1Using your completed BOM (Bill of Materials) calculate all product costs on a per-unit basis. Using the cost sheet template, be sure to include the following in your cost sheets:
Fabric or Raw Materials: Calculate total costs for each line item. You will need to estimate fabric consumption, but quotes should come directly from the mill or industry contacts.
Components, Labels, and Packaging: For each of the three items in your product line, use the BOM for that item and copy all materials, components, labels, packaging, and packing items from the tech-pack sheets to the appropriate sections of your cost worksheet. Insert new rows in the spreadsheet where needed. Eliminate any blank cells. When complete, you should have one cost sheet for each item in your product line for each country.
Labor: In the country list in the Course Project Overview, the corresponding SAM is includedthe cost per minute for manufacturing your type of product in that particular country. Based on the style number chosen, your professor will provide you with the number of minutes it takes to manufacture it. Calculations for cutting (10 percent of total sew), grading, marking, and patternmaking (1 percent each of sew) will be automatically generated. However, as mentioned before, the integrity of the information is yours. Formulas are incorporated to facilitate the process.
Packing: Identify the size box (carton) that your distribution center will accept to maximize the number of units you can ship from the manufacturer that will result in the least freight costs for the maximum number of units. The size is usually limited by the type of equipment the distribution center has, the number of pounds personnel can carryusually 50 lbs.and how easily the cartons can be handled. Costs for tape and labels are already incorporated into the cost sheet. Include costs for straps, if necessary.
e Duty: Based on the country, identify all applicable duties, and calculate these for your product..
f Transportation: Based on the country, identify the mode of transportation to get the product to its final port destination. Determine transportation costs based on the number of units you will be shipping. For example, if your factory delivers your shipment container of mens slacks to a Chinese port, youll need to do the following:
1-Determine the total cost to transport this container to the final destination port.
2-Determine how many units will fit in that container (based on the number of cartons that can fit in the container and the number of units that fit in each carton) to work out the cost per unit.
See the following calculator links to obtain this amount, or you can obtain it from the freight company. Either way, you must have the carton size in which youll be shipping the product as well as the weight per garment.
CBM Calculator for Shipping:
g Broker: If your company doesnt have its own customs department, youll need to hire a customs broker per shipment. Research the costs of a customs broker, and divide by the number of units youll be shipping in the container. You will then have the cost per unit; the formula is already built into the cost sheet.
H Insurance: If your shipping carrier doesnt insure the container, or if your company doesnt carry a comprehensive insurance policy, youll have to buy separate insurance. Research these costs, and divide by product volume to translate this expense into cost per unit. The formula is built into the cost sheet.
Verify that your cost sheet information is complete and accurate. Take particular care to ensure that your duty costs are correct and current.
Bill of materials and corresponding references must accompany cost sheets at time of submission. Please create one PDF that incorporates all items.
Before starting on the preliminary placement, your group must develop a cost sheet for each country your team has researched. Collect all cost sheets, and save them as a single PDF document.
Note that the accuracy and integrity of costs are paramount to the validity and viability of the sourcing strategy and ultimately the supply chain strategy. Costs will determine whether youre going to make the required margins. If inaccurate, it can be devastating.