As your sales continue to grow, you approach a point where you reach capacity on your existing embroidery equipment. You now realize that you need more capacity to handle the volume and maintain quick turn times on your customer’s orders. It may be the right time to commit resources to adding one or more heads to your embroidery operation.
Let’s explore several points we should consider at this juncture:
1) Are we at embroidery machine capacity?
Are we using the machine efficiently? As you know, the embroidery process is a multi-tasking process, but also a synergistic process. By this, I mean that not only is the work performed in scattered segments (i.e. set up machine, hooping, unload/load, finishing, etc.) but also performed around “machine running time”. We bounce from task to task as needed while we focus on keeping the machine running almost continuously. A good rule of thumb for embroidery is my 50% rule. This rule says that your production yield should be at least 50% of the running speed of the machine. For example, if your sewing speed is 800 stitches per minute (s.p.m.), your output should average 400 s.p.m. On the AMAYA or EMT16, when your sewing speed is 1200 s.p.m., your output should average 600 s.p.m. So, a design with 12,000 stitches should take no more than 20 minutes per run including downtime and handling. (Actual raw sew time will be 12,000/1,200 s.p.m or 10 minutes).
If your orders are all one piece per order, this 20-minute average number may take a little longer and if the orders are multiple pieces, the 20-minute average number could be less. The bottom line here is, if you are reaching these numbers, you are probably at your machine capacity. If so, now may be the time to consider adding more embroidery heads.
2) What are the options for excessive capacity?
The first obvious option to handle this excess might be to run an additional shift and get more running time out of the day. These machines (if properly maintained and lubricated) are designed to run continuously. If you choose to run extended hours, you will probably need an additional trained operator to fill the shift. Another obvious concern is whether the business is in the home or at a remote location. Is a second shift practical in your home or are there any security issues at a remote location? If these concerns can be addressed, additional hours or shifts can be a practical solution to short-term excesses in capacity.
Another short-term option might be to use a contractor to handle surges. One negative point might be the additional cost (at wholesale pricing), which may leave you with a tighter margin. On the other hand, a positive offset is that you rent them as you need them. If you send them your larger quantity orders, your wholesale price may even be less than your cost to run that order on your own machine.
Make sure you still maintain a profit margin for handling the order for your customer. Don’t feel uncomfortable about farming out some work. It’s just prudent management. Make sure you inspect the work to ensure it meets your standards and DO NOT allow drop ships from the contractor directly to your customer.
3) Can we calculate projected production needs?
Yes, planning your production capacity is simply a matter of capturing your past performance. To do this, you can make up a simple production report that records each job produced with the number of stitches and number of runs, per job. At the end of the day, you simply total all of the stitches produced and divide by the number of available work minutes. For example: first, you total the number of stitches produced in one day and let’s say it comes to 240,000 stitches. Next, you divide by 480 minutes (the number of minutes in 8 hours). Your result shows that you averaged 500 s.p.m. for that production day. Continue to track this figure to see if it is consistent or whether it fluctuates over time. You will find that higher stitch counts in a design and multiple runs of the same design, per order, will yield higher s.p.m. Lower stitch count designs and single piece orders will yield lower figures.
You can also use this production report to flag problematic jobs and re-negotiate profitable pricing on future runs.
After you have tracked production over a period of time, you now have the magic number that can be used to calculate machine capacity. For example, if your unique s.p.m. becomes 400 over the time studied, you can reasonably project that your production capacity is 192,000 stitches per head, per day. If your average job has 10,000 stitches, then your capacity is 19.2 pieces per head, per day
Using the guidelines above, you can quickly determine your current capacity and determine your production needs. If you are satisfied with your current efficiency and the demand is growing and consistent, it is probably the right time to invest in additional equipment.
Another factor to consider is the age of your equipment. Although these machines are designed and built to perform for many years of heavy production, at some point in time, obsolescence can become an issue. At some point in time, replacement parts may become difficult to find, and the frequency of repair visits may become cost prohibitive. We all want to get the most out of our capital investments, but we have to be sensitive to the concept of “useful life”. Everything has a “useful life”. Our pricing should recover our machine depreciation which means that our customers are paying for our machines over time. This should allow us the funding (or available credit) to upgrade our machines every so many years.