How to Calculate CMT In The Garment Industry

Calculate CMT In The Garment Industry

CMT stands for ‘Cut, Make, and Trim.’Under this umbrella, the manufacturers cut the cloth, make it according to the design, and trim it with the trimmings. It is basically the cost of making a charge. Certain methods should be followed while calculating CMT.

Posh Garments is here to tell you in detail about how to calculate CMT in the garment industry! Keep reading!

What is CMT?

CMT is a costing method that is used to determine the overall expense incurred while producing a garment. It involves the primary stages of garment production; Cut, Make, and Trim.

This is a very reliable method to find out cost as it gives accurate estimation. Businesses also set up their pricing model based on the CMT. Financial planning also depends on this. It also facilitates production planning.

Furthermore, CMT also sketches out where the garment factory should reduce costs. It is also essential for financial reporting and analysis. The cost efficiency derived from it helps to select vendors.

What Factors Should You Consider While Calculating CMT?

You have to keep in mind a lot of factors while calculating CMT. All these are necessary to know for proper calculation. Check these factors out!

  1. Cost of Fabric: You have to calculate the fabric consumption. Then you need to list down the cost per unit of all types of fabric.
  2. Cost of Labor: Labor cost has to be calculated in three phases. These are the cutting, making, and trimming phases. The amount will vary in every phase.
  3. Cost of Overhead: Overheads may include factory rent, maintenance, general overheads, utilities, depreciation of equipment, cost of maintaining equipment, and other relevant cost.
  4. Cost of Material: It comprises the cost of accessories like buttons. labels, zippers, interlining, additional materials used in the garments for comfort or structure, and linings.
  5. Design Inticracies: Garments that have complex designs require more labor and time. The cost of adjusting and creating patterns is extra. These two things should be taken into consideration.
  6. Lead Time: If there are shorter lead times, speedy production processes are required. It will increase the cost. Again in case of urgent delivery, the charges will increase too.
  7. Efficiency of Production: In the case of cutting, there will be fabric and material wastage. It should be factored in. Besides, the cost is reduced when garments are produced in a large volume.
  8. Quality Control: Garment production requires inspection costs too. It is done to ensure the quality of the garments. Sometimes, there are extra costs for repairing the defects or reworking.
  9. Production Set Up: Production Line setup, preparation, and adjustment for orders have extra costs. Sometimes, a few clients ask for samples or prototypes. These also have additional costs.
  10. Fluctuation of Currency: If the factory imports its material, it should definitely consider the currency fluctuation. It affects the cost to a great extent.

How to Calculate CMT in the Garment Industry in Details

How to Calculate CMT in the Garment Industry in Details

CMT is a common costing method. It is the cost of manufacturing a piece of garments. The basic steps of CMT calculation are broken down for your convenience:

  1. Calculate the Cost of Cutting: Firstly, find out the cost per unit of the fabric used in the production of each garment. Secondly, find out the cost of labor in cutting the garment. You have to multiply the units to get the cutting cost.
  2. Calculate the Cost of Making: This covers the price of cutting and putting the garment together. Multiply the hourly labor rate by the amount of time needed to create one garment. Add any other costs associated with each garment, such as factory upkeep, equipment depreciation, and utilities.
  3. Calculate the Cost of Trimming: Under this head, you have to calculate the trimming and accessories cost. It includes the cost of labels, buttons, zippers, and other relevant accessories. The next step is finding out the labor cost for trimming. Find the per unit labor cost for adding trims and other required finishing touches.
  4. Calculate the Total CMT Cost: It is the final step. You have to add the cutting, making, and trimming costs. The formula of CMT is simple.
    CMT = Cutting cost + Sewing cost + Trimming cost

Example of CMT Calculation

Let’s assume that it’s required to find the Cut, Make, and Trim charge of a slot of turtle neck t-shirts. The dimensional details are stated below:

  • No. of Pieces= 4000
  • Salary of operator = 90$/month (1$ = Tk. 118)
  • No. of working days = 26
  • Line efficiency considered = 60%
  • Sewing SAM = 7min
  • Cutting SAM = 4min
  • Chest = 60cm,
  • Length (HSP to waist) = 60 cm,
  • Sleeve length = 20 cm
  • The fabric used is 2/60s 100% cotton S/J fabric.
  • GSM is 170gm

Hence, Fabric Consumption
= [{(B.L +S.L + 4-10 cm) × (½ chest+ 2-4 cm) ×2} ×GSM] / 10000000
= [{(60+20 + 4) × (60+ 2) ×2} ×170] / 10000000
= 0.177 + Wastage 10% [Considering 10% wastage]
= 0.195kg/dozen
Labor cost per minute = monthly salary of an operator / Actual minute worked in the month
=10620/ (26×8×60)
= Tk. 0.85

Cutting Cost = Cutting Sam of the garment * labor cost per minute/line efficiency
= 4*0.85/60%
=Tk.5.67

Sewing cost = Sewing Sam of the garment * Labor cost per minute/Line efficiency
=7*0.85/60%
=Tk. 9.92

Trimming cost = Trimming Sam of the garment* Labor cost per minute/Line efficiency

Let’s assume the trimming cost is Tk.4 as it depends on the number of line operators in trimming.

Therefore, CMT Charges = Cutting cost + Sewing cost + Trimming cost
= Tk. 5.67 + Tk. 9.92 + Tk. 4
= Tk. 19.59
= 19.59/117
= 0.17$

Learn More: How to Design a Clothing Line

Conclusion

CMT calculation is quite easy. You just have to follow the steps precisely. Since you are on a mission to make your garment factory a success, you can check out these two guides, how to reduce WIP in the garment manufacturing industry and 15 ways to improve productivity in garment production.

Hopefully, this guide on how to calculate CMT in the garment industry will give you good results!