Lessons · Lesson 3 of 6

What it costs, and what gets budgeted

Why the only line with a quotation on it is the smallest one, where the hours actually go, and how to price the work of digitising assets you already own.

Lesson 3 of 6 · 18 min

Three lines, signed in ten minutes

The budget Bezirhan's owner approved had three lines: seats, a training course, and a workstation refresh. It was signed quickly, and for a good reason. Every line on it had a quotation attached. Somebody outside the company had put a number on each one, in writing, with a date.

The year that followed had seven lines. Six of them had no quotation, no invoice and no owner. They were hours.

The seven lines, in the only unit that matters

Where the hours went	Hours
Rebuilding 38 blocks from measured garments	539.6
Characterising 26 fabrics	176.8
Colour and display discipline	61.0
Training, nine people	198.0
The productivity trough on the first 24 styles	273.6
Running both processes through the pilot	168.0
Writing the procedure and agreeing it with Wraysbury	96.0
Total	1,513.0

Bezirhan's first year of digital product creation, in its own people's hours

That is most of a person-year, and not one of those hours appeared in the approved budget. Hours a company already pays for do not look like spending. They are spending. They are the most expensive thing in the building. The only reason they feel free is that nobody sends you an invoice for them.

Why this course prints no licence price

You will notice a number that is not here. What Bezirhan pays for four seats and a workstation refresh is a figure negotiated between one factory and one supplier. Printed in a course it would be read as a going rate, by a reader with a different scope, a different country and a different negotiating position, next season. So the licence line appears only as a proportion, which is the part that travels:

Line	Multiple
Licence and hardware	1.00
Bezirhan's own people's hours	9.40
Lab fees, measurement services and test cuts	1.90
Travel, and hosting Wraysbury's technologist	0.90
The year	13.20

Bezirhan's first year, in multiples of the licence and hardware line

The line the whole budget was written around was 7.6% of what the year cost. Every conversation about this programme, for four months, was about the 7.6%.

That leads to a practical negotiating instruction. Winning a fifth off the licence changes the year by 1.52%. Getting a fifth off the block work changes it by 5.08%, which is 3.35 times as much. And the block work is entirely inside your building. You negotiate it with nobody, and you improve it by method rather than by asking.

The largest line is work on assets you already own

Rebuilding the blocks was 35.7% of the hours. The plan had costed it at 2.5 hours a block, which is roughly what it takes to scan and clean a pattern. So 95.0 hours were budgeted against 539.6 spent, 5.68 times the estimate. The 444.6-hour difference is 29.4% of the whole programme, sitting inside a single line that nobody costed.

Here is where a block's 14.2 hours actually go:

Activity	Hours
Measuring a sewn garment made from the block	3.1
Reconciling what the garment says against what the card says	2.4
Re-deriving the grade rule across the size range	4.2
A test cut and a fitting to prove the rebuilt block	3.5
Recording it so the next person does not do this again	1.0

Rebuilding one block, by activity

Everybody was right, and the bill was still fourteen hours a block

No one at Bezirhan did anything wrong with those blocks. A pattern master amends a block on the table because that is how a block gets good: a millimetre off an armhole, a scoop deepened after a fitting. The amendment goes onto the card, and the card is the record. It really is the record, and it is a completely sufficient one for as long as the person who made it is in the building. Nobody wrote a second record because a second one had no purpose. So digitising a block is not tracing it. It is re-deriving a specification that exists only as an object. That needs a measured garment, a fitting, and a decision about which of three near-identical cards is the live one. Fourteen hours, thirty-eight times, for work on assets the factory already owned and believed were finished.

The trough, which is real and is budgeted nowhere

The first styles through a new process are slower than the old process. Bezirhan measured that rather than arguing about it. The first 24 styles took extra hours, and the extra fell away like this.

Styles	Extra hours each
1 to 4	24.8
5 to 8	17.2
9 to 12	12.0
13 to 16	7.8
17 to 20	4.2
21 to 24	2.4

Extra hours per style, in blocks of four styles

The average is 11.4 hours a style, and the total is the 273.6 hours in the first table. By styles 21 to 24 the penalty is 9.7% of what it was on the first four. That is the whole shape of the thing. The trough is deep, it is short, and it is survivable if you said it was coming. A programme that promises a saving in month one and delivers a penalty in month two loses the room, and the room is harder to get back than the hours.

Check yourselfYour supplier offers a 25% discount if you sign this quarter. Using Bezirhan's proportions, what is that worth, and what should you ask for instead?Show the answer

A quarter off a line worth 1.00 of 13.20 is 1.89% of the first year. That is real money, and it is not the thing to spend your one favour on. Ask instead for what reduces the 9.40: a specialist to sit with your pattern room for two weeks on the grade rules, a template for your procedure document, or the measurement of your top fabrics as part of the deal. Those come out of the biggest line. Unlike the discount, they leave something behind that keeps working in year two.

What to take away

The only line with a quotation is the smallest one. Bezirhan's licence and hardware was 7.6% of the year.
The unit of a digital programme is hours, and hours you already pay for are still spending.
Rebuilding blocks was 35.7% of the hours and had been costed at scanning speed, off by 5.68 times.
Digitising a block is re-deriving a specification that exists only as an object. Fourteen hours, and nobody did anything wrong.
The productivity trough is real, deep, short and survivable, if it was announced before it arrived.
A fifth off the block work is worth 3.35 times a fifth off the licence, and you can get it without asking anybody.