Open Costing That Survives Negotiation
Most costing arguments are not about price. They are about two parties using different definitions of the same number. An open cost sheet ends that by showing consumption, wastage, standard minutes and overhead separately, each with the assumption written beside it.
Separate the four cost families
A garment cost is materials, cut-make-trim, commercial cost and margin. Collapsing them into a single FOB figure is what makes negotiation a bluffing contest. When each family is visible, the conversation moves to the one line that is genuinely different between the two estimates.
Materials should always show consumption, price per unit and wastage as three separate fields. A merchandiser who quotes 1.62 metres at 3.10 with 6 percent wastage can be checked; one who quotes a fabric cost cannot.
- Materials: fabric, trims, packaging — consumption × price × (1 + wastage)
- CM: standard minutes × minute cost, stated at a named efficiency
- Commercial: testing, inspection, freight, finance and compliance cost
- Margin: stated as a percentage, not hidden inside CM
Fix the minute cost before the style
Cost per standard minute is a factory constant, not a per-order negotiation. Calculate it once from annual conversion cost divided by productive minutes available, then apply it to every style. Factories that re-derive the minute cost per order end up subsidising difficult styles with easy ones and never learn which orders lose money.
State the efficiency assumption on the sheet. A 22-minute garment at 50 percent efficiency and at 65 percent efficiency are two different prices, and the difference belongs to whoever controls the line, not to the buyer.
Cost the wastage you actually have
Marker efficiency, end-of-roll loss, shade rejection and sewing rejects are all real and all measurable. Use last season's actual figures per fabric family instead of a flat allowance. A blanket 5 percent hides a 12 percent problem in stripes and overcharges on plain knits.
Reconcile quoted against actual
After shipment, put the quoted sheet next to the actual consumption, actual minutes and actual reject rate. The variance report is the only mechanism that turns costing from an estimate into a learning system. Three seasons of reconciliation removes most of the padding on both sides of the table.
- Compare quoted vs actual consumption per size ratio
- Track achieved efficiency against the quoted assumption
- Attribute variance to a cause, not to the merchandiser
More field notes
- AQL Sampling in Practice: Garment Quality Control Done Right
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- Digital Traceability: The First 90 Days
A realistic rollout sequence for material traceability, from PO mapping to shop-floor scanning discipline.
- Lean Manufacturing Without Layoffs: Balanced Sewing Lines
Lean manufacturing in apparel: how line balancing, takt time and WIP control raise output while protecting operators — with the metrics that prove it.