Material at the subcontractor: counting stock outside your walls

Fabric sent to a subcontractor is still your stock in the records, but it is no longer in the warehouse. During a count this material becomes invisible: it is on no rack and nobody questions it on paper. Small differences that build up there can turn into a large figure over time. This article shows how to count material outside your warehouse and compare it with the record.

Three places, three people responsible

After leaving the warehouse, fabric usually sits in one of three places:

• on your own cutting table;
• in your own workshop (sewing, pressing, packing);
• at the subcontractor's premises.

Each place has its own person in charge, and the material waits there as rolls, bundles of cut pieces or semi-finished garments. For example, 400 metres of fabric waiting on the cutting table have been issued to production against a slip but not yet cut; once cutting is done, part becomes bundles of pieces and part becomes remnants. If these conversions are not followed in the records, the material seems to vanish on count day. The count must treat these places one by one; a single line "at the subcontractor" is not enough.

What should be at the subcontractor

The balance held at a subcontractor can be calculated from the records:

Sent − consumption for finished goods received − remnants returned = what should remain at the subcontractor

An illustrative case: 3,000 metres of fabric were sent for sewing. In return 2,400 shirts were received; at 1.2 metres per shirt, 2,880 metres count as used. The subcontractor returned 40 metres of remnants. What should remain: 3,000 − 2,880 − 40 = 80 metres. The count found 55 metres: a difference of 25 metres, about 0.8 per cent of the quantity sent. The figure is small, but unless it is questioned it grows a little with every lot.

The consumption per garment is taken from the cutting plan or from the actual use in the first lot, and it must be updated when the model, the fabric width or the marker layout changes. An out-of-date figure makes the "should be there" quantity wrong from the start.

How the count at the subcontractor runs

1. The subcontractor is told in advance, and the count day and hour are agreed with them.
2. The count is joint: your representative on one side, the subcontractor's authorised person on the other.
3. Material is counted separately by lot and colour code; bundles of cut pieces are recorded by the number of bundles and the pieces in each.
4. Semi-finished items (sewn but not finished) go on a separate line, noting the stage they have reached. If 12 bundles × 50 pieces = 600 cut pieces are counted, write separately how many have been sewn and how many are still in the bundle.
5. The result is written into a report signed by both sides.

This count is compared with the issue slips, the receipt documents and the consumption table. The difference becomes a separate line under the heading "subcontractor".

Paperwork

If the following three documents are kept in order, the balance at the subcontractor can be seen at any moment:

• the dispatch slip (which lot, how many metres, which date);
• the receipt slip (how many finished items, how many metres of remnants);
• a monthly reconciliation, signed together with the subcontractor, showing what was sent, what was received and what remains.

A written reconciliation makes it easier to settle any later dispute over remaining material. How responsibility is shared should itself be written in your contract.

Common mistakes

• Working from an old consumption-per-garment table without updating it; when the model changes, consumption changes too.
• Leaving waste and unreturned cutting remnants out of the calculation; if the consumption table does not include waste, the difference is artificially inflated.
• Mixing your material with another customer's material at the subcontractor; each lot should be marked separately where it stands.
• Counting a finished but not yet received garment twice, as material at the subcontractor and as finished goods in the warehouse.
• Reconciling once a year; the difference builds up for months and its source is lost.
• Relying on the subcontractor's own statement of the balance; a reconciliation signed without a joint count proves nothing.

In short

Material at a subcontractor is stock outside your warehouse but inside your records, and it belongs in the count. StockSystem counts material waiting on the cutting table, in the workshop or at a subcontractor and compares it with the issue slips; if the subcontractor's site has to be visited, that scope is written into the quote separately.