CM stands for cost of making, and in some regions for cut and make. It is the price or cost of turning cut fabric and trims into finished garments: cutting, sewing, finishing and packing labour, plus the factory's overheads. In CM-based business the buyer supplies the materials and pays the factory for CM only; in full-package (FOB) business, CM is one element of the cost sheet.
The formula#
- SMV: the garment's standard minute value.
- CPM: cost per minute, the factory's cost for one available minute.
- Efficiency: the efficiency the factory expects to achieve on this style and order.
The efficiency division converts the cost of an available minute into the cost of an earned minute. A line that works at 60% efficiency needs 1 / 0.6 = 1.67 available minutes for every standard minute of work.
Building the cost per minute#
Monthly manufacturing cost is a company decision, but usually includes:
- Direct wages of operators and helpers
- Indirect staff salaries in production (supervisors, quality, IE, maintenance)
- Utilities, rent or depreciation of the building
- Depreciation and maintenance of machines
- Share of administration overheads allocated to production
CM for a style#
The CM cost calculator does both steps, and can derive CPM from monthly cost.
The efficiency assumption decides everything#
Efficiency is the number most likely to be wrong in a CM quote:
- Order size: a small order spends much of its life on the learning curve. Quote it at a lower efficiency than a long-running style.
- Style complexity: more operations, more critical seams and more handling reduce achievable efficiency.
- Fabric difficulty: slippery, stretchy or striped fabrics slow operators down.
- Line experience: a line that has made similar styles recently reaches running efficiency faster.
A useful habit is to check each quote against the factory's actual efficiency history for similar styles and quantities, not against the factory average.
CM and capacity#
CM is also a way of pricing capacity. A factory that knows its minutes available per month (see garment capacity calculation) can see whether an order uses those minutes at a rate that covers cost. Two orders with the same CM per dozen can be very different in value if their SMVs differ.
Common CM mistakes#
- Counting efficiency twice. If CPM is calculated per produced (earned) minute, do not divide by efficiency again.
- Using a buyer's SAM that has a different scope from the factory's own operations.
- Leaving out indirect costs, which makes CPM look lower than it is.
- Ignoring overtime premiums in peak season.
- Quoting running efficiency on a first order.
Related#
Related guides#
- FOB cost: where CM sits in the full FOB price.
- SMV calculation: building the SMV that CM depends on.