Professional Documents
Culture Documents
Industry Mentor: Mr. Sanjay Achrekar (General Manager, Katmandu Apparel Pvt. Ltd., Mumbai)
College Mentor: Mr. Ranjan K. Saha (Course Co-ordinator, Department of Fashion Technology, NIFT)
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Manish Singh Dhakad
M/BFT/10/11
Semester: VIII
Katmandu Apparel Pvt. Ltd. | Manish Singh Dhakad, BFT, NIFT
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During this whole training I got a lot of experience and came to know about the
practices in real that how it differs from those of theoretical knowledge and the
practically in the real life.
With immense pleasure, I would like to present this report as a part of my Graduation
Project on "Development of company specific costing model for buying house
merchandising". It has been an enriching experience for me to undergo this project,
which would not have possible without the goodwill and support of the people
around. As a student of National Institute of Fashion Technology, Mumbai I would
like to express my sincere thanks to all those who helped me during this period.
I feel my pleasure to extend my sincere thanks and gratitude to my college mentor
Mr. Ranjan k. Saha, (Course-Co-ordinator, DFT, NIFT) & industry mentor Mr. Sanjay
Achrekar, General Manager (KAPL-Mumbai) who genuinely played his role in right
from planning, project framework to guiding me through this project.
I would also like to thank Mr. Lokesh Gutta, Manager (Production & operation) of
Katmandu Apparel Private Limited who gave me all the required information
related to apparel production.
Not to forget, I am also thankful to Mr. Kiran Ramakant Temkar (Director) & Mrs.
Manisha kiran Temkar (CEO) who was quite helpful in providing different facilities
during the project period.
Mr. Mahesh Khopkar, Mr. Jude James, Mr. Sameer Gandhi, Mr. Gautam Kamble,
Mr. Dharmesh Jain, Mrs. Tejal Pallan & Carmen Katke of KAPL also lend their
helping hands in making me understand merchandising concepts & Costing
parameters involved in the process.
I am also grateful to all the HODs and Miss. Vijeshri Kolbekar who led my way and I
am extremely thankful for the help and support of the staff and employees of
Katmandu Apparel Private Limited without which I could not make my project this
much successful.
Here comes the time to say my thanks to my institute NIFT which provided me
this golden opportunity. At last but not the least I‟d like to thank my seniors and
classmates who helped me directly or indirectly through their valuable suggestion.
However, I accept the sole responsibility for any possible error of omission
and would be extremely grateful to the readers of this project report if they bring such
mistakes to my notice.
NIFT, MUMBAI
To do perfect garment costing, one must know about all these activities
thoroughly about their costs, procedures, advantages and risk factors. Also he must
know how to solve the problems when occurred and to take suitable alternate
decision immediately in time. We must be aware that there are always fluctuations in
the costs of raw materials and accessories, charges of knitting, processing, finishing,
sewing and packing, charges of transport and conveyance. Hence we must have
update knowledge about the latest prices and charges, latest procedures, methods
and quality systems, market prices and availability, transportation (road, sea, air) and
freight charges, etc.
The study examines the supply chain processes and costs for producing
denim jeans in Asian region of the world. Trade agreement duty provisions, world
cotton market price competitiveness, export tax rebates, and labour rates
significantly affect a countries‟ competitiveness in the textile and apparel industry.
The study helps identify the cost makeup of each process and the resources
consumed.
This model can assist companies to look outside their area of operation and
have an appreciation of costs related to upstream and/or downstream processes
within their supply chain. They can identify broad issues related to their strategic
partnerships with suppliers and customers and investigate these in more detail. By
combining supply chain costs, transportation time, and manufacturing
responsiveness, analyses can be performed to identify scenarios where 5
responsiveness is more critical than cost effectiveness. This study has found that a
responsive supply chain can outweigh a lower cost but less responsive supply chain
in certain sourcing environments.
1. INTRODUCTION ......................................................................................................................... 7
1.1. NEED OF THE PROJECT .............................................................................................................. 8
1.2. PROBLEM FORMULATION ........................................................................................................ 9
1.3. IDENTIFICATION OF TOPIC/DEVELOPMENT OF RESEARCH PROPOSAL ................................. 11
1.4. OBJECTIVE & SUB-OBJECTIVE OF THE PROJECT ..................................................................... 13
3. METHODOLOGY....................................................................................................................... 25
3.1. QUANTITATIVE RESEARCH ...................................................................................................... 26
3.2. QUALITATIVE RESEARCH ......................................................................................................... 27
3.3. DATA COLLECTION METHOD .................................................................................................. 27
3.4. REPRESENTATION OF DATA ANALYSIS .................................................................................... 28
3.5. STEPS OF METHODOLOGY ...................................................................................................... 29
3.6. WEEKLY TIME AND ACTION CALENDER .................................................................................. 31
8. BIBLIOGRAPHY....................................................................................................................... 104
INTRODUCTION
The Indian textile and apparel industry is very large and diverse,
employing 35 million people and accounting for 27 per cent of the country's
exports. The apparel industry plays a pivotal role as a key driver of the
national economy and has grown to be the most significant contributor to the
country's economy over nearly three decades of its existence.
In order to achieve perfect garment costing, one must know about all
the activities including purchase of fabrics, sewing, packing, transport,
overheads, etc. & one must know about all these activities thoroughly about
their costs, procedures, advantages and risk factors. Also he must know how
to solve the problems when occurred and to take suitable alternate decision
immediately in time.
We must be aware that there are always fluctuations in the costs of raw
materials and accessories, charges of knitting, processing, finishing, sewing
and packing, charges of transport and conveyance. Hence we must have
update knowledge about the latest prices and charges, latest procedures,
methods and quality systems, market prices and availability, transportation 8
(road, sea, air) and freight charges, etc.
INITIAL IDEA
BACKGROUND
STUDY
REFINEMENT OF
IDEA & PROBLEM
FORMULATION
REVIEW OF
LITERATURE
DESIGN &
DEVELOPMENT
OF
METHODOLOGY
DATA
COLLECTION &
ANALYSIS
EXPECTED
OUTCOME
10
This graduation project is aimed towards blending the class room principles
with industry application. This project also helps students to learn and improve
their interpersonal communication skills with colleagues, peer group and workers.
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REVIEW OF LITERATURE
14
a. Fixed Costs
b. Variable Costs
c. Semi-variable Costs
i) Direct cost: Cost of raw material -- 66%. Cost of size and chemicals -
4%. Production cost comprising of running the machine, maintenance, power 18
fuel, humidification and other utilities -- 8 % and worker wages and salaries --
8% losses incurred due to shrinkage, wastage, grading, and also selling
commissions.
(Source: Ms Saroj Bala, Associate Professor & Mrs Tripti Gupta, Assistant Professor 19
Pearl Academy of Fashion, New Delhi
(Source: www.softmenu.org 20
www.ibuyer.hk)
Direct Material:
[{ } ]
Warp Cost (cost per yard) =
[{ } ]
Weft Cost (cost per yard) =
Warp weight =
Weft weight =
Fabric cost = [warp weight × warp yarn cost × weft weight × weft
yarn cost]
Cotton Price:
Asian competitors:
S.No. Country USD per hour
1. Bangladesh 0.22
2. Cambodia 0.33
3. Pakistan 0.37
4. Vietnam 0.38
5. Srilanka 0.43
6. Indonesia 0.44
7. India 0.51
8. Remote inland area 0.55 - 0.80
China
9. Other costal & core area 0.86 - 0.94
China
10. Prime costal area China 1.08
11. Malaysia 1.18
12. Thailand 1.29-1.36
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Energy rates:
S.No. Country USD per kilo watt hour
1. China 0.1000
2. Colombia 0.1070
3. Guatemala 0.1600
4. India 0.1120
5. US 0.0630
6. Vietnam 0.0550
*Water rates, steam, other cost can also be added.
Duty Rates:
S.No. Country Duty % Rebate %
1. China 16.5 15
2. Colombia 16.5 0
3. Guatemala 0 0
4. India 16.5 0
5. US 0 0
6. Vietnam 16.5 0
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METHODOLOGY
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3.1.3Causal-Comparative/Quasi-Experimental
(What
was
the
cause?)
Description of past events, problems, issues, facts
Describes
what
was
in
an
attempt
to
reconstruct
the
past involves
much interpretation
of
events
and
its
influence
on
the
present
3.4.1 Brainstorming:
No criticism
Welcome unusual ideas
Quantity Wanted
Combine and improve ideas
3.4.3 Histogram:
30
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4.1.1 Study the Company flow process & Job of Costing merchant.
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Develop standard costs.
Determine the cost of purchased or manufactured products/services.
Analyze the variance between costs and standard costs.
Interact with Production Control to ensure Bills of Materials (BOM) are
accurate and up to date. Review and audit BOM‟s to ensure they
reflect the latest manufacturing practices.
Analyze actual labor, material, and overhead cost against
standard/Budget.
Work with the finance department to implement and apply cost
accounting policies and procedures.
Support Controller‟s efforts for implementing and maintaining internal
controls for operations, sales, engineering, and finance.
Development of new labor and overhead rates, budget, and forecasts.
4.1.2 Study the Cost related Journals and Researches for finding variables.
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(
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Material Wear
Buyer Denim
Factory Jessica Marple
Product Description KAG
Fabric supplier AZG(DCM)-Skinny Jeans
Assigned IBO India
Costing For Supplier
Sizes Regular
Finish Destructive, rinse, Rock
wash Destructive, rinse, Rock
Designer Sgill 19
Style line Bottom Wear
Costing remark Development Stage
Currency for costing USD-INR
Handled by Manish Dhakad
UOM per Garment
Trade term FOB
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MATERIAL COST BREAKDOWN
Cost_id SM_23_01
Fabric For Shell_1 Shell_2 Pocketing
Mill Reference_id KAG-13-391 KAG-13-1091 poly-cotton
Buyer Reference_id
Supplier
Fabric Type Denim Denim Pocketing
Composition Cotton, Ramie, Poly, Spandex Cotton, Ramie, Poly, Spandex Poly, Cotton
Sourcing type Yarn dyed yarn dyed Solid
UOM yds yds yds
Quantity
Quality grade
Weave Twill Twill Twill
Color Blue Blue White
Style
Yarn type Ring-spun Ring-spun Ring-spun
Loom
Country of origin China China China
Count 28x28
GSM 120
Payment terms
Shrinkage 4.5 to 8.5 4.5 to 8.5 4.5 to 8.5
Wastage
Size & chemical
Finishing
Cuttable width 57 55 57
Finished width 58/59 56/57 58/59
Dyeing type Indigo Indigo
Lead time 120 Days 120 Days 120 Days
Extra % 3-5 % 3-5 % 3-5 %
Consumption per marker
Number of garments in marker 18 18
Average consumption
Administrative
Employee welfare
Stationary & printing
Pantry
House keeping
Overtime
Sales & Distribution
Profit %
R& D
Security & helpers
Training & Recruitment
Repair & Replacement
Depreciation
Newspaper & Magazines
After sales expenses
Bank Expenses
Others
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4.1.5 Differentiate dependent & independent factors for each entity.
Advantages Disadvantages
Job Costing
Batch Costing
Process Costing
Operation Costing
Operating Costing
Departmental Costing
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Multiple Costing
[{ } ]
1). Warp Cost (cost per yard) =
(1Maund ≈ 37 Kilograms)
(1 Oz. = 28.350 grams)
(Denim⟶ 7-10 oz. & Non-denim⟶ 4-6 oz.)
[{ } ]
2). Weft Cost (cost per yard) =
3). Wastage = 7 %
45
10). Fabric cost = [warp weight × warp yarn cost × weft
weight × weft yarn cost]
Sizing cost ∝
46
GSM =
(Ounce/Sq. yard) = (GSM/33.91)
GSM = ×[ ]
Dyeing cost:
Vat Dyes > Reactive Dyes
Finishing Cost:
Flame retardency - 15Rs./meter
Anti-static - 5Rs./meter
Anti-satin - 10Rs./meter
Anti-wrinkle - 5Rs./meter
48
If added in jigger (softners) - 10Rs./Kg.
Stentering - 20Rs./Kg.
Weaving costs:
Mill made loom cost ≈ 125 % Power loom cost
Twill weave = 12 paisa / pick / inch / sq. meter
Satin weave = 12 paisa / pick / inch / sq. meter
P.V. Suiting = 14.2 paisa / pick / inch / sq. meter
For 1000 meter dobby = 17 paisa / pick / inch / sq. meter
For 1000 meter Jacquard = 20 paisa / pick / inch / sq. meter
For 2400 hook Jacquard = 17 paisa / pick / inch / sq. meter
Double beam fabric = 40 paisa / pick / inch / sq. meter
RMC (Ring per meter) = RMC OE per meter x [1+Oz. per sq. yard/100]
iNDEX = [ ] x 0.27
UHML=Upper half mean limit
Str.=Strength in grams per tex using HVI mode.
For accuracy:
= (1+E %) x {(A+17B+C) x D} 50
2 Courier charges
3 EGCC Report
5 Freight charges
6 Laboratory charges
7 Sales & Promotion
8 Ware housing charges
10 Sales tax
11 Foreign tours
12 Insurance
13 Catalogues
14 Samples
15 Folders
16 Royalties
17 Market research
18 Demonstration expenses
19 Cost of sales
20 Profit
21
22 ADD: OPENING WIP
TOTAL 54
Direct Labour
Direct Expenses
Prime Cost
Indirect material
Indirect Labour
Indirect Expenses
Manufacturing Cost
Administrative Expenses
Profit Margin
Indirect material
Indirect Labour
Indirect Expenses
Manufacturing Cost
Administrative Expenses
Profit Margin
72
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Developed by: Manish S. Dhakad, KAG, Mumbai
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Developed by: Manish S. Dhakad, KAG, Mumbai
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4.2.6 Compare cost and find variance & total cost savings.
ORDER Fabric Fabric Cost Fabric Fabric Cost Fabric Fabric Cost
PPK # TYPE QUANTITY Shell Shell Saving Lining Lining Saving Pocketing Pocketing Saving
Difference Price Shell Difference Price Shell Difference Price Shell
99678 TGF-14 WOVEN COSTED DENIM SKIRT 12900 0.02 $ 2.13 $ 549.54 0 $ 0.87 $ -
98061 TGF-14 WOVEN DENIM WITH ZIPPER SKIRT 9782 0.05 $ 1.98 $ 968.42 0.01 $ 1.10 $ 107.60
Katmandu Apparel Pvt. Ltd. | Manish Singh Dhakad, BFT, NIFT
99866 TGF-14 WOVEN DENIM WITH ZIPPER SKIRT 23210 0.01 $ 2.53 $ 587.21 0.01 $ 1.20 $ 278.52
99972 AZGFA14BTM- PRINTED ROLL CUFF CROP 26660 0 $ 2.87 $ - -0.01 $ 1.30 $ -346.58
98046 TGF-14 WOVEN PIECED KNEE JEGGING 7555 -0.04 $ 2.38 $ -719.24 -0.01 $ 1.20 $ -90.66
97984 ODITBFA14 PULL ON DENIM SHORT 44241 0.02 $ 2.13 $ 1,884.67 0 $ 0.99 $ -
104937 OD BABY BOY F14 DENIM PANT LEGGING 62226 0.02 $ 2.37 $ 2,949.51
3 99678 TGF-14 WOVEN COSTED DENIM SKIRT 12900 95.12 100 139 39 $ 0.02 $ 290.79
4 98061 TGF-14 WOVEN DENIM WITH ZIPPER SKIRT 9782 77.38 80 180 100 $ 0.06 $ 565.40
5 99866 TGF-14 WOVEN DENIM WITH ZIPPER SKIRT 23210 78.09 80 163 83 $ 0.05 $ 1,113.48
6 99972 AZGFA14BTM- PRINTED ROLL CUFF CROP 26660 183.87 185 227 42 $ 0.02 $ 647.20
7 100010 AZGFA14BTM- FASHION SKINNY JEAN PRINTED PATCHES 37940 214.83 215 236 21 $ 0.01 $ 460.52
8 97430 AZGFA14BTM- DENIM JACKET WITH KNIT SLEEVES ORDER CANCELLED
9 57491 AZGFA14BTM- FASHION SKINNY JEAN PRINTED PATCHES 36916 212.80 215 236 21 $ 0.01 $ 448.09
10 98046 TGF-14 WOVEN PIECED KNEE JEGGING 7555 167.61 170 327 157 $ 0.09 $ 685.59
11 100014 AZGFA14BTM- FASHION BOOT CUT SCATTERED
12 100016 AZGFA14BTM- FASHION BOOT CUT LUREX AND EMBELLISMENT
ORDER CANCELLED
13 100008 AZGFA14BTM-SIDE SEAM EMBELLSHED FASHION SKINNEY JEANS
14 100017 AZGFA14BTM-FASHION BOOTCUT W SIDE SEAM PRINT
15 97984 ODITBFA14 PULL ON DENIM SHORT 44241 68.45 70 140 70 $ 0.04 $ 1,789.99
16 104937 OD BABY BOY F14 DENIM PANT LEGGING 62226 64.29 65 140 75 $ 0.04 $ 2,697.50
TOTAL COST SAVING $ 17,558.08
86
Product Package Number 82644 (Total order quantity = 775000)
(1 Yds = 36 Inches) Before After Before After
Variance
KAG-13-1091 (Shrinkage Variance Variance @57"
Fabric Type KAG-13-391 (Bulk Cuttable 57") @56"
problem)
Cuttable width (Inches) 55" 55" 0 55" 56" 57" 1" 1"
Shrinkage % (weft , warp) 4.5 to 14 4.5 to 12 2% in warp 4.5 to 8.5 4.5 to 8.5 4.5 to 8.5 0 0
Lay length (Yds) 17.25675 16.890722 -0.366028 16.241528 15.956472 15.661556 -0.28506 -0.579972
Katmandu Apparel Pvt. Ltd. | Manish Singh Dhakad, BFT, NIFT
Consumption per garment (Yds.) 0.95871 0.93837 -0.02034 0.90231 0.88647 0.87009 -0.01584 -0.03222
Marker efficiency % 80.966 81.279 0.313 81.895 81.92 82.049 0.025 0.129
Waste percentage % 19.034 18.721 -0.313 18.105 18.08 17.951 -0.025 -0.129
Total fabric required (Yds.) 743000.25 727236.75 -15763.5 699290.25 687014.25 674319.75 -12276 -24970.5
Total fabric including 5% extra 780150.2625 763598.5875 -16551.675 734254.7625 721364.9625 708035.7375 -12889.8 -13329.225
Total cost of fabric @ 1.91 $ per yard $ 14,90,087.00 $ 14,58,473.30 -31613.69925 $ 14,02,426.60 $ 13,77,807.08 $ 13,52,348.26 -24619.5 -50078.33775
Total Cost Savings in USD $ 31,613.70 $ 50,078.34
(-ive sign in variance column shows decrease in the entity & +ive sign shows the increment for a particular entity.)
87
4.2.7 Develop chart for the total trends followed in fabric with prices.
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4.3.1 Study of present system used & write observations based on analysis.
4.3.2 Enquiry, testing and demo of the new software for cost savings in man-
power, time and overheads.
Section a
High Price
Reduces dependence
on people
Failed installation in
other organization
Collaborative working
between various
employees, supplier
and buyer is easier
Ability of supplier to
train the users in our
organization
Saves fabric
Reduces throughput
time for product
assemble
Requirement of
constant training
Ready availability of
literate professionals
Constant up gradation
of system required
CHANCES OF ERROR
MAY INCREASE
Section b
This sheet will help you decide which system is best for your pattern
development department and organization. (Even if you have one)
Manuals 6 7 5 1 3 4 2
MR. PRAMOD
GUPTA
Communications access
with respect internet 3 7 6 2 4 5 1
compatibility
Customizing features 4 5 7 6 3 1 2 93
Cost implications 1 6 7 3 2 5 4
Plotting facility 7 5 4 6 1 2 3
TOTAL 83 122 96 53 77 56 35
Features:
Manually operated heat transfer press
Ideal machine for plastisol fusing. curing and heat transfer printing
Easy operation through clamp system.
Electronic contractor switching for noise free and zero maintenance.
Anti-static Teflon is use on the upper bed to prevent corrosion.
Minimum moving parts result in zero maintenance.
Features:
The standard 1-needle type machine that delivers the basic
functions and performance best suited to the sewing of heavy-
weight materials.
The maximum stitch length is 10mm. The complete rectangular
feed locus enables accurate feed of extra heavy-weight materials
while preventing stitch gathering.
With its sufficient needle bar stroke of 38mm and long 190R needle,
the machine supports the sewing of extra heavy-weight materials
Automatic lubricating mechanism helps improve maintainability
Equipped with a bottom-feed adjusting mechanism that adjusts the
amount of bottom-feed while keeping the needle feed fixed.
Features:
・The machine sews folded pocket cloth on the garment body.
・Maximum stitching range of a pocket that can be sewn is 246mm
(width) × 200mm (length)
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Application Heavy-weight
Max. sewing
2,000 sti/min
speed
Storage of Main-body memory: Max. 500,000 stitches, 999 patterns (max. 50,000
pattern stitches / pattern)
data in the External media: Max. 49,950,000 stitches, 999 patterns (max. 50,000
memory stitches / pattern)
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RESULT/EXPECTED OUTCOME
98
b.) Technical enhancement in R&D from total cost savings & profit margins of
company.
99
100
Limitation of project:
1. Only few styles (Fall 2014 season) are analysed for costing due to time
limitations.
2. Exact cost cannot be mentioned or shared due to sensitive nature & also for
the reason of maintaining security.
4. Proper training & motivation is required for employees to calculate proper cost
according to actual consumption including wastages & profit.
1. Cost absorption formats are developed in this project which can help in
calculating pre-production & post-production cost in manufacturing unit.
2. This project can be used for the reference purpose to understand the costing
procedure in detail.
CONCLUSION
102
But due to a significant variation in cost like fabric, trims & CM cost which fluctuates
during the production stage , the proposed/planned cost differ from the actual.
Since there is no pre-defined set of formulas & method to predict fluctuation in cost
parameters, the profit margin varies from what is planned earlier for any specific
product. Cost quoted to buyers may also vary from buyer to buyer & it also depends
upon quality, quantity, lead time & margins.
For example- Due to changing economic conditions the prices of raw material in the
market keeps on fluctuating and same is the case of labor cost in different
geographical location.
Conclusively, Costing is a very critical process which has to handled & controlled as
the order proceeds.
103
BIBLIOGRAPHY
104
Factors influencing costing of Woven Fabric, Indian Textile Journal, January, 2009
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