Packing in Garment Industry:
Once the garments are pressed and folded, the hang tags and other accessories like clips and pins were added to the garment. Once accessories are added, the garment is then placed inside the poly bag based on the customer’s requirements. If it is necessary, tags or size stickers or barcode stickers are affixed on the polyethylene bag. After that process, the garments are placed into the inner carton boxes. Based on assortment needs, the inner carton boxes were arranged inside the larger shipment carton box. Further, the descriptions, destination details are pasted on the box to help the shipment process. In this article, I will discuss packing cost calculation process which is used in garments industry.
The process flow chart of the packing department is given below:
Receipt of garments from checking department
↓
Pressing and ironing
↓
Attaching tags and other accessories
↓
Retail packing as per buyer instruction
↓
Assortment / Shipment packing as per instruction
↓
Cartons ready for dispatch
Factors Influence in Garment Packing Cost Calculation:
Following are the important factors that have a direct influence on the packing cost calculation of the garment.
a) Style feature of the garment: Based on the style of the garment, the pressing process and fold time will increase and so the cost of the product also will increase.
b) Type of packing methods (Primary) used: The method of folding and packing also causes a huge delay in some cases due to its placement and laborious method.
c) Number of packing materials: When the number of packing materials increases, the complexity in the placement of the packing also increases. Hence, the packing process time gets delayed for each material.
d) Type of assortment and outer packing: Assortment is the process of arranging the primary packed material into the carton boxes. This is one of the requirements of the customer. Hence, the criteria should be strictly followed.
The different types of assortments are:
- Solid size and solid color: Each box contains one size in one color
- Solid size and assorted color: Each box contains one size in different colors
- Assorted size and solid color: Each box contains different size as per the requirement of the customer and all those in one color. The ratios of size will be based on customer requirements.
- Assorted size and assorted color: Each box contains different sizes and different colors as per the requirement of the customer. The ratios of color will be based on customer requirements.
Functions of Garment Packing Materials:
Basically functions of garment packing materials are two types.
- Primary functions of packing
- Secondary functions of packing
1. Primary functions of packing
- Protective function – protect the goods from environment, physical and environmental effect.
- Storage function – Package must fulfill the needs of storage
- Loading and transport function – Should be favorable for lifting, loading, and transportation
2. Secondary functions of packing
- Sales function – should promote sales
- Promotional function – package should promote purchase decision
- Service function – package should provide clear information about product
- Guarantee function – should aid customer about the details of replacement
Packing Cost Calculation in Garment Industry:
For calculating, packing cost of garments following information are taken from Tech Pack and Manufacturer.
A. Information from the tech pack:
The tech pack has the detailed packing instruction for a garment in two different ways as reported below,
- Retail packing / merchandise packing: It is the pack, in which the customer receives the garment. The tech pack also details different types of tags, story tag, price tag, and brand tag that need to be attached with the garment with detailed sketch. This will help the manufacture to prepare the tag.
- Shipment packing: The tech pack further explains the different types of packing methods (as mentioned above) in a single shipment or wholesale pack, which is the one, the shops use to receive from the brands.
B. Information from the manufacturer:
The tech pack provides the details regarding the different accessories to be attached in the finished garment and the way that has to be packed. Hence, the manufacturer must consider the following cost:
- Labor cost related to the pressing and packing process
- Steam / electricity cost will be the major expense in this section
- Raw material cost: Related to the packaging accessories like tags, hangers, poly bag, price stickers, barcodes, other packing material, etc.
- Overhead expenses: In this section, no machinery is used. So, the overhead expenses include electricity bill, supervisor or manager salary, building rent and other miscellaneous expenses like gum tapes, administrative stationeries.
Example:
A packing department receives an order of T-shirts with a quantity of 10,000 garments. The department required to press the garment and pack it in following method. 5 T-shirts need to be packed in a single pouch with an insert card for each garment. Each garment must be tagged with brand logo tag. In the tagging process, nylon tags are used. Each pouch is pasted with 1 small barcode sticker and a size sticker. 15 pouches are packed in a large size carton box and the box is taped with brown adhesive tape (1 roll for 5 boxes) and two information stickers are pasted on the sides of the carton box. The company produces 1200 garments/day. Also, the pressing department consists of 10 laborers with Tk.280/shift and the packing department consists of 12 laborers with Tk.300/shift. Calculate the cost of packing per garment with 5% profit. Overhead expenses of Tk.1,25,000 is incurred as a total for the month of 30 days and company works 1 shift per day. The cost details are as follows in table.
Table: Cost details of above example
| Materials | Cost/unit |
| Pouch | Tk.5 |
| Insert card | Tk.0.90 |
| Brand logo tag | Tk.0.70 |
| Small barcode sticker | Tk.0.50 |
| Size sticker | Tk.0.20 |
| Information sticker | Tk.1 |
| Carton box | Tk.75 |
| Nylon tag | Tk.15/100 tags |
| Adhesive tape | Tk.15/roll |
Solution:
…………………………………………………………………….Order quantity
No. of shifts required to complete the order = ——————————————–
………………………………………………………………….Production capacity
…10,000
= ————-
…1200
= 8.33 shifts = 8.33 days
1. Labor cost:
Pressing workers = 10 × 8.33 x 280 = Tk. 23,324
Packing workers = 12 × 8.33 x 300 = Tk. 29,988
Total labour cost = Tk. 53,312
2. Material cost:
Cost of insert card = 10,000 × 0.90 = Tk. 9,000
Cost of brand logo tag = 10,000 × 0.70 = Tk. 7,000
Cost of nylon tag = (15/100) x 10000 = Tk. 1,500
…………………………10,000
No. of pouches = ———————
…………………………..5
= 2,000
Cost of pouches = 2,000 × 5 = Tk.10,000
Cost of small barcode sticker = 2,000 × 0.50 = Tk.1,000
Cost of size sticker = 2,000 × 0.20 = Tk.400
……………………………………Total no. of pouches
No. of Carton Boxes = ————————————————-
…………………………………No. of pouches in a box
….2000
= ————
…..15
= 134 carton boxes
Cost of carton box = Tk.75 × 134 = Tk.10,050
Cost of information sticker = 134 boxes × Tk.1/ sticker × 2 stickers per box
= Tk.268
No of gum tapes required = 134/5
= 26.8 ~ 27 tapes (1 tape = 5 boxes)
Cost of gum tape = 27 × Tk. 15 = Tk.405
Total material cost = Tk. 39,623
3. Overhead expenses:
Given, overhead expenses = Tk.1,25,000
……………………………..1,25,000
Overhead per day = ———————-
…………………………………30
= Tk. 4,166.67
Total working day = 8.33.
Hence, total cost = 8.33 × Tk.4,166.67 = Tk.34,708.36
Total Overhead cost = Tk.34708.36
Total Cost = Labor cost + Raw material cost + Overhead cost
= Tk. 53,312+ Tk. 39,623+ Tk. 34,708.36
= Tk. 1,27,643.36
Profit 5%, hence = 1,27,643.36 + {1,27,643.36 × (5/100)}
= Tk.1,34,025.528
………………………………………….1,34,025.528
Packing Cost/Garment = Tk. ——————-
……………………………………………..10,000
= Tk. 13.40
Conclusion:
Packing cost calculation is an important part of pricing and cost estimation in garment industry. Calculation of garment packaging cost involves summing up the costs of materials, labor, and overheads, then dividing by the total number of garments. This ensures optimum pricing and helps maintain profitability by considering every aspect of packing.
References:
- Handbook of Textile and Apparel Costing by Rathinamoorthy, Surjit and Vishnu Vardhini
- Apparel Merchandising by R. Rathinamoorthy and R. Surjit
- Garments Merchandising by M.A. Kashem
- Practice of Garments Merchandising and Management by Engr. Md. Faruq Hosen
