500 school shirts in six weeks with one old overlock machine
A registered women's tailoring collective of 12 members wins its first large order: 500 school shirts in six weeks at a price quoted per shirt, with 30% advance and the balance on delivery. Fabric and thread must be bought before stitching starts and will consume about 60% of the order value. Nine members can stitch two shirts in a six-hour day; three members with childcare duties can manage only one. Two members cut, one inspects, and there is a single overlock machine that must finish every shirt before inspection; the machine is 12 years old and its spare-part supplier is two weeks away by order. Six-day working weeks are normal, but a local festival and a likely three-day power failure reduce usable days to about 30. The collective's savings cover only half the fabric advance; members are reluctant to pledge personal savings; the school will reject shirts with uneven collars or broken stitching.
1. Calculate whether the order is feasible and recommend accept, negotiate or decline. Show your capacity arithmetic and assumptions.
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Capacity
- Nine members × 2 shirts = 18; three members × 1 = 3; total 21 shirts per working day.
- Usable days: six weeks × 6 = 36, less festival (about 4) and power failure (3) = about 30. 30 × 21 = 630 shirts.
- Order is 500, so the paper buffer is about 26%.
Other stages: two cutters can cut far more than 21 a day with stacked patterns, and one inspector at roughly 50 shirts a day is not the bottleneck. The overlock is the single point of failure: at about 30 shirts a day it needs 17 days, which fits only if it never stops.
Recommendation: accept, but conditionally. The arithmetic works on paper and fails on one breakdown. Conditions before the fabric is cut: (1) overlock serviced, known wear parts bought, and a workshop within a day's travel identified for the same model; (2) a written daily target of 18–21 shirts and a visible chart; (3) the three members on four-hour days given the simpler operations - side seams and hemming - rather than collars, so the slowest members do not sit at the quality-critical step.
Caveat: 630 is a paper figure. Plan to have 250 shirts finished by the end of week 3, or the 26% buffer has already disappeared.
2. Work out the cash-flow and pricing implications and propose the terms you would negotiate.
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Cash flow: fabric and thread are 60% of order value, payable before stitching; the advance is 30%. The collective is therefore 30% of order value short at the start, before any wages. If savings cover half of that, the gap is 15% of order value - small in absolute terms but it lands in week 1, when revenue is zero.
Options, in order:
- Renegotiate the advance to 50%, offering a signed delivery schedule and a school inspection at 50% completion. The school has a budget line and wants the shirts; a first-time supplier is entitled to ask.
- Ask the fabric supplier for 30 days' credit against the order letter - usually cheaper than members' savings.
- Split delivery into 250 + 250, so the first balance payment funds the second lot.
- Only then ask members to pledge, in writing, with an agreed repayment order.
Pricing check: the quoted price must cover fabric, thread, the overlock overhaul, power back-up, inspection time, and rejects at 3–5%. At 5% rejects that is 25 shirts the collective absorbs. If the price does not cover them, the order is a loss leader at best. Say so plainly: do not cut the price to win the first order, because a school order at a loss sets the reference price for the next one - and the collective's real asset after this job is a reference, not a margin.
3. Identify the three biggest production risks and the control you would put on each.
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- Overlock breakdown. It is the only machine of its kind and every shirt must pass it. Controls: full service before cutting; known wear parts bought now; a named back-up workshop; run at about 80% of rated speed; keep 50 cut shirts buffered ahead of the overlock, not after it.
- Quality rejects at collars and stitching. Controls: one standard sample shirt signed off by the school before bulk cutting; the cutters check the first ten of every batch; the inspector uses the same checklist on every shirt; every member's initials inside the garment so faults can be traced and corrected with the person, not the group; pay not purely by piece, so speed does not beat quality.
- Lost days from power failure and the festival. Controls: plan to 21 a day, not 25; front-load 60% of production into the first three weeks; a treadle or hand-driven machine as back-up for final seams; a written delivery date with a two-day margin.
Add one management control: a simple register - fabric in, shirts out, rejects, hours per member. Without it the next order is priced blind, the slow steps stay invisible, and the collective cannot prove to a future buyer that it delivers on time.