How to Control Apparel Production Cost in Clothing Industry?

Cost Reduction Techniques in RMG Industry

Cost-Saving Ideas in Apparel Manufacturing Industry:

In the readymade apparel business, cost control or cost saving of apparel production plays an important role in the total profit percentage of an apparel export order. This article has shown a lot of techniques or tips for cost control in apparel production.

22 Cost Reduction Techniques in Clothing Manufacturing Industry:

In the apparel manufacturing industry, cost control can be done through the below ways:

1. Proper maintenances of machinery and equipment should be done systematically and continuously with proper scheduling.

2. Effective and efficient production planning will reduce the unnecessary stoppages of machines and the idleness of employees. It increases machine efficiency.

3. Providing periodical training to the employees at all levels about various latest technologies, new and innovative methods of production and control, etc. will improve the effectiveness and efficiency of the work.

4. Unnecessary overtime should be reduced.

5. Employing skilled and experienced laborers will increase apparel production, reduces defective products, etc.

6. Proper handling of various materials, equipment’s and machines should be carried out.

7. Proper allocation of work to various resources like man, machine, money, etc. should be done.

8. Reduce the unnecessary movement of materials by employing proper layout and process sequence in the clothing manufacturing process.

9. Implementation of an integrated production system will reduce different wastages and costs.

10. Effective and efficient supply chain management should be done by using ERP (Enterprise Resource Planning) system.

11. Development and implementation of innovative systems or methods in the various activities in the clothing manufacturing process.

12. Efficient and proper utilization of various resources such as water, steam, power, etc.

13. Establishing standards and specifications for various materials and methods.

14. Getting certifications like ISO 9000, SA 8000, OHSAS, ISO 14000, WRAP, Oeko-tex, etc.

15. Implementation of various total quality management concepts and tools like PDCA, Kaizen, 5’S, Benchmarking, BPR, Quality circle, etc.

16. Using modern sewing machines and equipment for manufacturing will give good quality, more production, fewer wastages, and also they require less manpower.

17. Optimization of the material requirement by using quantitative techniques.

18. Effective monitoring and control system for the use of miscellaneous resources like power, telephone, stationaries, etc.

19. Outsourcing of various activities that need special attention or in which the company is not having much expertise.

20. Providing proper ergonomics and essentials of working circumstances in the company by keeping proper, clean, and neat working conditions.

21. The establishment of a systematic communication system that will provide proper information to the right person at the right time will reduce the wastage, stoppages of machines, etc.

22. Effective inventory control in stores and purchase will reduce the ordering cost, carrying cost of different incoming materials.

Controlling apparel production costs in the clothing industry is crucial for maintaining profitability and competitiveness. Here are several strategies that can be employed to manage and reduce production costs:

Efficient Material Sourcing:

• Bulk Purchasing: Buying materials in bulk can reduce costs through volume discounts.
• Supplier Negotiation: Building strong relationships with suppliers and negotiating better terms can lower material costs.
• Alternative Materials: Using cost-effective or alternative materials without compromising quality can reduce expenses.

Optimizing Labor Costs:

• Skilled Workforce: Investing in training to enhance the skills of workers can increase productivity, reducing labor costs per unit.
• Automation: Implementing automation and technology can reduce reliance on manual labor and improve production efficiency.
• Lean Manufacturing: Adopting lean manufacturing techniques, such as minimizing waste and streamlining processes, can reduce labor costs and improve efficiency.

Reducing Waste:

• Pattern Efficiency: Optimizing pattern layouts can reduce fabric waste during cutting.
• Inventory Management: Proper inventory management, including just-in-time (JIT) production, can minimize excess stock and reduce storage costs.
• Recycling and Reusing: Implementing practices to recycle and reuse materials can cut down on waste and lower raw material costs.

Improving Production Processes:

• Process Optimization: Regularly analyzing and improving production processes can identify inefficiencies and reduce costs.
• Quality Control: Implementing strict quality control measures can reduce the rate of defective products, thus lowering costs associated with rework and returns.
• Workflow Automation: Using software for production planning, tracking, and reporting can streamline operations and reduce administrative costs.

Energy and Utility Management:

• Energy Efficiency: Investing in energy-efficient machinery and practices can lower utility bills.
• Sustainable Practices: Implementing eco-friendly practices, like using renewable energy or reducing water consumption, can lead to long-term cost savings and potential tax benefits.

Outsourcing and Offshoring:

• Outsourcing: Certain production processes can be outsourced to specialized companies that offer lower costs due to economies of scale.
• Offshoring: Moving production to countries with lower labor costs can reduce overall expenses, though it’s important to balance this with quality and ethical considerations.

Better Production Planning:

• Demand Forecasting: Accurate demand forecasting can help optimize production levels and reduce overproduction.
• Batch Production: Producing in batches rather than continuous production can reduce setup costs and improve efficiency.

Supplier Consolidation:

• Consolidating Suppliers: Working with fewer suppliers can increase buying power and reduce logistics costs.
• Strategic Partnerships: Forming strategic partnerships with key suppliers can lead to long-term cost reductions and reliability.

Digitalization and Technology:

• Digital Design Tools: Using CAD (Computer-Aided Design) software can reduce the time and cost of designing and prototyping.
• Production Management Software: Implementing production management software can help monitor costs, track efficiency, and identify areas for improvement.

Sustainability and Circular Economy Practices:

• Sustainable Materials: While initially more expensive, sustainable materials can reduce waste and appeal to eco-conscious consumers, potentially justifying a higher price point.
• Circular Economy: Developing a circular production model, where products are designed for reuse and recycling, can reduce material costs and create new revenue streams.

By employing these strategies, apparel manufacturers can effectively control and reduce production costs, improving profitability while maintaining quality standards.