How to Convert SAM Value to Dollars in Garments Production?

Time is money. Every operation has monetary value. The SAM (Standard Allowed Minute) has specific monetary values. We can easily convert this minute value to any monetary value using techniques and formulas.

 

To convert SAM to Dollar, we have to know first regarding following things:

✔ What is SAM?

✔ What is Hourly Rate for Operators

✔ Calculation of Hourly Rate of an Operation

SAM is Standard Minute Value. It is time to perform a job in a standard way with specific criteria.

SAM can be obtained by PMTS or by direct Time Study. This article, let say we know the SAM of the garment.

Hourly Rate for Operators: It is calculated from the calculating country’s minimum wage structure. If per day wage is $20, then per hour wage is $16/8 = $2 (Assuming working hour 8 hr/day as per labour law).

 

Then Rate per Minute  = $2/60 = $0.033

 

Hourly rate of an operation = SAM x Rate per minute.

Earnings for workers in piece-rate manufacturing are based on the number of units produced by the workers.

How to change SAM to Dollar?

To convert SAM to Dollar following three steps should be followed.

Step-01: Factory Base Rate Calculation

This rate is the hourly salary of the employee. It is calculated from the calculating country’s minimum wase structure.

If per day wage is $20 then

1 hour wage = $16/8 = $2 (Assuming working hour 8 hr/day as per labor law).

1 Minute wage = $2/60 = $0.033

That means Factory Base Rate in Minute = $0.033

Step-02: SAM Calculation
We can determine any operation SAM or an entire garment’s SAM. Let say SAM of a polo shirt is 9 minutes. We will use this value in the next step.

Step-03: SAM conversion to Dollar

The formula to convert SAM to Dollar is:
Earning in Dollar = Total SAM x Factory Base Rate in Minute

Calculation:
We have,

Total SAM = 9 and

Factory Base Rate in Minute = $0.033,

So,

 Earning in Dollar = Total SAM x Factory Base Rate in Minute

= 9 × $0.0333

= $0.297

T-shirt SAM is 5 minutes, in dollar it would be = (5/60x$2) = $0.1667

Another Example
Let say SAM of a T-shirt is 6 minutes, the Base rate is $3. Then what will be the Dollar value for making this T-shirt? Please try and give answer in comment.

Things to Remember When converting SAM to Dollar

✔ The base rate can be different for employee to employee for varying employee skills.

✔ The base rate can be different for operations to operations for varying operations complexity.

✔ The Base rate per hour can be different for different employees (based on the employee's skill level).
✔ The Base rate can be different for different operations based on the difficulty level of the sewing operations/manual operations.