Textile Industry – Cost Efficiency Projects

July 2024

Textile businesses entail high volumes and low margins. That requires continuous cost-control activities to be maintained. Corpocheck offers cost efficiency projects across the value chain, to both fashion houses / buyers and factories, starting from the garment and BOM levels.

Fashion Houses / Buyers

Garment production costs can vary from one factory to another, and from one sourcing strategy to another – CM or FOB:

• At the factory level, costs vary from one geography to another. And in any given geography, costs vary from one factory to another based on the levels of production efficiency (see below).
• If you apply a CM sourcing strategy, costs can also vary based on material suppliers being engaged, and negotiation of trading terms.

Given specific tech packs, our cost efficiency projects can include research and activities on both levels.

Factory Operations – DB BOMs

DB BOMs are an accurate way to map and maintain garment BOMs. Such mapping clarifies how the quantities of both fabrics and trims change in accordance with garment styles, colors, and sizes. The value created by maintaining such DB BOMs stems from the following:

• Accurate MRP calculations can be rapidly performed – i.e. what quantities do we need from each material – given garment quantities, colors, and sizes.
• Material Waste (%) can be included for each material, for easy consideration while preparing the purchase order (PO).
• Supplier product codes can be recorded for each material. Thus, the act of issuing a PO can be as simple as copy-paste from ERP or Excel.
• Item numbers can be used to identify different garments that share the same fabrics / trims in common. As such, POs can consolidate the quantities required for different garments, to support better trading terms.

We can set up the practice of DB BOMs with your team.

Factory Operations – Financial Control

Textile factory profitability is difficult to control, as small deviations in material ordering, material consumption, capacity utilization, overhead, and more – can change the financials significantly.

We support factory profitability by proposing a budget based on high-resolution operational parameters. Then it can be monitored for actual performance, deviations. Examples are:

• The number of workers needed for making any given garment style.
• The number of garments made by lines.
• Workers’ salaries.
• Actual material consumption compared to BOMs and expected waste.
• Overhead by types of expenses.

Our periodical reports (monthly / quarterly) support real time tune ups for healthy financial performance.

Let’s consider the type of cost-efficiency project that may keep your financials on track. Contact Us