Measuring CM costs during sales stage…

Sep 9, 2021 Article 3

Can we have accuracy in production cost calculation during the sales stage?

There are many factors that build up the production cost and one of those is the effectiveness of assigning the correct operators for certain tasks.

  • First, we need to know the processing time required and then try to balance the line
  • Second, look at the result of line balance with the idle of each process
  • Third, compare the output target and our cost (direct, indirect, and factory overhead) Last but not least, execute the best option that you have

The above task takes time, especially for production managers who are already busy with daily work to meet targets. And, the next questions are:

  • Is the target realistic to achieve?
  • Does the line balance reflect the optimum result?
  • Can we have this process much earlier to help during the sales stage?

The last question is something we normally miss as we rely on sample rooms which most of the time cannot represent the real situation on the production floor. So, less accuracy in CM cost calculation.

Skill-Math will help factories to calculate CM costs during style review, this will help the Sales team to negotiate with buyers. For factories that have multi locations or subcontracts, this will help to make a decision on which site or Subcon can give better CM cost, therefore, making the business more profitable.

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