The importance of proper fabric allocation and utilization is often neglected at apparel manufacturing facilities. The main reason being the rush faced by these facilities to meet the deadlines.
This article attempts to highlight the reasons for poor fabric allocation in the apparel facilities which are eating out huge profits for these manufacturers.
Post that we will discuss the tech that our industry needs, to cater these problems without even putting too much effort and time.
Let’s start with the problems which occur due to poor visibility and indeterminate quantity of fabric received at the factory:
1. Inventory write-off of excessive fabric
“An inventory write-off is an accounting term for the formal recognition of a portion of a company’s inventory that no longer has value” (Investopedia)
Fabric write-off often occurs when while closing an account, fabric for a closed order is still left. This can happen due to certain reasons:
The above-mentioned reasons can lead to excessive fabric. However, this fabric is not necessarily write-off goods. In most cases, the fabric is either fully utilized as per plan or extra pieces can be sent to the buyer or sold at cost price, thus incurring any possible losses out of the way.
As already mentioned, it is very difficult to keep the exact track of fabric ordered and allocated. Hence, in most cases, the excessive fabric is not taken into consideration while production and is only paid heed to in the aftermath of financial closing which can be as late as after 6 months. At that time, there is no other way other than to write-off the fabric to cover the bare minimum of losses.
2. Mixing up of different orders
Often a fabric can be used for more than one order/style in the same factory. In such cases, different problems arise if the orders are planned at the very close timing:
The fabric may be allotted on the maximum allowance to the first order after which the following order might receive shortage of fabric. Even though the total quantity may be within tolerance of orders, but the uneven distribution of fabric can lead to a severe shortage for the following order.
For reference, please see the below table:
Here, we can see that even a small fabric shortage led to 25% shortage in the overall order quantity.
3. Trim fabric and bulk fabric wrong allocation
This case is similar to the above problem. Many of the buyers tend to mix-up and use trim fabric and shell fabric.
For example, a buyer A places order for two styles: p and q.
In such orders, the entire fabric is ordered together across all the styles to save money even if style q goes into production after style p.
The problem arises when the trim fabric for style q is allocated for the shell fabric of style p. Although the overall quantity of the shell fabric remains within a feasible allowance, a shortage of a mere 50 meters can cause the quantity for the other style to fall beyond 40% tolerance.
This problem is one of the most common problems faced in a factory and requires a lot of attention at each step of production. However, if a system is established which can systematically allocate the fabric, a lot of time and manpower can be saved.
4. Wrong shade allocation
Different buyers have different shade requirements for the same quality of the fabric. It is very difficult to identify such variations if an approved standard doesn’t exist by the respective buyer.
For example, Buyer A & Buyer B have both placed orders in same white poplin fabric with the same quality. One has requested for optically brightness enhanced while the other has requirement of a comparatively off-white color. In this case what if fabric for Buyer B comes first but production for A is scheduled earlier than B?
This can be a big concern for the buyer as well as the manufacturer as the buyers now are very particular with respect to the precision of colors.
Generally, factories don’t have any system which restricts them from using wrong rolls for an order and hence due to the production pressure they unintentionally go on cutting the wrong rolls.
5. Accountability of rejected fabric
Many times, even after GRN (Goods receipt note) is done, many critical defects may be identified in the fabric. Even if a completely approved fabric has been accounted for, it is the unaccounted rejected fabric which causes problems for the manufacturers. There is no such functionalized way in which the rejected fabric is also visible as the utilized fabric. Therefore, it comes up at the time of account closing. There are various scenarios such as
However, many times the manufacturers fail to notice that the rejected fabric is also paid for. So, not only is it written-off with a lower value, but they also bear losses in short pieces sent to the buyer and not receiving due compensations from the mill. By the time, it is revealed that the fabric is of sub-par quality and any actions should be taken towards the mill, the data is buried deep down. In any case, to receive compensation from the mill, roll-wise details for rejection must be given to the mill which is difficult to find after a certain time and requires a lot of rework.
All the problems here are commonly occurring events from a long time in the garment factory and needs an intelligent material management software to cater them.
meets the need of factory here where it can not only save the fabric roll details (quantity/quality) but also help in intelloCutreserving the fabric at initial stages so that merchandisers don’t need to put effort and time analyzing fabric allocation before commencing of each PO.
This will not only save time and effort for manufacturers but will also save them from a situation of short shipping of POs which are planned in later stages.
Supplier performance report along with fabric usage detail feature of intelloCut backs up conversations with fabric mills regarding the manufacturers’ compensation issues for rejects/shortages encountered in production.
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