Cut to Ship Ratio – An Incomplete Judge.

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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.

Hence,
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)

Hence,
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.

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7 Comments

  1. Mian Mushtaq says



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    Hi Mausmi Ambastha,

    Thanks for your response. It is quite helpful. But there are factors to be considered and when we calculate an order by its Size and inseam requirement, the excess %age jumps higher than out required.
    let Suppose we have a size X and Customer require 10 PCS in this size. 100% cut to ship is required and also every factory try to achieve 100%. now if we require 10 pcs to ship we have to cut process loss %age and we cut 12 pcs. now in percentage we are cutting 20% Extra, in this can we can’t do any thing, as requirement is 100%.

  2. Engr Md. Zahidul Islam says



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    Thanks for your sharing

    1. Mausmi Ambastha says



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      You’re welcome Md. Zahidul Islam. The aim is to educate the industry as a whole about minute but highly beneficial points for measuring the effectiveness of your production facility.

  3. Anonymous says



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    Hi Mausmi,

    As my experience Cut:Ship cannot be dropped out in a organization which operates from Cut to Ship, As you mentioned in your article too, if you only considering to measure cutting department proper utilization of fabric, there are many areas for us to check.

    1. 1st Check should be Fabric Ordered parameters : Actual fabric received parameters (Weight and width of the fabric and other parameters such as skewness, shrinkage, Average yardage per shade grading specially for wash garments).
    2. Marker efficiency used to order fabric : Actual marker efficiency)
    3. Table utilization
    4. Labour utilization (Laying> Cutting> Numbering> Bundling)
    5. Fabric Order: Cut

    However Cut : Ship encapsulate all the possible losses that can happen in the sewing floor from Line input to finishing output.

    Certainly if someone is using this measure to asses cutting room productivity, it is as result of not knowing the theory of SYSTEM (SYSTEM= Input > PROCESS> Output).
    Any measure of a specific PROCESS should measure INPUT Vs OUTPUT to find productivity. CUT is only output of the cutting department. But SHIP has nothing to do with CUTTING SYSTEM.

    1. Mausmi Ambastha says



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      Hi,
      Cut to Ship is an important measure and should not be dropped and as per my understanding this metric should be further enhanced with Buy: Cut: Ship. This is what I have tried to emphasize in this article. This will measure the basic point that “AM I earning enough penny from what I am spending to buy material”
      The reasons for the above metric being low or high can be many and requires various levels of intervention and analysis.
      Cutting productivity is a completely different topic altogether and needs to be discussed separately. Neither Buy: Cut : Ship does give no insight in the cutting room productivity parameters.
      It’s a pleasure to know that you follow my articles. I will be discussing the above two topics in further articles.

  4. mian mushtaq says



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    Nice work done…
    I am doing job in a jeans factory… we are trying to fix a standard for cut to ship ratio by means of the customer standars of accepting less or excess %age ..
    Do you have anything in your mind for different senarios.. it will be very helpful.. now we are doing it by order qty and %age acceptable for the customer to ship.

    1. Mausmi Ambastha says



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      Hi Mian Mushtaq, Thanks a lot for your appreciation. It is a good step that you are looking in to standardising cut to ship ratio. The good cut to ship should be 98% to 99%. This means that if you had cut 100 pcs you were able to ship 99 of those pcs.
      To determine the quantity; if your buyer does not allow short shipment then add order quantity +x% where x is the rejection % in cutting, sewing , finishing inspections. If your buyer allows to ship in excess then do not buy fabric for excess instead within the same fabric calculate how many pieces size wise will you be able to produce excess of order quantity as per production consumption and then determine the plan cut quantity.
      I would also recommend to monitor Buy : Cut : Ship
      Let’s understand this with an example.
      Let’s say you had an order of 2800 pcs.
      Your consumption is 1 meter. You had bought 3000 meters of fabric.
      Therefore BUY = 3000/1 = 3000
      Let’s say your buyer accepts 5% more so you decided to cut 2800 *5% = 2940
      Finally at the time of shipment you were able to ship 2912 pieces only.
      So BUY: CUT : SHIP is 1 : 0.98 : 0.97
      Ideal ratio will be 1:1:1
      Hope this helps in your understanding.

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