost will remain unchanged but the total variable cost will increase. So there is a relationship between cost, sales quantity, break-even unit, and profitability.

Calculation of Break-Even Point

Suppose you are the manufacturer of T-shirt. You want to calculate break-even quantity and value (USD) for a particular year. So that you can determine your minimum requirement of production to run your factory at profit. Based on the following information when you put the values in the above formulas you will get the value of break-even point.

  • Sales Price Per Piece: 1.6 USD
  • Variable Cost Per Piece: 1.01 USD
  • Total Fixed Cost: 500,000 USD
  • Sales (Quantity): 1,000,000 Piece
  • Total Sales: 1,600,000 USD
  • Contribution Margin Per Unit: 0.59 USD
  • Total Contribution Margin: 590,000 USD
  • Contribution Margin Ratio: 0.37
  1. Break Even (Quantity): 847,458 Piece
  2. Break Even (Value): 1,355,932 USD

Here, the break-even quantity is 847,458 piece, this means you have to produce this number of the T-shirt to remain a situation where there is no profit and loss. On the other hand, you need to sale total of 1,355,932 USD. If you can sell more than this then you will get profit. That is in addition to your break-even there will be an addition to your profit amount. So this is an easy way to set the target of your factory.

Break-Even Analysis Excel Template

I have developed a simple break-even analysis excel template for your better understanding and which is available for free use. You can use the excel template as a break-even calculator. All you need to input the values of cost and sales. If you want to get this then please comment with your email.

Calculate Garments Break-Even Production

There is no such difference among the BEP calculation and analysis of the different industry. The same methodology is applicable to the apparel industry and others. So to calculate garments break-even unit or value, same formula mentioned above you can use. All you need to gather information on your garments annual fixed cost, weighted average sales price and per unit variable cost. If you do not know how to calculate the weighted average cost then please let me know. I will write a detailed article on it.

Garments Break-Even Analysis

Analysis of Garments BEP is obvious for new garments industry or running company which is finding it hard to make a profit or incurring losses. Whatever result you will get from the calculation to find out the BEP unit or the amount you can decide what should be your target. Moreover, this will help to make the right economic decision for your factory. If you have any question regarding break-even point analysis of apparel industry then please contact with me. I can help you to calculate break-even for your whole factory, parts of the factory, machine or a production floor.

Written by
Md. Nahian Mahmud Shaikat

Ginning: Cotton Ginning, Process, Types, and Objectives

Ginning: Cotton Ginning, Process, Types, and Objectives

What is Ginning? To answer the question what is ginning? I would say, the process by which the fibers are separated from the seeds is called ginning. Human using cloth for the last seven thousand years. From the beginning, the cotton fiber is manually processed by hand until the 18th century. When automated cotton the processing machine was invented that time ginning process become so easy. Here we will discuss Ginning: Cotton Ginning, Process, Types, and Objectives.

It is one of the most important steps of the spinning process. After collecting seed cotton from the field, cotton moves to nearby gins for separation of lint, seed and any other foreign particles. The production of a typical gin is about 12 bale per hour (here 1 bale = 500 pounds). Earlier the ginning process is to be done by manually but right now for higher production, manufacturers use an automated machine with higher productivity. The machine is well known as a cotton ginning machine.

What is Ginning, Ginning, Ginning of Cotton

Simply to define ginning we can say that the process is used to get the cleaned cotton by separating or removing the seeds, dust or any other foreign particles. So that better cotton can be offered for the cotton spinning mills.

Objects of Ginning

  • To make the fiber-free from seeds without gin-cut fiber.
  • To ensure the best quality of cotton and get the fair price of cotton in the market.
  • To be confident that fiber does not contain excess and unexpected seeds or any other particles.
  • To make the spinning process easier and effective

Cotton Ginning Process

  1. At first, the cotton is made to go through dryers to reduce moisture content.
  2. Then the cotton is made to go through cleaning equipment to remove foreign particles or materials.
  3. The cotton is then sent to the air conveyed to gin stands where revolving circular saws pull the lint from the saw teeth by air blasts or by rotating brushes.
  4. The cotton is compressed into 500 pounds weigh contained bales.
  5. Then the bales of cotton are shipped to the textile spinning mill for further processes.
  6. To ensure better quality the overall process is monitored by a quality control team.
ginning process of cotton
Ginning of cotton

Modern Cotton Ginning Process

In an automatic modern ginning process of cotton, a modern machine is used. Before cotton arrives at the spinning mill to spin into thread and woven into the fabric, it makes the journey from field to bale. Cotton needs about five months to grow from a planted seed to a ready plant.

  • The harvesting machine named cotton picker plucks fluffy seed cotton out of the plant’s boll and leave a trail of burrs and sticks behind.
  • The machine empties the pulled cotton into a tractor-drawn buggy.
  • The machine builds the seed cotton into a humongous rectangular block called a module.

A truck transports the module to the processing plant, which is known as a cotton gin. Once the cotton arrives at the processing plant, sticks and burrs are removed as well as any lingering debris and seeds. A truck dumps the module into a feeder, which moves the packed seed cotton into a dispenser.

The ground seed cotton falls onto a conveyor belt, which leads to the hot box, then the hotbox mixes the seed cotton with hot air, which allows the moisture to evaporate, making the seed cotton easier to clean.

  • A machine called the Wad Buster breaks up the clumps of seed cotton by tossing it against a screen. Loose remains fall through the screen openings down a narrow chute.
  • Then the seed cotton moves through a machine called the steady flow, which divides it equally between two processing lines.
  • On each line, the seed cotton enters a Burr Machine, which grabs the seed cotton with a circular saw and swings it against metal bars

The centrifugal force shakes off the heavier debris. The seed cotton passes the machine through one pipe and the debris through another. A large auger transfers the debris to a waste drop and out of the plant. Then the seed cotton is ready for the final step of processing.

A network of pipes feeds a row of machines called Gin Stands. The gin stand separates the seed from the fluffy stuff, called the lint. Inside each stand are arranged horizontally, each separated by a steel rib. The saw teeth grab the seed cotton and pull the lint through the narrow gap between saw and rib. The seeds are too large to pass through, so it spins in front of the rib, then drops into a conveyor. The lint goes into a flue, which leads to the packaging area. And then use this cotton in the spinning mill to make the thread.

Types of Cotton Ginning

There are two basic types of Ginning you may find. These are:

Saw Ginning of Cotton

Rather than manual ginning, saw ginning is used which provides more clean cotton compared with manual or handheld separation process of seed from cotton.

Advantage of Cotton Saw Ginning

  1. Saw ginned cotton is more uniform
  2. Cotton is more clean than usual.

The Disadvantage of Cotton Saw Ginning

  1. Possibility of fiber breakage due to draw up the fiber from the surface of the seed.
  2. Increase neps
  3. Increase short fiber content

Roller Ginning of Cotton

In the case of modern ginning, an automated roller is used in the ginning process of cotton. Nowadays this type of ginning technology is highly used for industrial purpose.

Advantage of Roller Ginning of Cotton

  1. Fiber quality is better compared with saw ginned cotton.
  2. High production because of the use of advanced technology in the ginning process.

The Disadvantage of Roller Ginning of Cotton

  1. The moisture of seed mixes up with fiber in processing which causes cake cotton fault.

Faults in Ginning Process of Cotton

  1. Gin-cut fiber
  2. Crushed seeds
  3. Neps formation
  4. Too much wastage

Written by
Engineer Sheikh Nurja, and
Md. Nahian Mahmud Shaikat