Take-back is a different business, and the freight is the argument

The ask

In November, Brandhoek asks Sekhiri a question. It sounds like more of the work they already do. We are opening take-back bins in our stores. Worn BR-4290 jackets come back, and we would like you to repair and re-finish them for our resale rail. Volume around 3,400 a year.

It sounds like the same work. It is a different business. The difference is not in the sewing.

Sekhiri ran a pilot on 400 units before answering. That is the only reason the numbers below exist. Every unit was inspected and every outcome written down.

• 44% need a small repair — a seam, a bar tack, a label sewn back on.
• 18% need a part replaced. In practice that means a zip.
• 38% cannot be brought back to a saleable standard at all.

So out of 3,400 jackets, 2,108 become saleable and 1,292 do not. All 3,400 still have to be freighted, received and inspected before anybody knows which is which.

Repair minutes are not make minutes

Making a BR-4290 takes 21.8 standard minutes on a balanced line of 34 operators. A standard minute is the time a trained operator needs to do one step at a normal pace. Sekhiri's loaded cost is EUR 0.058 a minute. On this order the line runs at 78% efficiency. So a standard minute really costs EUR 0.0744, and sewing one jacket costs EUR 1.62.

Repair does not run on that line, and it cannot. It is a batch of one. Every garment is a different problem. The operator sets up again for each one. Nobody is rated on the work. Sekhiri measured the repair cell at 41%. That puts a standard minute at EUR 0.1415 — nearly double.

Read the last two rows together. Replacing a zip is 88.5% of the work of making a whole new jacket, and it costs 1.69 times as much. The reason is the efficiency, not the minutes. That one comparison is what separates repair from manufacture as a business. Anybody who prices repair by counting minutes will never see it.

The unpicking is where the cost hides. Nobody has a standard minute value for taking a garment apart. No factory has ever needed one. It is not in the SMV database. It changes with how well the garment was made in the first place. And it is 7.9 of the 19.3 minutes.

triage, all 3,400 units × 0.88   =  EUR  2,992.00
minor repair, 1,496     × 1.15   =  EUR  1,720.40
zip replacement,  612   × 2.73   =  EUR  1,670.76
                          labour =  EUR  6,383.16
                over 2,108 units =  EUR      3.03 a saleable jacket

The line that actually decides it

Now the freight. On a normal order the freight is somebody else's cost, so nobody at the factory prices it.

The jackets go out to Rotterdam on pallets in a container at EUR 0.31 a kilogram. They come back as 44 small consignments over the year, collected from stores, at groupage rates of EUR 4.85 a kilogram. That is 15.65 times the outbound rate. Return freight is priced per consignment, and a take-back stream arrives in ones and twos by definition.

3,400 jackets × 0.92 kg gross      =  3,128.0 kg
                        × EUR 4.85 =  EUR 15,170.80
                    over 2,108     =  EUR      7.20 a saleable jacket

The freight is 2.38 times the labour. Put the two together. A repaired BR-4290 costs 3.03 + 7.20 = EUR 10.23 before it is re-labelled, packed or shipped back. That is 89.7% of the EUR 11.40 it costs to make a brand new one — for a garment that will sell at a discount.

And a question that is not yours to answer

There is a fourth number, and it is not a number. Three thousand four hundred used garments crossing a border are either goods or waste. Which one they are is decided by the importing country's own law. It is not decided by what anybody in this story calls them. If they are waste, their movement falls under an international control system built on prior informed consent. The consignment then needs the agreement of the authorities at both ends before it moves at all.

Settle that question before the first bin goes into a store. It does not change the cost of the programme. It decides whether the programme is lawful. Your job here is not to answer it. Your job is to make sure somebody with authority answers it in writing, and to say plainly that the answer is a condition of the quote.

What Sekhiri said instead

The pilot's arithmetic points somewhere specific. The freight is the whole argument, and freight is a function of distance. So repair belongs near the wearer.

Sekhiri priced that version too. A repairer in the Netherlands works at EUR 0.32 a minute — 5.5 times Sekhiri's loaded rate. The same operations cost EUR 1.98, EUR 2.59 and EUR 6.18. Add a trim kit supplied by Sekhiri at EUR 0.62 a repair, and the in-market total is EUR 7.45 a saleable jacket, against EUR 10.23 in Sfax. The dearest labour in the comparison wins by EUR 2.78, because it does not move the garment.

So Sekhiri's answer was not no. It was this: we will not do the repairs, and we will sell you what makes them possible. That means the operation breakdown, the tolerances, the thread shade card and a trim kit per style, quoted as its own line. That is a real business. It uses what a factory actually knows. And it does not put a container of used jackets on a road.

Act as an industrial engineer and a freight forwarder at the same time, and let the two of you argue. A buyer has asked my factory to take garments back and repair them, and I have to answer. The proposal: [PASTE IT]. Volume [UNITS A YEAR], garment [STYLE AND DESCRIPTION], gross weight packed [KG], where the goods come from [COUNTRY AND HOW THEY WILL BE COLLECTED], where my factory is [PLACE]. My factory: SMV to make the garment [MINUTES], loaded cost a minute [AMOUNT], line efficiency on a normal order [PERCENT], the efficiency I would expect on a batch of one [PERCENT, OR TELL ME TO MEASURE IT], FOB of a new garment [PRICE]. Do the following. First, refuse to cost anything until I have given you an inspection pilot. Tell me how many units to inspect and what to record. Make the beyond-repair share a MEASURED number rather than an estimate. Second, cost triage on EVERY unit received. Show me separately how much of that is spent on units that turn out to be unsaleable. Third, cost each repair operation at the repair cell's efficiency, not the line's. Make me put a standard minute value on UNPICKING, which is not in anyone's database. Fourth, put the cost of the commonest repair beside the cost of making a new garment, in minutes and in money, and tell me which is bigger. Fifth, cost the return freight in the consignment sizes the goods will really arrive in, and compare it per kilogram with my outbound rate. Sixth, tell me whether the goods crossing the border will be treated as goods or as waste. Say plainly that you cannot answer that and that a customs broker must. Then write the one sentence I should put in my quote making the answer a condition. Seventh, cost the same programme with the repair done in the buyer's market instead, at that market's labour rate, and tell me which wins and by how much a saleable unit.