One of the most well defined parameters used today to identify the efficiency in processes of factories is Cut to Ship Ratio.
Cut to Ship Ratio: is the percentage of garments shipped out of total no of garments cut for the order. It is meant to show a bird’s eye view of the entire system. A number close to 98% will be considered very good. This means only 2% of garments are rejected or lost in the system.
Cut To Ship Ratio = (Total Pieces Shipped) / (Total Pieces Cut)
Total pieces shipped: This should be taken from final packing list.
Total pieces cut: This should be all the garments cut for this order. This should be taken from cutting room daily records.
However, this metric is incomplete.
The Cut to Ship ratio only takes into account the sewing processes of a factory. It fails to provide a holistic view of the entire system. A 60%-70% cost for a garment producer is the cost of fabric. This ratio does not take into account the cost incurred vs revenue made. Hence, to define this segment we add another element to it and take into account Buy to Cut Ratio.
Buy to Cut Ratio – is the percentage of number of garments cut with respect to number of garments fabric was bought for.
Together they form
Buy : Cut : Ship
Buy to Cut to Ship Ratio – takes into account two separate ratios (Buy : Cut and Cut: Ship) to together give a more accurate overview of the factory.
Taking an example,
An XYZ factory has to manufacture 300 pieces. The fabric ordered is for 330 pieces. The cutting records show a cutting of 310 pieces. And the total garments shipped are 295.
Buy to Cut Ratio: 310/330 = 93.9% (6.06% garments wasted in cutting room)
Cut to Ship Ratio: 295/310 = 95.1% (4.8% garments rejected in sewing room)
Actual overall loss to factory during processing of this order = 295/330 ~ 10% as opposed to the 4.8% as given by the Cut to Ship Ratio.
On one hand the age old Cut to Ship Ratio defines your sewing processes, the Buy to Cut ratio brings into light the practices of the cutting floor.