Question:
My doubt is how to calculate the rate for individual operation (ex: Shoulder attach, Neck rib attach, Sleeve attach, etc.) for any style and what are the factors to consider during calculating that price. My manager simply told me that the rate is 0.40 Rupees for this operation, 0.90 rupees for that operation. But I do not know how to calculate this one. Kindly give me the solution for this with some examples. Your guide will be useful to me.
I had the same experience when I was working in a garment export house. We were making knitted items and used piece-rate operators (provided by manpower contractors) for stitching garments. Our factory manager used to set up prices for each operation after analyzing the operations in a garment. To decide operation rates, he used his experience of how many garments an operator can make in a day, rates provided by the other factories for similar operations in that place.
Now, I know the scientific ways of estimating operation rate. I will share the procedure of calculating the operation rate and share articles for further reading.
When you calculate the piece rate for the garment operations, you need to consider these things -
Answer:
I had the same experience when I was working in a garment export house. We were making knitted items and used piece-rate operators (provided by manpower contractors) for stitching garments. Our factory manager used to set up prices for each operation after analyzing the operations in a garment. To decide operation rates, he used his experience of how many garments an operator can make in a day, rates provided by the other factories for similar operations in that place.
Now, I know the scientific ways of estimating operation rate. I will share the procedure of calculating the operation rate and share articles for further reading.
When you calculate the piece rate for the garment operations, you need to consider these things -
- Operation SAM
- minimum daily wages and
- the operator's capacity.
Form the daily wages, we calculate the hourly rate and per minute rate of the sewing operators and other workers. From the operator’s capacity, we can estimate how many pieces an operator can make. Then calculate possible operator earning and the hourly rate.
You also need operation SAM (standard minute) for deriving the actual cost of an operation. The scientific way of calculating an operation rate is as the following.
Operation Rate = (Operation SAM x Rate per minute)
Let us say, SAM of an operation is 2 minutes and the hourly rate is Rs. 60 (Rate per minute is Re 1). Therefore, the operation rate for this operation is 2x1=Rs. 2
If an operator makes 25 pieces per hour, his daily production will be 200 pieces. His daily earning will be Rs (200 x 2) = Rs. 400.
Note: If the calculated operation rate is less compared to the daily wages and an operator cannot earn the daily minimum wage by working the whole day (8 hours) then you need to give allowance to adjust daily minimum wages and operation is set accordingly.
Other parameters for calculating operation rate are
You also need operation SAM (standard minute) for deriving the actual cost of an operation. The scientific way of calculating an operation rate is as the following.
Operation Rate = (Operation SAM x Rate per minute)
Let us say, SAM of an operation is 2 minutes and the hourly rate is Rs. 60 (Rate per minute is Re 1). Therefore, the operation rate for this operation is 2x1=Rs. 2
If an operator makes 25 pieces per hour, his daily production will be 200 pieces. His daily earning will be Rs (200 x 2) = Rs. 400.
More reading on piece rate calculation
I have already published an article on this topic. For more understanding of piece-rate estimation, please read the following articles from my Blog and other sources.- Determining garment Piece Rate from SAM
- How to justify the garment Piece rate
- Minimum wages and Piece rate pay by ILO.org
- Setting a fair piece rate for home workers
Note: If the calculated operation rate is less compared to the daily wages and an operator cannot earn the daily minimum wage by working the whole day (8 hours) then you need to give allowance to adjust daily minimum wages and operation is set accordingly.
Other parameters for calculating operation rate are
- The criticality and difficulty level of sewing operations,
- Type of sewing machine operator needs to handle
- Type of material operator needs to handle