KPI (Key Performance Indicator) in Garment Industry
Department of Textiles (Fashion Technology)
DKTE’S Textile & Engineering Institute, Ichalkaranji, India
Intern at Textile Learner
KPI (Key Performance Indicator):
Key Performance Indicators (KPIs) is an important terminology which is used to measured and assess where the factory currently stands and to find key focus areas where management needs to look into and work upon. The Garment Industry KPI’s is a collection of data driven charts and diagrams designed for garment manufacturers. The Key Performance Indicators (KPIs) are measurable values which show the performance of any garment industry. The Factories use various KPIs that demonstrate factors that give an idea related to how effectively factories uses its resources. In this way, evaluation of KPIs at multiple levels where management needs to reach target. This is the era of competition and we have to survive with a global challenge in the Garment Industry. If you carefully work with Key points that are KPI Factors of Garments then surely Garments business will flourish. The management team should focus on KPI for their industry growth. KPI report will help you to look into the actual condition of your garments and what quality it is achieving in their garment industries.
Key performance indicator (KPI) means a set of measurements, that are quantifiable and those measurements in long term. KPI defers depending on the type of garment industry. KPI can also be used as a comparison tool also. KPI will also vary depending on the objective of different organizations. KPI is a form of communication within garment Industry. So, while setting up the KPIs of a specific organization one should keep in mind the target and objectives of the organization. In the Garment industry, professionals always talk about product quality, defects, and quality systems. To the buyer, ‘quality’ means – the end product quality of what they are receiving from the factory, quality should be as per their requirement. No more, no less. Factories track their performance on the following quality control KPIs. Once they have KPI data and quality analysis of different processes, they can improve their quality performance continuous basis after taking measurable action. KPI not only considered for quality department but also for other department of garment industry as well.
Importance of KPI in Garment Industry:
For any garment industry the important parameters which need to be given the highest priority is gaining profit, increasing production and giving quality product to customer. Providing quality product to customer is must in order to maintain goodwill with the buyer and maintaining good relations with the buyer in order to get long- term profit with those buyers. While any garment industry is considered the most important parameter is achieving higher production and higher productivity. Production depends on various departments’ performance.
List of KPI (Key Performance Indicator) in Garment Industry:
|Quality related KPI’s||Sewing related KPI’s||Cutting related KPI’s|
|Factor Efficiency percentage||Line wise sewing efficiency||Marker efficiency|
|CPM cost||manpower to machine ratio||Cutting production|
|MMR ratio||Absenteeism||DHU in cutting|
|Cut to ship ratio||DHU in sewing||Cutting delay / Input delay to sewing line|
|DHU %||No of style change||Fabric utilization|
|RFT||Idle time) machine sewing|
|On time delivery rate|
|Non – productive time|
|Cost of poor quality|
|Average Style change over time|
KPI’s Related to Quality:
Factory Efficiency Percentage: Factory efficiency shows how efficiently the production / the order is carried that is what is amount of work is done. This parameter is important because the capacity planning of the factory and garment making cost is done based on factory efficiency. Factory efficiency includes all line minutes that is considering the time required to make one garment produced and total hours attended by direct labor in sewing floor. Target factory efficiency varies based on the order quantity. For the detailed calculation of efficiency refer to ‘how to calculate the efficiency of a production line or batch?” For factory efficiency – calculate total minutes produced by all lines and total minutes attended by all lines.
Factory efficiency% = (Total minutes produced X 100)/Total minutes attended.
Man to Machine Ratio: When it is factory’s Man to Machine ratio (MMR), every employee working in factory is considered under strength of manpower. So, Man: Machine = Total manpower: Total sewing machines available in the factory (machines those are in use). For example, if a factory has 1000 sewing machines and total manpower of the factory is 2000 then man to machine ratio =2000 : 1000 OR 2:1. This ratio varies from factory to factor and product to product in an organization structure.
Cut to ship ratio: Cut to ship is a ratio of total cut quantity against total shipped quantity of an order. This indicator is measured as per order wise and monthly shipped orders. To keep buffer (for damaged, defective garments) factory cuts extra pieces than order quantity. For example, factory received an order of 50000 pieces, cut quantity 50400 pieces (1% extra cutting) and total shipped quantity 20000 pieces. Cut : Ship = 50400 : 20000 = 2.52. This indicator is measured to control surplus quantity that is extra quantity after shipment in short we are reducing extra cutting and damaged garment, that is we are avoid excess inventory and controlling cost of factory. Target Cut to ship ratio is 1.
Order to ship ratio: The buyer expects to receive full quantity from the supplier that has been ordered. This is the most important factor that buyer uses for vendor evaluation purpose. This indicator is calculated as = Total order quantity/ Total shipped quantity. The target of Order to Ship ratio is always 1. It is good if the factory can ship higher than order quantity, only if the buyer accepts extra quantity
On time delivery rate: Time is an important parameter. On time delivery maintain good relations with the buyer and improve goodwill among vendor and buyer. Target on-time delivery of each style is to meet shipment delivery date. If not meet reasons of not meeting delivery date are analyzed. It is calculated as = Total orders shipped on time/Total orders shipped in the month. For example, if factory shipped 15styles on time out of total 18 styles shipped in a month then On time delivery of that month is =15/18 x 100% = 83.3 %
Average style change over time: The time gap between the previous style over (last piece out from the line) and first piece output of the current style is known as style change over time. Short gap between the new style and old style is considered as better performance level. It varies style to style and production systems. Time of Change over time of each style is recorded an average changeover time of the factory is measured.
Right First Time (RFT) quality: This indicator is always considered in percentages. Total audits passed in the first time out of total audit conducted by auditors. Right first time quality is measured in various levels of garment processing and analysis is done audit wise. Higher values (percentage) of right first time quality is considered as better performance of the factory.
Quality of Production: The quality level of each department is measured in DHU and Percentage defective unit. Higher the value of DHU higher alteration time and higher cost incurred in quality. In short it increases the time loss and this may affect on overall time of delivery of final product to the buyer.
Downtime percentage: Downtime is one of the topmost reasons for less factory efficiency. Factory downtime depends upon two things that are machine and manpower utilization. Properly utilizing these both is skill. Top 5 reasons for downtime (also known as non-productive time, Off-standard time) are line setting, operation sitting idle, no feeding, machine breakdown and no planning for a line. Properly dealing with these factors may help to reduce downtime percentage.
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Non- Productive time: The time that is spent by an operator without producing any garment (standard minutes) like ‘set up time’ is called non-productive time. To avoid loss time this is necessary.
AQL Levels: It is the criteria followed by factory to pass / fail the item being inspected that understands what AQL needs to followed as per the number of defects. It varies from factory to factory. It is important parameter for knowing the quality performance of product.
KPI’s Related to Sewing:
Line Wise Sewing Efficiency: Activity makes the whole garments, so estimating sewing efficiency is an important factor for the garments industry. To know the line wise sewing efficiency we should to know the man to machine ratio. We need to maintain this ratio in order to achieve more efficiency.
Manpower to machine ratio: The ratio among manpower to machine is to be important to know. Every factory has self-recorded of these ratios to reduce manpower, keeping less helper with the best possible production outcome.
Absenteeism: Operator absenteeism affects sewing production, creates the bottleneck (Getting less output and consuming more time and hampering the overall production rate). Every factory target employee absenteeism rate is zero % but sometimes it may not possible to keep this percent.
No of Style Change: Style change effect on productivity, efficiency, and quality. So the garments manufacturer wants big lot order more rather than small quantity order for any lot so as to accept the order as per huge quantity.
DHU: Defect rates also a key point in garments manufacturing. The factory has to rework for repairing defects. The defect generation reduces the operator’s efficiency and we get less output. The factory wants to keep defects as low as possible for per hundred units
Idle Time/Machine: Idle time is also known as loss of time. For any type of reason, operators are not working and are considered to lose time. That is they are sitting idle having no work to do, example: Operators are waiting for pieces to come to sew. Common reasons for idle time are; using a new layout, machine trouble, no work, etc.
KPI’s Related to Cutting:
Cutting Production: Cutting production is another important factor as like cutting efficiency. Cutting production is related to spreading, cutting, numbering, and bundling. Cutting Production should carry all these activities with proper coordination in order to achieve the order at time.
DHU (Defect per Hundred Units) in Cutting: In cutting, there is no way to repair the defect, must replace panel as per marker with shade matching. So if DHU is high, you will be needed to rework. And these defected panels go into recutting department where in these issue get solved.
Cutting Delay/Input Delay in Sewing Line: Sometimes cutting and sewing does not start as per plan. Only two reasons behind this. If PP/Size Set or pilot run samples fail to buyer QC to meet the quality standard, apparel manufacturers have remake samples and submit again to buyer QC to pass samples and get cutting approval. Sewing can be delayed for trims and accessories delay receives from the supplier. These may impact order and hamper the overall performance.
Marker Efficiency: Marker efficiency is also important parameter when cutting part is considered. If marker efficiency is good there will be less amount of wastage and it will help us to deal easily with End bits and reduce the inventory in terms it reduce the extra cost investment.
From the discussion we can say that KPI (Key Performance Indicator) plays a vital role in garment industry and it helps to track the production by providing all the records which are easily accessible and understandable and according to record if there are any loopholes then working on loopholes can be possible and these will improve overall production process and improve the quality of product that a buyer require and helps to manage orders effectively.
- Key Performance Indicators: Developing, Implementing, and Using Winning KPIs by David Parmenter
- Maintenance Costs and Life Cycle Cost Analysis by Diego Galar, Peter Sandborn, and Uday Kumar
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Founder & Editor of Textile Learner. He is a Textile Consultant, Blogger & Entrepreneur. He is working as a textile consultant in several local and international companies. He is also a contributor of Wikipedia.