Garment Manufacturing Economics and CMT Costing

Garment manufacturing economics analyses the cost structure of cut-make-trim (CMT) and full-package (FP) garment production — the most labour-intensive stage of the textile value chain where labour cost differentials between countries create the geographic production incentives that drive global apparel sourcing patterns. FOB cost build-up (cost sheet construction): fabric cost = fabric consumption (m/garment) × fabric price ($/m) — T-shirt 170 cm wide jersey: fabric consumption 0.65 m/piece at 160 g/m², price $2.20/m → fabric cost $1.43/piece = 56% of FOB; trimmings $0.25 (labels, thread, hang tags, polybag = 10%); CMT labour $0.60 (8 min SMV, 75% efficiency, $0.95/hour Bangladesh operator wage = $0.60/piece = 23%); factory overhead $0.25 (100% of direct labour overhead rate); profit $0.15 (6%) → total FOB $2.68. SMV (Standard Minute Value) calculation by GSD (General Sewing Data): operation breakdown (front-back shoulder seam 0.45 min, side seam 0.38 min, hem 0.42 min, label attachment 0.12 min, collar seam 1.85 min, sleeve attachment 1.20 min, sleeve seam 0.35 min, QC and folding 1.80 min) → total SMV 6.57 min at 100% BST (basic sewing time); at 75% operator efficiency → actual time 8.76 min/piece. Line balancing efficiency: target 90% line balancing efficiency — 10% imbalance means 10% capacity lost to idle operator waiting; bottleneck operation (collar assembly, slowest at 2.3 min) limits line output — re-engineering collar jig reduces to 1.8 min, improving line balance from 81% to 89%, increasing daily output from 620 to 760 pieces on 25-operator line. Automation return on investment: automated pocket setter (Brother pocket setter $45,000 capital cost): manual SMV 1.20 min/piece at $0.95/hour = $0.019/piece labour; automated SMV 0.25 min/piece at $0.10/piece machine cost → saving $0.009/piece → ROI at 2 million pockets/year saving = $18,000/year → payback 2.5 years in high-volume denim production.