Tag: CM variance Analysis

CM Analysis and Feedback of Garments

This analysis is done in a famous knit factory of Bangladesh based on SMV, CM, and efficiency. SMV -efficiency variance, CM earning and loss report also included in this analysis. Hope this article would help you.

Dec’18 to Feb ’19 all unit DPR summary

1. Total Sewing quantity: 14.28 M PCs
2. Average MKT SMV/PCs: 8.93
3. Average Sew SMV/PCs: 8.72
4. Average Layout MP(OP+HLP): 36
5. Average Used MP(OP+HLP): 38
6. Average Expected Efficiency: 44.93%
7. Average Achieved Efficiency: 42.54%
8. Average MKT CM/DZn: $8.60
9. Average PLAN TGT CM/DZn: $11.72
10. Average SEW CM/DZn (USED)       :  $13.52
11. MKT Vs Plan Tgt CM Variance: $3933.0123 M
12. MKT Vs Used CM Variance: $6192.5275 M
13. Plan Tgt Vs Used CM Variance: $2259.5151 M

Dec’18 to Feb’19 unit-01 DPR summary

1. Total Sewing quantity: 5.49 M PCs
2. Average MKT SMV: 8.44
3. Average Sew SMV: 8.26
4. Average Layout MP(OP+HLP): 34
5. Average Used MP(OP+HLP): 42
6. Average Expected Efficiency: 48.61%
7. Average Achieved Efficiency: 35.74%
8. Average MKT CM/DZn: $8.20
9. Average PLAN TGT CM/DZn: $9.62
10. Average SEW CM/DZn (USED)           :  $14.61
11. MKT Vs Plan Tgt CM Variance: $228.0043 M
12. MKT Vs Used CM Variance: $1024.7610 M
13. Plan  Tgt Vs Used CM Variance: $796.7567M

Dec’18 to Feb’19 unit-02 DPR summary

1. Total Sewing quantity: 4.14 M PCs
2. Average MKT SMV/PCs: 9.30
3. Average Sew SMV/PCs: 9.05
4. Average Layout MP(OP+HLP): 37
5. Average Used MP(OP+HLP): 33
6. Average Expected Efficiency: 43.08%
7. Average Achieved Efficiency: 52.08%
8. Average MKT CM/DZn: $8.68
9. Average PLAN TGT CM/DZn: $12.84
10. Average SEW CM/DZn (USED)       :  $9.87
11. MKT Vs Plan Tgt CM Variance: $515.6169 M
12. MKT Vs Used CM Variance: $147. 5045 M
13. Plan  Tgt Vs Used CM Variance: $368.1123 M

Dec’18 to feb’19 unit-03 DPR summary

1. Total Sewing quantity: 4.64 M PCs
2. Average MKT SMV/PCs: 9.18
3. Average Sew SMV/PCs: 8.97
4. Average Layout MP(OP+HLP): 37
5. Average Used MP(OP+HLP): 39
6. Average Expected Efficiency: 43.16%
7. Average Achieved Efficiency: 39.51%
8. Average MKT CM/DZn: $8.92
9. Average PLAN TGT CM/DZn: $12.68
10. Average SEW CM/DZn (USED)       :  $16.19
11. MKT Vs Plan Tgt CM Variance: $508.2320 M
12. MKT Vs Used CM Variance: $982.4476 M
13. Plan Tgt Vs Used Tgt CM Variance:  $474.2156 M

*Data Source

1. Data based on the Daily Production Report(DPR)
2. CM based on Finance dept. report
3. CPM based on Finance dept. data (.0358 $)

CM Variance

Unit Wise CM Variance

Buyer Wise CM Variance

Average Marketing VS Average Used CM

Average Plan Target VS Average Used CM

Findings from Analysis

• CM loss at Marketing  $3,933.0123 [Dec’18-Feb’19]. Only Buyer ‘Promodoro’ Marketing CM gain $5.8259.
• Average Marketing SMV & Average Sewing SMV difference 0.21. SMV used in production less than Marketing, which is a positive fact to gain profit.
• CM loss of Unit-01 & Unit-03 in production, use of more manpower than Marketing, the achievement of less efficiency than Marketing are the reasons for the loss in CM.
• In Unit-02, efficiency gain (52.08%) is more than expected (43.08%) but used CM is more than Marketing & Less than Plan target CM.  If there was no loss during Marketing, CM gain would be profitable.
• Efficiency variation avg 2.40% than expected which results in total CM loss.

Feedback from Analysis

• CM based target need to establish for-profit gain in CM.
• The capacity calculation/ projection should be followed by CM considering SMV, Manpower, Working hour, Efficiency as well as Quality.
• CPM should be standardized/similar for all buyer & all units.

The Necessity of CM Based Target Set-up

• Currently, Garments profit calculation based on FOB. But in practice, it is the total performance of Textile, Fabric finishing, sewing, printing, embroidery, Garments finishing, logistics, etc. & investors profit percentage, deficiency cost.
• Profit calculation & evaluation will be equal for all units.
• CM based target can be used for other units like Textile, AOP, Finishing, Dyeing, etc. to measure performance more precisely.

Pre-activities for CM Based Capacity Allocation which we Want to do for Future

• Production floor should be Industrial Engineering database controlled.
• 6S/7S Training & auditing system should be established for all employees of all departments.
• Floor IE must know operation breakdown, CM & Efficiency analysis.
• Line balancing, workstation standardization, lean management training needed for IE & production people also.
• No modification in Line layout (SMV, MP, M/C) will happen by approval of Corporate IE department.
• The cutting section should be IE based CM calculation to improve efficiency & gain profit from Cut-make section.
• Finishing section should be IE based CM calculation to improve efficiency & gain profit from the make-trim section.
• The textile sector should be IE based to reduce re-process & re-work. In the long run, it will gain more profit from the textile sector.
• Printing IE activities will be vast to CM based capacity allocate for making it more precise in profit gain & efficiency achievement.
• Other production units need to Industrial Engineering controlled to achieve target efficiency & profit.

A Positive Outcome from Proposed Implementation Ideas

• There will be no CM loss during marketing stage. Use of similar CPM will lead the marketing team to work for plant target CM wise order taking.
• CM loss will not happen in the production stage with proper manpower utilization, efficiency achievements; quality products by IE based production system.
• CM profit is the core profit percentage of FOB & our factory profit margin will increase by proper implementation of IE-based activity in every sector.

Written By
Sharmin Akther Diba
Industrial & Production Engineer
Rajshahi University of Engineering & Technology
Email: [email protected]
LinkedIn: Sharmin Akther Diba