Thursday, January 15, 2009

How much should your undies cost?

The cost of your underwear comes down to three main items. How much for the raw materials, how much material do you use and how much labor is used to transform the raw materials to garments.
1. For this example, let's stick to cotton underwear. (If you're into fossil fuels like polyester or regenerated wood pulp... hello it's modal, bamboo, and good old fashion rayon- it's the same principal only different starting numbers.) Cotton's a commodity and prices all over the world are easily found. Of course the USA has a HUGE subsidy which is usually a HUGE issue in World Trade Organization talks but I'll save that for a later post. I like Textile World on line magazine for a quick snap shot of cotton and yarn prices in the US.
2. How much fabric is used to make the garment. For knits this is called the Block Weight.
3. How much time does it take to sew the garment. Big companies have engineers that determine the best way to put the garment together or the Sew Method and then time each operator and operations for the Standard Allowed Minutes or SAMs.
4. Email me if you'd like a copy of my Excel Spreadsheet so you can play around with the Google document below. The current labor and overhead costs in blue are for USA. Labor can be cut significantly for lower wage countries and there's room for fixed overhead costs to come down - especially when it's related to buildings and supervisory costs - not machine repair parts.

Lea’s Knit Tee Shirt Cost Estimator - Used a cotton tee shirt so there's no need to account for elastic and or strip rubber or spandex in the legs. Also used a body sized tee so the number of sewing minutes is low since there's no side seam.

Red = Major cost trigger: Cotton per lb, dye or bleach stuff, block weights
Blue = Direct Labor Triggers Current blue are for USA direct labor cost. (Can also cut some overhead cost- especially in cut and sew operations.)
Black = process loss or waste and Fixed and Variable overhead (utilities, parts, etc.)
Green=Locked cells as these are calculated for above row


The Underwear Maven

1 comment:

B said...

Hi, Lea,
Love your Blogspot....more than the women's underwear! So glad you left corporate america to do this. All the women out there......get your Key Largo Underwear. You will not wear anything else. Made me a believer. Thanks, Lea