How to Reduce Cost per Minute (CPM) in a factory

 

What is CPM:

CPM Means total cost incurred per minute for a production line, a section and full floor. CPM stands for Cost Per Minute.

We have learned how to calculate CPM in details earlier. How to reduce cost per minute will discuss today. Before learning reduction method, read first how to calculate it.

The equation to calculate CPM is - 

 

CPM = Total Actual Salary of a Day of a line/( Total garments produced of that day Х Garments SMV )

There are three parameters required to find CPM. Among those product SMV and  Total Actual Salary of a Day will remain same. So to reduce the CPM, need to increase-

·        The production within the planned working hour.

·        Achieve efficiency more than plan

 For example, 32 manpower produced 600 pcs garments in a day with 75% efficiency. SMV of that garments is 20.98 min. If Total one day salary of that production line is 14700 TK then,

CPM = 14700/( 600 Х 20.98 )

          = 1.17 Taka

 

But if that line produce 680 pcs garments at 85% efficiency then definitely CPM will be reduce. When garments SMV is 20.98 and Paid salary is 14700 tk then ,

CPM = 14700/( 680 Х 20.98 )

          = 1.03 Taka

Comparison of Both Example:

How to Reduce CPM

From the above example, we can say by increasing production 80 pcs and efficiency from 75% to 85%, we can reduce cost per minute from 1.17 Taka to 1.03 Taka. That means 0.14 Taka cost reduced per standerd minute here. Read how to Improve Productivity in 20 Ways to increase efficiency.

Read also: Define Takt Time. Use of Takt Time in Apperal Industry.