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Target, Walmart Supplier Adopts Time-Based Productivity Benchmarking System

Amid turbulent supply chain disruptions, one Korean apparel supplier that counts retailers including Target, Walmart, Kohl’s and Gap as clients is hoping it now has the blueprint to optimize manufacturing costs and improving garment production efficiencies.

Apparel designer, manufacturer and distributor SAE-A Trading Co. Ltd. has implemented Coats Digital’s GSDCost solution in all 41 of its production facilities across 10 countries to establish international standard time benchmarks that would optimize processes, and increase efficiency and productivity across its entire workforce. Additionally, the solution is designed to enable SAE-A to boost transparency surrounding its global labor costs to support both its own and its brand partners’ social responsibility goals.

These benchmarks would be based on what Coats Digital calls Standard Minute Values (SMVs), which represent the time required for a qualified employee working at standard performance to perform a given task. For example, when sewing two parts together, if the average time to match and get the two parts organized takes 1.95 seconds, therefore it would have an SMV of 1.95. The SMV includes additional allowances for rest and relaxation, machine delay and anticipated contingencies.

The metric is relevant to measuring business processes including factory efficiency, production targets, line balancing, production planning and employee incentives.

While SAE-A initially used complex time measurements based on time studies and historical data found in Excel spreadsheets across its global enterprise, the company sought a standardized solution that could accurately record SMVs through standard motion digitized codes. In the case of GSDCost, the manufacturer could analyze for all labor-related activities, whether it be cutting, sewing, inspecting or packing, to generate these codes, which could then be used to benchmark the manufacturing method used and the associated labor costs for finished goods.

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“As a result of the pandemic, there was increased pressure on the entire global sewing industry to secure new costing and buying schemes that were more accurate, increased efficiencies and facilitated greater transparency within the supply chain,” said Travis Han of the SAE-A manufacturing excellence team, in a statement. “SAE-A wanted to be ahead of the curve and ready for whatever the future might bring, so it was important that we had a common language embedded within all our global facilities to accurately measure the actual cost of making each garment—factoring in varying fair living wage costs and machine efficacy across all our territories.”

Han noted that the digital transformation was “fast and effective,” even in adverse conditions created by the Covid-19 pandemic, namely social distancing and foreign immigration restrictions. He credited Coats Digital’s flexible approach to GSDCost’s on-schedule rollout.

Coats Digital’s GSDCost method analysis is ultimately designed to support a more collaborative, transparent and sustainable supply chain. Applying common language and standards can support accurate cost prediction, fact-based negotiation, and a more efficient garment manufacturing process, Coats Digital says, while concurrently helping brands deliver on corporate social responsibility commitments.

In late 2020, Coats Digital enhanced GSDCost with a globalized fair wage tool, which enables brands and manufacturers to agree on the fair living wage allowance for any given garment, in any factory in the world. Additionally, the company integrated its real-time digital feedback loop of actual versus standard minute value at the operation level, so that users can better gauge the variances and opportunities for proactive, continuous improvement.

“We are delighted to be partnering with such a forward-thinking apparel manufacturer on the global stage. SAE-A has been quick to innovate and respond to the growing imperative for the fashion industry to digitally transform manual processes in order to mitigate risk and foster greater visibility and collaboration with customers and supply chain partners alike,” said Tan Demir, associate manager, Coats Digital, in a statement. “SAE-A now has the tools it needs to set meaningful targets based on fact-based capacity data, which will ultimately provide significant cost and waste reduction efficiencies that brands and consumers increasingly demand, and we look forward to ensuring SAE-A continues to remain ahead of the game in a volatile and highly competitive environment.”

Established in 1986, SAE-A operates in South Korea, the U.S., Indonesia, Vietnam, Guatemala, Nicaragua, Cambodia, Myanmar, Haiti and Costa Rica, and is headquartered in Seoul.

Coats Digital is the supply chain software wing of Coats Group, the U.K.-based industrial thread manufacturer also known for its yarns, zippers and trims. More than 3,000 global factories leverage the company’s end-to-end apparel, footwear and textile software and SaaS solutions to help brands and manufacturers optimize and accelerate business-critical processes from design and development, as well as production planning and control, fabric optimization and shop floor execution.