[TC]² Bi-Weekly Technology Communicator

July Seminar Offerings at [TC]²

Are your required lead times shrinking? Are the quantities of different styles you are being asked to design and produce growing? In today's ever changing marketplace, Lean business practices are a must. Sign up for this two-day program to learn how Lean practices reduce non-value added activities, inventories, and operating costs while increasing quality, flexibility, efficiency, and employee retention.

Attend this seminar to get the best price on an apparel product. Whether buying or selling you will be able to make better informed decisions. The cost of a sewn product drives decisions at both the Manufacturing and Retail end of the supply chain. The common understanding derived from this seminar should help create contracts and partnerships that are beneficial, in the short and long term, to all parties involved.

August Seminars

The seminars will be presented at [TC]²’s facility - 5651 Dillard Drive, Cary, NC.

For additional information on these programs or to register, contact Debra Gill at 919.653.3501, or use our contact form.

To download or print a copy of [TC]²’s 2009 seminar offerings, click here (pdf).

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How to Calculate a Product’s Selling Price

By Kim Anderson, [TC]²

In today’s price-driven market, there is little wiggle room when it comes to calculating a product’s price. To help guarantee successful product pricing, the manufacturing cost components need to be correctly identified. The desired gross margin percentage (%GM) must also be determined. Once this has been done an accurate selling price for a product can be calculated.

Identifying Manufacturing Costs Components
There are three components to traditional manufacturing costs—direct labor, overhead and direct materials.

1.   Direct labor refers to the work executed by those employees who actually make the product on the production line. It includes everything directly affecting assembly time. Direct labor can be divided into 2 sub-categories—standard labor and excess cost.

• Standard labor is defined as the amount of time it takes a trained operator to perform a task, at a normal (average) pace, under normal working conditions.

• Excess cost is defined as money paid to operators for non-value-added tasks such as attending meetings, waiting for a machine to be repaired or machine set-up, inspection and testing of the product, etc.

2.   Overhead may be broken down into two sub-categories—indirect labor and indirect expenses.

• Indirect labor is work executed by employees who work in the production area, but do not work on the production line. Examples include employees who set up or maintain the equipment and supervisors.

• Indirect expenses include the cost of machines, building maintenance, utilities, office supplies, etc.

3.   Direct material refers to raw materials that are directly traceable to a product. Direct materials include fabric, trims, transportation costs for obtaining the raw materials, etc.

Determining the %GM
Gross Margin Percentage (%GM) reveals how much a company will earn, taking into consideration the manufacturing costs that are incurred for producing a given product. The %GM is a good indication of how profitable a company will be.

Unfortunately, there is not a hard and fast rule when it comes to determining %GM. The %GM is dependent on a number of variables, including the product type and the manufacturer’s customer. For example, if the customer retails products which fall into a mass category which are sold at low prices, the manufacturer has little opportunity to raise the %GM.  However, if the manufacturer’s customer retails a unique product which entails specialized equipment, skill or materials to produce, the %GM can potentially be higher because it might be challenging to locate an alternative manufacturer. In such a case the manufacturer may be able to negotiate a higher %GM.

Once the manufacturing costs and %GM have been identified and determined the product’s selling price can be accurately calculated:

Selling Price = Manufacturing Cost
                                 (1- %GM)

Note: the selling price can be calculated using a mark-up percentage or gross margin percentage. Mark-up percent is the percent of total cost that is profit, whereas gross margin percent is the percent of the selling price that is profit. Mark-up and gross margins are often used in calculating and evaluating selling prices. However, they should not be used interchangeably for they are defined and calculated differently.

Companies with a higher %GM will have more money left over to spend on other business operations, such as research and development or marketing. It is paramount for a manufacturing company to accurately determine its manufacturing costs and the %GM in order to accurately calculate the selling price.

[TC]² is offering a seminar titled Accurate Costing to build a Profitable Supply Chain on July 22. In this seminar attendees will learn how to get the best price for an apparel product. To read more about the seminar visit http://www.tc2.com/what/seminars.html#act.

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Connecting Through Creativity, Technology and Business
Designers and Product Developers Meet the Challenge

August 12-13, 2009
Philadelphia University, Philadelphia PA

‘Connecting Through Creativity, Technology and Business’ is a symposium for professionals working in design and product development areas of the textile, apparel, home furnishings and related soft goods industries. Program attendees will have the opportunity to hear from a diverse group of experts that will address topics and issues related to:

• Sustainability
• Emerging technologies for product design, communication and production
• Product design and management within the global supply chain
• Innovation in product design
• Maintaining and/or generating creativity among designers
• Managing product cost and quality

In addition, attendees will have the opportunity to network with other professionals in the design field and discuss technologies and business strategies that support innovation, creativity, and sustainability as key factors in the development process for soft goods.

Confirmed speakers include: Duncan Ross, AVA CAD CAM; Andrew Vermeulen, Carole Hochman Design Group; Ken Butts, Datacolor; Joy Boutrup, Designkolen Kolding; Lisa Hayes, Drexel University; Thomas Ng, ecVision; Danielle Locastro, First2Print; Gerber Technology (speaker to be named); S. Lee and Michael Pope, Kwantlen Polytechnic University; Jill Simmons, Lectra; Lisa Parillo-Chapman, North Carolina State University; Gretchen Morrisey, MorriseyDesign LLC; Marcia Weiss, Philadelphia University; Kevin Schwartz, PRTM Management Consultants, Inc.; Tim Curran and Kerry King, [TC]²; Joe Walkuski, TEXbase; Suzanne Tick, Suzanne Tick, Inc.; Tom McCall, TCM Group; Duncan Neil, University of Ulster, Belfast; and Ellen Piper.

Click here to register. For program details, click here.

Co-Produced by
[TC]², AATCC, and Philadelphia University

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[TC]² Activity
Apparel Sourcing Show 2009 - Guatemala
May 19 – 21, 2009

By Arturo Rodriguez, [TC]² Latin America

In the midst of worldwide recession, Vestex stayed the course and put on the 2009 Apparel Sourcing Show in the city of Guatemala. For 3 days in May, Mike Fralix and I were the invited guests of this great Central American sewing trade association. It is fair to say that this year’s show was much more subdued than in the past and that the crowds were thinner, yet the spirit that hovered over the show was well summed up by Carlos Arias’s words, “Get reacquainted with your customer, fall in love with small orders, send out a message of service.”

The former Koramsa, Guatemala’s flagship jeans manufacturing plant, has now been re-born as Denimatrix. With Carlos Arias at the helm, it was recently set up by PCCA (Lubbock, Texas-based Plains Cotton Cooperative Association) as the vital piece needed in becoming truly vertical. Cotton that is planted and harvested in Texas, woven into denim at their state-of-the-art denim mill also in Texas is then sent to be converted into jeans in Guatemala. Raw cotton to a finished product is all done in the Western Hemisphere. In his presentation, Arias offered a 5 to 8 week concept to store manufacturing cycle. This means that while the jeans from the Far East are traveling on the Pacific Ocean towards the U.S., the jeans from Guatemala are already hitting the U.S. stores (a 60 to 90 day advantage over Asian supply chains). As James M. Borneman, editor of Textile World,  wrote in his March/April 2009 issue, “It gets back to collaboration, partnership and innovation-only time will tell.”

Yes, it is crisis time in Central America, yet Vestex and specifically the show organization of APSS continue to stage a show of that part of the world, its 18th edition. This show has always prided itself with a first class academic conference program. This year was no exception with topics ranging from HR issues to sustainabilty topics as well as a range of technical workshops on screen printing and embroidery machines. My presentation was titled “How Green, sorry Sustainable, is YOUR Wardrobe?”

The APSS Congress was held on the second day of the show. In four sessions, experts from WRAP, OTEXA, Guess?, Pac Sun, VF Corporation as well as individuals from the VESTEX association tackled elusive problems such as sourcing strategies and CAFTA opportunities in a tough retail environment. For example, Sydney Younger, Sourcing Manager for VF Americas, mentioned that “they are delaying the buying decision to the last minute, so as to positively impact their  costumer focus.”

Efficient Product Development and good Pricing / Financial Control were the key take aways -. time for all of us (retailers, brand owners and manufacturers)  to give the customers great value.

Dr. Mike Fralix, [TC]²’s president, presented on the second day of the show, inviting the audience to think Sustainably INSIDE the Central American Supply Chain. Dr. Fralix discussed technologically enhanced solutions for processes that allow the product to remain in digital form until later in the cycle. When a physical sample is created, waste is introduced into the process. Supply chains in other industries are already following a strategy where products are developed, sold, shipped and manufactured.  This is possible because the products are shipped in digital form and converted into physical products much closer to the point of consumption.  These digital supply chains are beginning to find their way into the apparel industry but require different technologies and different thinking. At the end, Dr. Fralix challenged attendees to embrace technologies, such as virtual communities and avatars, that will change the order of the supply chain. They offer an opportunity for the Central American region to apply Lean practices for a more sustainable supply chain in the Western hemisphere.

What will 2010 have in store for the entire CAFTA region, and the 19th edition of the Apparel Sourcing Show? Stay tuned and find out!

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Partner Profile - Spoonflower

By Karen Davis, [TC]²

Spoonflower, a web site that allows individuals to create custom fabric, was launched in May of 2008 in an old sock mill in downtown Mebane, North Carolina. The area through the North Carolina Piedmont was once lined with cotton textile mills, and was chosen for its close proximity to Raleigh, Cary, Durham, and Chapel Hill.

Interest in crafting and expressing oneself creatively is growing exponentially, and Spoonflower was designed to encourage this creativity by becoming a supplier of fabric to make quilts, clothes, pillows, dolls, blankets, handbags, framed textile art and many other things. Since its launch a year ago, over 30,000 crafters have joined the Spoonflower community.

"Our goal is to take a technology that has previously been offered to professionals and to make it accessible to one and all," says co-founder Stephen Fraser. Fraser and co-founder Gart Davis worked together previously at Lulu.com, an Internet company that helped democratize book-publishing. Some of the benefits of using Spoonflower include no minimum order, fabric from $18-$32 per yard, and $5 custom swatches.

The web site offers instructions on how to format designs for print and includes a blog as well as posts from community members who share photos, ideas and processes. Each week the community votes for a “Fabric of the Week” from subscriber submissions and the winning design is offered for purchase through the web site. The winner receives 5 yards of free fabric, and subscribers may purchase the fabric for one week only before a new fabric design is selected.

According to The New York Times: “You don’t have to be a crafter to appreciate Spoonflower.com, a Web site for designing and printing custom fabric. Anyone with a dream and access to the Internet can upload an image, decide how it should be arranged (repeated, centered, tiled, etc.) and have it printed on combed cotton.”

The company prints about sixty yards of fabric a day, with 25% of its orders from international clients.  [TC]² is assisting Spoonflower to meet its order fulfillment needs through the InkDrop Printing digital print services.

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5th Annual SizeUSA User Group Meeting
August 18, 2009
**New Online Webinar Format**

[TC]² is soliciting submissions from academic and commercial SizeUSA users for inclusion in the SizeUSA webinar update. This online user group meeting format will provide more attendee accessibility and lower the cost of participation – which will be free for existing SizeUSA users and those who submit approved presentation content.

[TC]² will be presenting its latest research on shape and sizing analysis, especially with regard to virtual product development and virtual fashion.  Its new avatar creation capabilities utilizing SizeUSA data will be highlighted.

August 18th has been selected as the webinar date. Program time, registration fees, and link information will be provided in upcoming Technology Communicator issues.

If you would like to be included as a webinar presenter, please send an outline of the proposed program content to Kerry King (via our contact form) for consideration by June 19th. If you have questions, please contact Kerry at 919.653.3523.

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Important Dates

June

July

For detailed information about industry events, visit www.techexchange.com

Thanks to the techexchange site sponsors
Apparel Magazine, Gerber Technology, Lawson, Lectra, Methods Workshop and Reach Technologies.

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A Look Ahead in the Newsletter



ColombiaModa
Connecting Through Creativity

View previous editions of this newsletter

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[TC]²
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www.tc2.com
Phone: 919-380-2156
Fax: 919-380-2181

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