The Apparel Industry’s
18 Most Critical Metrics

down-arw-green

Share this Post

In this article you’ll learn the most critical metrics that companies in the Apparel Industry should track.

The article does not include metrics such as Profits and Sales that are critical to companies in all industries; rather the focus is on metrics more specific to the Apparel Industry.

By tracking your metrics, you will dramatically improve your business results.

Why? Because not only is the old saying “If you can’t measure it, you can’t improve it” true, but visibility into your metrics allows you to identify WHERE you can make the easiest and most impactful improvements.

For each metric, we will answer the following questions:

– What is the metric?

– How do you calculate this metric?

– Why is this metric important?

Let’s get started…

1. Standard Allowed Minute (SAM)

What is this metric?
The SAM is used to measure how long it takes to make a garment.

According to website Online Clothing Study, SAM of a product varies according to the work content or simply according to number of operations, length of seams, fabric types, stitching accuracy needed, sewing technology to be used etc.

Why is this metric important?
An estimated SAM helps in capacity planning of the factory, calculating requirement of machineries and even helps to estimate CM (cut and make) costing of a garment.

standard_allowed_minutes-20151112

2. Operator Efficiency

What is this metric?
This measures the skill and expertise of a particular employee.

To calculate operator efficiency, the standard minutes (SAM) of the garment will be needed. According to Online Clothing Study, the following formula is used to calculate operator efficiency.

Efficiency Calculation formula:

Efficiency (%) = [Total minute produced by an operator/Total minute attended by him *100]

Example: An operator was doing an operation of SAM 0.50 minutes. In an 8 hours shift day he produces 400 pieces. So according to the efficiency calculating formula, that operator’s overall efficiency is as follows:
= (400 x 0.50) / (8 X 60)*100%
= 200/480*100%
= 41.67%

Why is this metric important?
An operator with higher efficiency produces more garments, which lowers manufacturing cost. In addition, factory capacity is estimated according to the operator efficiency or line efficiency. Hence, efficiency is one of the most commonly used performance measuring tools.

operator_efficiency-20151112

3. Production Batch/Line Efficiency

What is this metric?
This measures how efficient the production line is on a daily basis. Daily line efficiency shows the line performance.

To calculate efficiency of a line for a day, Online Clothing Study lists the following data needed from the line supervisor or line recorder:

  • Number of operators – how many operators worked in the line in a day
  • Working hours (Regular and overtime hours) – how many hours each of the operators worked or how many hours the line run in a day
  • Production in pieces – How many pieces are produced or total line output at the end of the day
  • Garment SAM – What is exact standard minute of the style (garment)

After this data is gathered, calculate:

  • Total minutes produced by the line: To get total produced minutes multiply production pieces by SAM
  • Total minutes attended by the all operators in the line: Multiply number of operators by daily working hours and convert total hours into total minutes (multiplying by 60).

Then, calculate line efficiency using following formula:

  • Line efficiency (in percentage) = Total minutes produced by the line *100 /total minutes attended by all operators

Why is this metric important?
This metric is important in calculating the cost of producing a particular run of garment(s).

production_batch_line_efficiency-20151112

Do you currently know how you’re performing on each of these key metrics?
Click here to schedule a free demo with one of our dashboard builders. They’ll show you how we can build a dashboard that automatically calculates all your key metrics in real-time.

4. Labor Productivity

What is this metric?
This measures the number of garments produced by a line of sewing machine operators in a specific time frame. It is the ratio between output and inputs.

An example given by Online Clothing Study:

Assume that
– Total production in day =1200 pieces
– Total labor (operator + helpers) = 37
– Working time = 600 minutes (10 hours)

So, Labor productivity per 10 hours is =Total pieces produced/ total labor input = (1200/37) Pieces =32.4 pieces.

Why is this metric important?
This can be used to compare productivity across products, factories, or even industries.
labor_productivity-20151112

5. Perfect Order Fulfillment

What is this metric?
The percentage of products delivered on-time to customers with complete documentation and no defects. In its simplest (and most traditional) incarnation, a perfect order meets the elements of a product shipped in full, on time, undamaged and with the right documentation (including invoice).

According to Cognizant, definitive statistics are hard to come by, but their conversations with inventory managers reveal that for most companies, not even 50% of orders approach perfection via the traditional definition.

Why is this metric important?
This metric measures how precisely a company fulfills a customer’s order. Higher accuracy can result in lower production costs and more repeat orders.
perfect_order_fulfillment-20151112

6. Repeated Order

What is this metric?
The percentage of the orders from old customers compared to all orders received.

Why is this metric important?
Knowing the percentage of repeated orders is important in forecasting the production schedule.
repeat_order-20151112

7. Order Fulfillment Cycle Time

What is this metric?
The relative amount of time required to design, develop, produce, and transport a garment.

Why is this metric important?
Cycle time is the key to competitiveness of a firm as it affects both price and delivery schedule. It is important to reduce cycle time in order to reduce costs and improve customer satisfaction.
order_fulfillment_cycle_time-20151112

Want to discuss the specific metrics you’re tracking (or want to track) for your company?
Click here to schedule a free consultation and demo with one of our dashboard consultants.

8. Upside Supply Chain Flexibility

What is this metric?
The amount of time that a supply chain takes to respond to an unplanned 20% increase in demand without service or cost penalty.

Why is this metric important?
The agility of a supply chain in responding to marketplace changes is important for gaining or maintaining competitive advantage.

upside_supply_chain_flexibility-20151112

9. Accuracy of Production Queuing

What is this metric?
Production queuing is a subset of cycle time. It is the amount of time elapsed before work is performed on a particular order or garment. Accuracy of production queuing refers to optimal distribution of pieces per machine.

Why is this metric important?
Accuracy in production queuing reduces cycle time, which leads to higher revenue. This helps identify bottlenecks in the production process.

[See chart in #11 below]

10. Accuracy of Production Planning

What is this metric?
The average total time spent on actual production process compared with total time forecast in planning.

Why is this metric important?
Precision in planning equates to on-time shipments, the best use of labor and assurances that appropriate supplies and equipment are available for each order.

[See chart in #11 below]

11. Accuracy of Material Planning

What is this metric?
This refers to how accurately the materials were selected, and how closely the amounts needed were purchased.

About 60 to 70 percent of the cost of a garment is in the fabric, according to StitchWorld. As such, it’s vital that you order appropriately and track your cutting room processes to keep mistakes to a minimum.

Effective production planning relies on your ability to order the appropriate amount of fabric for a run and realize no more than a 2 to 3 percent rate of error in cutting. That means that the number of garments produced should equal 97 to 98 percent of the garments cut.

Why is this metric important?
A surplus of materials equals money wasted, and waiting for more materials to arrive after production has commenced equals money and reputation lost.

klip-20151112

12. Sourcing Time

What is this metric?
This is the average time spent for sourcing raw material (fabric, trim, accessories, and packing materials).

Why is this metric important?
Knowing the sourcing time is vital for production planning, and providing cycle time estimates to potential buyers.

sourcing_time-20151112

13. Inventory Turnover

What is this metric?
Inventory turnover is defined as how many times the entire inventory of a company has been sold during an accounting period.

Why is this metric important?
In the garment manufacturing industry, inventory generally refers to raw materials. Since inventories represent a sizeable investment of company funds, larger inventories mean higher costs (space, insurance, taxes, capital costs, etc.). Low inventory turnover means the company is carrying too much inventory, which unnecessarily restricts access to cash.

inventory_turnover_-20151112

14. Approved Sample Product

What is this metric?
The percentage of product samples that meet with customer approval.

Why is this metric important?
Sampling is one of the main processes in garment manufacturing and it plays a vital role in attracting buyers and confirming the order, as the buyer generally places the order once satisfied with the quality and responsiveness of the sampling. A higher rate of sample approval directly corresponds with the number of orders a factory may receive.

approved_sample_product-20151112

15. Rework Production Ratio

What is this metric?
The percentage of product rework required to deliver an accurate order.

According to a study published in the International Journal of Engineering and Applied Sciences, 21% of quality inspections for Cutting Departments result in Failure, and 39% of quality inspections for Sewing Departments result in Failure.

Why is this metric important?
Measuring the ratio of rework to correct products is vital to tracking internal failure costs or operational wastages associated with discovering poor product quality before the product reaches the customer site. Minimization of reworks is a must in quality and productivity improvement.

rework_production_ratio-20151112

16. Amount of Dead Stock

What is this metric?
This is the measure of how much fabric is left over after the order has been shipped.

According to Methods Apparel Consultancy, typical fabric wastage amounts to about 18% of a total order. Of that, 41% is attributable to Dead Stock.

Why is this metric important?
Knowing the average Dead Stock for each order will help improve production planning, which in turn lowers costs.

amount_of_dead_stock-20151112

17. Cut to Ship Ratio

What is this metric?
This ratio represents the number of garments shipped compared to the number of garments cut.

According to Methods Apparel Consultancy, the Cut to Ship Ratio varies between 95% and 99%.

Why is this metric important?
This indicator is measured to control surplus quantity after shipment, reduction in extra cutting and damaged garments.

cut_to_ship_ratio-20151112

18. Return of Defective Product

What is this metric?
The percentage of defective products returned by customers.

According to a garment industry textbook published by Pearson, consumers return only about 10% of defective garments to the retailer, even though they report dissatisfaction with over 20% of their clothing purchases. The number of defective garments returned to manufacturers is even smaller. Because most people do not return garments with which they are dissatisfied, a return by a single customer may represent the dissatisfaction of many others. Some manufacturers consider each return representative of eight nonreturned defective garments.

Why is this metric important?
This can be an indicator of the attentiveness of the Quality Assurance department, and at the very least represents lost revenue and a degraded reputation.

return_of_defective_product_-20151112

Share this Post