In the first instalment of this series I highlighted why a reliable BOL, based on standardised, accurate and consistent data, is important to both manufacturers and retailers alike. In this second part I’d like to expand on that and examine how a reliable BOL can have a real and significant impact on your business – and your bottom line. This will lead us on to an introduction to “Predetermined Time Systems”, or “PTS”, and an explanation as to how GSD has become the de facto PTS for the retail and sewn products manufacturing sector.
Product cost & time to manufacture
In today’s increasingly competitive markets, manufacturing cost is determined by two key factors – the cost of materials and the cost of manpower. Whilst it is fair to say that manpower rarely proves to be the higher cost element of the two, labour content is, nonetheless, an important component of product cost – particularly when material costs are consistently rising (witness the soaring price of cotton over the past few months) with suppliers subsequently being able to bear only a very limited amount of downward price pressure.
So, I would argue that “Bill of Labour” (BOL) must be considered as an element equal in importance to Bill of Material (BOM) and should be given as much attention as is currently afforded to BOM . Where large-scale sourcing, production and high street sales are concerned a useful mantra is “control what you can control” – and it therefore follows that BOL should be properly quantified, controlled and, wherever possible, reduced – just as BOM is now and has been for decades
But how? How can BOL be reliably quantified and controlled?
Labour cost and work measurement
I believe that the first premise is that it is essential to measure labour content accurately and consistently, and ideally to use a predictive and accepted “international standard” of measurement (more on this later). This may sound obvious, but ask yourself how you or your suppliers currently quantify labour cost. With today’s requirement for high fashion, quick turnaround, small quantities and low margins, many manufacturers have developed a tendency to “guesstimate” the labour content of a product and simply hope that their guess proves to be “accurate enough”. But what if the “guesstimate” is incorrect (which it all too often is)? The “price” will either be inflated (with the inherent danger that the order may be lost to a competitor or a product become non-viable due to it being too “expensive”) or artificially deflated (to the extent that profit margins become endangered). And let’s not forget lead time, production planning and delivery!
Labour cost is (or should be) based on manufacturing time, and if the production minutes estimated are incorrect, production lines will not be properly balanced, workers will lose motivation, factory inefficiency will follow, excessive overtime will become “the norm”, orders delayed (and subsequently air freighted at additional cost) and high-street sales opportunities lost – a series of “negatives” that affect all parties in the supply chain.
One could, of course, step away from “guesstimates” and adopt more traditional means of work quantification to establish / quantify BOL such as “Time Study” – but as was highlighted in Part One of this series, it is vital that the BOL is populated at an early stage in the product development process and Time Study cannot be applied until the product is already in production, by which time product cost and delivery dates have been agreed. So, in my experience, rather than establishing reliable time and cost for the BOL, Time Study tends to simply highlight the fact that product cost and manufacturing time were incorrect at the time of negotiation!
As I highlighted earlier, in order to be at all effective, the BOL should be populated with reliable, standardised and accurate data, Time Study, on the contrary, consists of taking a reading from a stopwatch and then adjusting the time recorded to compensate for the perceived “performance” of the operator studied (i.e. was the person working slower or faster than the average operator?), and is consequently both subjective and inconsistent. Moreover, Time Study takes little or no account of the method used to complete a given task – and therefore accepts that the method used is satisfactory (when in reality, the majority of manufacturing methods, often accepted as “the way things are done”, can be significantly improved upon).
How then can retailers and suppliers achieve the necessary goal of accurately and consistently quantifying manufacturing time and product cost? The answer lies in Predetermined Time Systems (PTS), the accepted international standard for quantifying work content and cost.
Pre-determined Time Systems (PTS)
So, now let’s look at an “international standard” of measurement.
Some considerable time ago it was recognised and accepted that the activities humans perform in a given manufacturing environment are repetitive. For example, the activity of making, say, collars for a given shirt at multiple work stations within a production line forms an identical activity across those work stations and, equally, making the same collar in other production facilities is equally identical. This concept can be extrapolated across the entire manufacturing process – from intricate lingerie to heavy weight outerwear – taking account of style variation, working environment, material type and machinery.
The movements we make in performing repetitive work were subsequently categorised by the kind of action required to obtain and dispose of objects (Get or Put), by the degree of difficulty involved in picking up or placing aside an object (Easy, Moderate or Difficult), and the distances moved by the hand / arm in obtaining and disposing of objects (Near or Far). Once such movements were identified, cine-film (running at 16 frames per second) was used to quantify the time required for each and every possible combination of those movements. If the movements took 16 frames to complete, that would equate to 1 second, whilst if the movement took 8 frames, that, logically, would equate to ½ a second. From a statistical viewpoint, this data has been proven to be accurate to within +/-5% with 95% confidence (i.e. far more accurate than “guesstimates” or inconsistently applied Time Study)
It follows then that if a product may be broken down into an “operation sequence”, then a reputable PTS can be used to further analyse each operation by detailing the movements required to complete that given operation.
So, PTS consist of a series of codes that describe human motion and each code has a proven, predetermined time associated to it, thereby giving the user the ability to define manufacturing methods times. Significant advantages follow – accuracy and consistency in quantifying the BOL, predictive design cost, reliably established product pricing, accurate and achievable targets for workers, up-front and accurate Line Balancing, a base measure for Operator Performance and Factory Efficiency and more reliable delivery schedules.
A key element in applying PTS to any BOL is the intelligent use of the data the user compiles. To explain, where a group of operations is itself seen to be repetitive (e.g. those required to construct, say, a collar, a cuff or a pocket for a given style) then such operations should be combined into a bigger “building block” thereby providing the time for the given design “feature” (the collar, cuff and pocket). Such “building blocks” may then be used for multiple styles and, where variations to the collar, cuff or pocket occur, it is a simple task to modify the PTS generated data, “save as”, and add the variation to the data library. Through this process of rapid data modification, the “library” of collars, cuffs, pockets et al, quickly expands to facilitate the predictive costing of full garments and multiple style variations.
GSD – the “international standard” PTS for sewn products
The original and most well known is MTM” (Method / Time Measurement), which was developed for, and applied, to multiple industrial activities. Whilst it’s early application in the sewn products sector was a success, the complexity of the data within MTM made it time consuming to use, and the extensive number of MTM codes and times meant that the opportunity for “operator error” was vastly increased.
A need was subsequently recognised for a simplified PTS for the sewn products sector and as a consequence “GSD” (General Sewing Data) was developed (by combining the more complex MTM data into larger “building blocks”), thereby providing that manufacturing sector with a PTS that is specifically designed to analyse the handling of fabrics, trims, equipment and machinery directly related to sewn products construction.
GSD was developed in 1976, has since then become established in more than 60 countries worldwide and is today recognised as the “international standard” PTS for the apparel and sewn products sector.
Major brands are adopting GSD as the language of choice in cost negotiation and for achieving Social Compliance (GSD adheres to the guidelines set out by the International Labour Organisation (ILO), Geneva) and their suppliers are also increasingly using GSD to quantify any apparent differences in production time and cost during the negotiation process – the “Fact Based Negotiation” to which I referred earlier. Moreover, the manufacturing sector also applies GSD to quantify existing working methods and to then improve on those methods, thereby improving productivity, increasing their competitive edge, reducing prices and safeguarding profit margins.
So, in summary, GSD facilitates the identified needs of the Retailer / Brand and the supplier, in that it offers the opportunity to accurately and consistently predict manufacturing time and cost and, when present at both ends of the supply chain, it provides a common technical and auditable language to facilitate fact based negotiation. It also promotes productivity improvement in the manufacturing process and therefore plays a significant part in cost control – a benefit to all parties involved in today’s competitive environment.
I hope through these articles I have demonstrated why the BOL is such a vital part of product cost and why it ought to be given the same attention and importance as the BOM and be populated by data with integrity, international standing and traceability.