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Logistic & Shipment

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Logistic & Shipment

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How Industrial Engineers Do Costing of Garments using Line Efficiency?

How Industrial Engineers Do Costing of Garments using Line Efficiency?


Question: I want to know how Industrial Engineer does costing with efficiency level. Please let me know in brief how it has done. ...asked by Sharif.

Industrial Engineers normally calculate direct labor cost (sewing) of the product. Labor cost per unit directly related on the line efficiency (performance). When line efficiency increases, production of the line increases. See the graph on bottom right. So, the cost per garment goes down when line efficiency increases.

Normally engineers calculate per minute labor cost at 100% line efficiency based on operators’ monthly salary. Labor cost per minute increased as line efficiency goes down. Many engineers make a matrix of line efficiency Vs. labor cost per minute ( See the following table for an example of such matrix).