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How to Decrease your cost of Production in Apparel Business

How to Decrease your cost of Production in Apparel Business

Zega apparel Manufacturing faced a lot of criticism and negative reviews because they were charging more to customers than any other overseas manufacturer would do, but these days not many people know the difference of Ethical Manufacturing and made in Pakistan or India. Ordering from an overseas manufacturer can be difficult task if you are looking for justifying your Morals, but if you don’t pay heed to all this than you can do a lot of cost cutting using manufacturers which cost of production is less because of child labor and other factors.

Some companies face intense pressure to drive down costs so that they can be more profitable and competitive. Perhaps nowhere is this pressure more intense than in apparel business. Like most effective business cost-cutting measures in the apparel business, reducing the cost of goods starts with a thorough analysis of the various direct and secondary ways in which the base materials consume cash flow. Of course, there are some ways to reduce production costs.

The first tactic is to decrease the material costs.  The cost of the raw material is probably one of the largest expenses, directly affecting profitability of the apparel brand. Substitute an equally good but less expensive material is also an option. If so, this could be one way to decrease part costs. But, apparel companies should make sure that their customers are getting the best possible price with satisfaction. Often companies get satisfied and continue to rely on the same materials suppliers without checking competitive prices. It can also be done by ordering greater quantities of raw materials. Obviously apparel companies do not want extra inventory on hand, but if they can use the extra material in a reasonable period of time, they may get a good price break by increasing their order size.

Apparel products can be manufactured utilizing a variety of different materials depending on marketplace and consumer requirements and the practices of the manufacturers. In addition, different clothing materials require changing the method of manufacture by increasing cycle times, as well as labor costs.

The second tactic is design considerations. Apparel companies have the opportunity to influence the product design process so they have a number of possibilities to reduce production costs. First, make sure the designers and production team work together to design an item that can be produced as cost-effectively as possible without compromising the quality of the clothes.

Specialized apparel manufacturing companies can design products without considering the production consequences, particularly non-standard purchase units of size, weight or volume can be modified to create the final product. Production methods are usually established to minimize the costs of the highest component of production; either labor or material of cloth, at the time the method is established.

If, for example, the cost of the raw material of the cloth is low, the volume of excess material or may not be considered to be important relative to the labor cost. Over time, however, prices for raw materials and labor may shift. This alters the ratio between the two elements and their related expense, so that the cost of scrap material becomes excessive. Modifying product designs and altering production methods in order to utilize standard raw material units may reduce excessive scrap and its associated costs.

Companies can also adopt Lean manufacturing as a company standard operating procedure which means that everyone from the top management down should be constantly looking for ways to make the production operation more efficient.

Companies can also upgrade their machine technologies. The greatest production cost savings typically involve reducing the amount of labor necessary to machine a part. Fact is, every time a labor handles a work piece it adds cost. Using a CNC machining center that performs multiple functions instead of three or more dedicated machine tools saves setup time, reduces featuring costs and allows your machine operator to manage multiple machines. Or a more convenient option to reduce the production cost is to hire an apparel manufacturing company for the manufacturing and production of the clothes.

Apparel brands and small designing companies can also hire a foreign manufacturing company. The reason why an apparel company should outsource its production process is low labor costs in developing countries, flexibility, and focus. Lower labor and operational costs are among the most common reasons why apparel companies choose to outsource their production. If outsourcing is executed properly then it has a major impact on the revenue of the company and can provide substantial savings. One of the reasons why apparel companies should choose to outsource is that they can continue focusing on their basic business processes like designing and developing new concepts while assigning the production processes to external specialized factories like Stylus apparel, Factory45 and Zega Apparel

With latest communication application, like Viber, Whatsapp, and live broadcast of the production process offshore manufacturing apparel companies like Zega Apparel and Vapor Apparel communicate effectively with the apparel brands and designer companies in the foreign countries.

The level of the profit depends upon the ability to receive the highest possible price for the products and pay the lowest possible price to the suppliers and vendors. Every participant in the supply chain is looking for business and will take extraordinary steps to make or save a sale.

Asking for a discount every time when requesting an estimate or while placing an order, and keep negotiating until actually placing the order. If reduction in price is not an option the apparel brand or company can also ask for favorable financing terms, prepaid freight, or other freebies. By negotiating, apparel brands can maximize their position as a buyer from the manufacturing company.

Custom products cost more to manufacture than mass-produced products, because feature they requires an additional step in the production process, increasing the expense. Through examining the customers’ motives for purchasing the apparel products from the same brand or company, considering the reasons why people buy the same apparel brand because of their high quality, low cost,  unique look, or some other reasons. By determining what is important to the customers, apparel brands and companies can selectively identify elements which are not as important to reduce cost.




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