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Success Story: Sportswear Supplier Leverages Benchmarking to Boost Factory Production 10%

Success Story is a Sourcing Journal feature highlighting innovative solutions across all areas of the supply chain.

With a client list including companies like Walmart, Kohl’s, Abercrombie & Fitch and Levi’s, time is money for Vietnamese leisurewear and sportswear manufacturer Son Ha Garment Joint Stock Company. As such, benchmarking factory productivity at the firm must be an exact science.

In the months after implementing Coats Digital’s cost optimization solution GSDCost, Son Ha Garment has realized a 10 percent improvement in its core Standard Minute Values productivity benchmark.

But this progress is just the tip of the iceberg. The apparel supplier says it is on target to realize an efficiency improvement goal of over 50 percent once the solution has been further embedded across the business. With a 3,400-strong workforce, that adds up fast.

Standard Minute Values (SMVs) are a benchmark from Coats Digital that represents the time required for an employee working at standard performance to complete a given task. For example, when sewing two parts of a T-shirt together, if the average time to match and get the two parts organized takes 1.95 seconds, it would have an SMV of 1.95. The SMV includes additional allowances for rest and relaxation, machine delays and anticipated contingencies.

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

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The GSDCost implementation has reduced unnecessary staff hours that were wasted on demanding and burdensome manual tasks, and the benefits have extended further. Son Ha was able to boost order and cost planning visibility, improve on-time deliveries, significantly increase production efficiencies, increase orders and also build out a more achievable performance incentive program for workers.

“One big plus of using standard and time benchmarks is that they provide more accurate expectation and estimation for our production,” said Le Huu Phong, CEO, Son Ha Garment Joint Stock Company.

Seeking a ‘zoom-in view’

Prior to deploying GSDCost, Son Ha suffered due to poor data visibility, lost purchase orders and complicated cost negotiations with customers. Adding to the problem, the company’s cost, sourcing and planning processes were manually created and stored across a variety of sources within different departments.

“Losing purchase orders and complicated cost negotiations negatively affected our revenues and also our ability to build trust with our clients,” Phong told Sourcing Journal. “We needed an efficient way to communicate with our clients by having certain common grounds that all parties agree upon.”

According to Phong, the firm’s capacity and cost planning reports were often inaccurate because the data was based purely on historical experiences, which is typically information that is not easy to find by all members of the team. As such, the company sought consistent and standardized data that could be reusable in the future, and a more scientific way of improving productivity.

“Specifically, we are looking for a ‘zoom-in view’ into each of our production lines and see exactly where we should focus our efforts to have maximum impact on the overall productivity,” said Phong.

In using GSDCost, the manufacturer could analyze all labor-related activities, whether it be cutting, sewing, inspecting or packing, to generate “standard motion codes,” which could then be used to benchmark the manufacturing method used and the associated labor costs for finished goods.

Established in 1969 and located in Hanoi, Vietnam, Son Ha Garment Joint Stock Company exports 60 percent of its jackets, trousers, sports apparel and T-shirts to the United States, and 30 percent to the E.U.

The manufacturer supplies a who’s who of leisurewear and sportswear customers including Columbia Sportswear, Umbro, Walmart, Costco, Quiksilver, Abercrombie & Fitch, Kohl’s and Levi’s. According to Phong, Columbia Sportswear introduced Son Ha to Coats Digital, the apparel, footwear and textile-specific software business of industrial thread company Coats Group.

Coats Digital’s GSDCost method analysis and pre-determined times solution are designed to establish an international standard across the sewn products industry. The solution is built to support a more collaborative, transparent and sustainable supply chain, in which brands and manufacturers establish and optimize “International Standard Time Benchmarks” using standard motion codes and predetermined times.

This use of a common language and standards further help support accurate cost prediction and a more efficient garment manufacturing process, while concurrently delivering on corporate social responsibility (CSR) commitments.

“In the future, we would like to digitize most parts of our operations including planning, import-export, production and accounting,” said Phong. “The goal is to utilize technology to create a well-connected network that encompass all of the day-to-day operations of the business. With this network, every change would be instantly visible to the management (as well as its potential consequences), so that managers can make better decisions that truly benefit our firm.”

While Son Ha Garment has not yet implemented the GSDCost Fair Wage Tool within its operations, the company is working on ensuring that a fair wage can be negotiated into accurate and transparent costing proposals.

More than 3,000 global factories leverage Coats Digital’s software solutions to help brands and manufacturers optimize and accelerate design and development, as well as production planning and control, fabric optimization and shop floor execution.