How Is Costing Done In The Garment Industry

Costing is done to establish the financial feasibility of creating a given design within a defined price range, which is acceptable to the target customer. Costing allows the producer to identify the profit potential of the design, aiding in the decision of whether or not a design should be taken into production.

Managing cost contributes to the profit-making aspect of any business. It is also important to realize whether a business can earn more than the total cost incurred. This benefit can also be passed on to the customers in the form of competitive pricing. This can keep you ahead of the competition in the global market.

How Bluekaktus Costing Module Helps Reduce Costs?

Various global researches are indicating that consumers will be more price-conscious, and thus, buyers will offer sharper prices.

There is no option but to rationalise costs in the post-COVID-19 world. There are mainly 2 activities involved in garment manufacturing VA (Value added) and NVA (Non-Value added). VA activities focus on any activity that a customer is willing to pay for. NVA activities describe that the customer does not consider as adding value to his product (E.g. waiting, inspection etc.). Cost related to quality or wastage reductions has a significant effect on overall profit for any industry. The internal cost spent by a company and savings made by reducing internal throughput time or rework or any type of wastages are important for management to keep the industry economically in good health. As it is known that time is money, if more time is required in a product or service more money is involved. By reacting quicker to make a product as per customer demand the company can invest less money and more savings.

This is where BlueKaktus Costing module comes into play. BlueKaktus Costing module performs in-depth cost analysis based on past and current data, provides intuitive suggestions and significantly automates the process of cost management. It holds the experience of various stakeholders in the organisation. By incorporating standard formats and applying reverse costing, companies can automate the process of cost management based on the data captured in the system. It provides easy decision making and builds cost-efficiency in the system.

Success in apparel manufacturing greatly depends upon the ability to produce quality garments at competitive prices. Meeting this goal requires special attention paid to cost and efficiency by garment companies. This can get difficult if the firm does not possess the technological expertise to tie together various systems.

BlueKaktus is a highly flexible and advanced cloud-based solution that saves annual cost significantly. It allows control and visibility into all crucial manufacturing processes within any company. It's AI/ ML-based analytics results in intuitive solutions for the garment industry.

Benefits of Implementing Bluekaktus Costing Module

Here's a quick glimpse of the benefits incurred by our existing customers:

·5% to 7% savings due to real-time tracking and proactive alerts
·Over 10% to 15% reduction in Inventory holding by Supply Chain Optimization
·Lowers down the planning time by 60% to 70%
·Reduces Production Cost by 5-15% by Production Efficiency Enhancer
·The central database brings down the cost associated with setting up & maintaining multiple data centres
·Brings transparency in cost negotiation with 2-3% savings on COGS
·Standardized Documentation & Reports
·Consistent Application of Costing Policies
·Provides archive for all the documents for easy reference
·Enables real-time collaboration of multiple stakeholders
·Allows easy-to-use interface with direct data entry or excel upload