Raw Material Prices continue to Rise How should Textile Factory Respond?

March 23, 2021

Affected by factors such as tight international relations, the price of raw materials has rised. The pressure from the upstream "price increase" is transmitted to the downstream industries and has varying degrees of impact. The textile factory is deeply "trapped" in it.

With the rising trend of raw materials, price competition has become a necessity. Therefore, who can produce excellent products at a lower cost to participate in market competition, and win by quality and price can be invincible in the fierce market competition. If the textile industry wants to solve its predicament and maintain its survival and development, it must try its best to reduce costs.

In order to reduce costs, it is necessary to be clear about the composition that affects the cost of the textile factory:

The classification that affects the cost of textile factory:

1. Production cost;

2. Business operating costs;

Production costs,including direct materials, direct labor, and direct expenses consumed during the production process;

Enterprise operating costs,include management expenses, financial expenses, operating expenses and non-operating expenses incurred during the operation of the enterprise.

Production costs account for the largest proportion of the entire company's operations, and there are many controllable factors, which are an important part of the company's cost control.

The production cost of the textile factory includes:

1. Raw material cost

It refers to the various raw materials and main materials that are processed to form the product entity. The raw material in the textile factory is mainly cotton yarn, which accounts for about 63.42% of the production cost. It is the key to cost management. Detailed management indicators should be formulated and strictly controlled.

2. Cost of accessories

Refers to various auxiliary materials (consisting of paste dye + machine materials, etc.) that are directly used in product production and contribute to product formation, but do not constitute the product entity.

3. Energy cost

Refers to the energy directly consumed in the production process. Energy costs mainly include: electricity cost, steam cost, natural gas cost, water, etc. Whether the configuration of various high energy consumption is reasonable, whether the equipment efficiency reaches the best effect, and whether the steam pipe network is intact or not are all important factors that affect energy consumption.

4. Labor cost

Refers to the labor consumed by the production workshop to directly process materials into products. The labor cost of the textile mill accounts for 11.60% of the production cost. In recent years, the labor cost in the textile industry has been increasing.

5. Manufacturing expenses

Refers to the various public expenses incurred by each production unit (workshop) of the enterprise for organizing and managing production. Its main contents include: related expenses of workshop management personnel, office expenses, water and electricity expenses, labor protection expenses, depreciation expenses, repair expenses, etc.

How should textile factories reduce production costs?

1. Raw material cost analysis and countermeasures

(1) Control purchase cost.

The first step to control the cost of raw materials is in the procurement process, and the corporate procurement management system should be improved and standardized.

The cost of raw materials of an enterprise is composed of price and consumption. Effectively reducing purchase prices is a direct and important way to reduce costs.

How to do?

1.It is necessary to improve the professional level of procurement personnel in grasping market information, make accurate judgments on market opportunities, and grasp the most favorable market opportunities for procurement;

2. In the procurement process, it is necessary to allocate high-quality and professional auditors, and establish a standardized price comparison procurement system.

(2) Explore process innovation.

Strengthen the training of the professional ability of factory technicians, encourage them to dare to innovate and practice boldly, and achieve a win-win situation of high quality, novelty and low cost in the process.

For example, to improve the sizing quality of cotton woven warp yarns, the sizing process can be improved. After the improved process, the abrasion resistance of the sizing is improved, the number of hairiness is reduced, the efficiency of the loom is improved, and the cost of sizing and drying are saved.

2. Energy consumption cost analysis and countermeasures

Textile factory are large energy consumers. Reducing energy consumption is not only beneficial to the country, but also beneficial to enterprises and individuals, and is the foundation of sustainable development of enterprises.

From the perspective of the production chain of enterprises, the textile factory has the characteristics of large scale, complex process flow, and complete automation of production equipment. Therefore, water, electricity, natural gas, steam and other energy consumption account for about 7% to 8% of production costs;

For example, the main energy consumption of the two key links of the flake dyeing machine and the rope dyeing machine is steam, and the main energy consumption of the weaving and desizing and mercerizing process is electricity.

It is particularly important to find energy-saving space from the energy consumption of key links.

As an important part of energy output, boilers provide important steam support for the textile industry.

Choosing a good boiler can save energy costs in the four dimensions of fuel cost, labor cost, maintenance cost, and time cost.

Fuel cost

1. Equipped with well-known brand burners, which can make the fuel burn 100%;

2. Adopting the most advanced boiler structure—three-pass structure, large-diameter corrugated furnace bladder and double threaded flue pipes inside and outside, which increase the heat exchange efficiency of the boiler.

3. The use of special materials such as aluminum silicate fiber and aluminum foil as the thermal insulation material of the boiler effectively reduces the heat loss by 2% to 3%.

4. Equipped with high-efficiency energy-saving equipment such as finned tube economizer, the temperature can be lowered to 110℃. It can also be equipped with a condensation recovery device to recover the latent heat of gaseous water in the flue gas. The thermal efficiency of the boiler system can reach more than 102%.

Labor costs

Equipped with PLC or DCS electronic control to realize artificial intelligence, allowing the boiler to control and adjust itself, saving labor costs.

Maintenance costs

Provide professional technical guidance and training to furnace workers, provide you with annual inspection services, eliminate potential failures, extend the service life of auxiliary machines and accessories, and save maintenance costs.

Time cost

Using advanced technology and remotely monitoring the boiler can also give you (manager or operator) more peace of mind, so that you will have more time to consider other things.

Reasonably configure existing equipment, reorganize or eliminate old equipment with high energy consumption, introduce new equipment, increase product added value, shorten working hours, reduce product unit cost from energy consumption and labor, and enhance product market competitiveness.

3. Direct labor cost analysis and countermeasures

As a typical labor-intensive enterprise, reducing enterprise employment is the most important topic in the development of the textile industry to this day. In addition to the introduction of advanced equipment and technology, textile enterprises can improve production efficiency. Non-production jobs are reduced. The "machine substitution" project is a good choice for textile companies. Companies can save costs through intelligent and automated production, eliminating redundant labor.

Conclusion

The rise in the price of raw materials is a common phenomenon. How to increase the profit space in the general environment is a question that every textile factory should think about. I hope this article can give some inspiration to the operators of the textile industry. If you want to further reduce costs in terms of energy consumption, Welcome to consult EPCB, we will provide you with relevant technical consulting support free of charge.