What is job work in textile manufacturing?
Job work is when you send your own material to another unit to do one process for you, such as knitting, dyeing, printing, embroidery or stitching, and the unit sends the processed goods back. The material stays yours. The job worker charges only for the work. Almost every textile and garment business uses it, and most of the fabric that goes missing goes missing here.
This guide explains the common types of job work, how one job work cycle runs, how to work out the real cost after processing loss, and what to record so nothing is lost on the way.
Common job work in textile and garments
| Process | Goes out | Comes back | What to watch |
|---|---|---|---|
| Knitting | Yarn (kg) | Greige knit fabric (kg) | Weight difference, fabric quality |
| Weaving | Yarn (kg) | Grey woven fabric (metres) | Yarn used per metre, defects |
| Dyeing and finishing | Grey fabric | Dyed fabric | Weight or length loss, shade, shrinkage |
| Printing | Fabric or cut panels | Printed fabric or panels | Rejects, count of panels |
| Embroidery | Cut panels | Embroidered panels | Rejects, missing pieces |
| Stitching (CMT) | Cut panels and trims | Finished garments | Pieces by size and colour, alterations |
| Washing | Garments | Washed garments | Shrinkage, damage |
Many orders pass through several job workers in a row: yarn to a knitter, fabric to a dyer, then to a printer, then to a stitching unit. Each step has its own loss and its own charge.
How one job work cycle runs
- Job work order. Agree the process, quantity, rate and expected return date with the job worker.
- Reserve the material. Hold the lots for this order so the same fabric is not promised to another order.
- Issue with a document. Send the material lot by lot with a delivery challan or issue slip that lists lot numbers and quantity.
- Track what is outside. Until it returns, the material is stock lying with that job worker, not stock in your store.
- Receive back. Record what comes back against each lot that went out, and the loss.
- Inspect. Check quality before the processed material is used.
- Update the cost. The processed material now costs more per unit: the original rate, plus the process charge, plus the loss.
Working out the real cost after job work
Say you send 1,000 m of grey fabric worth ₹120 per metre to a dyer who charges ₹30 per metre sent. You get 970 m back, so 3% was lost.
- Total cost: (1,000 × ₹120) + (1,000 × ₹30) = ₹1,50,000
- Cost per metre received: ₹1,50,000 ÷ 970 = ₹154.64
- That is ₹120 base + ₹30 process + ₹4.64 for the loss
If the same fabric then goes to a printer at ₹15 per metre on the 970 m and 960 m come back, the cost becomes (₹1,50,000 + 970 × ₹15) ÷ 960 = ₹171.41 per metre. Each stage carries the cost forward. If you ignore the loss, every order costed on this fabric looks more profitable than it really is.
(Whether the job worker charges on quantity sent or quantity received depends on your agreement. Use the same basis every time.)
What to record for every issue
- Job worker, process and the order and style it is for
- Lot or bale numbers and the quantity of each
- Issue date and challan number, plus transport details
- Agreed rate and expected loss
- For each return: lot, quantity received, loss and date
With this, you can answer the two questions owners ask most: how much of my material is with each job worker right now, and how much did we lose last month.
Job work and GST in India
In India, inputs sent to a job worker under GST without paying tax are expected to come back within a time limit (one year for inputs, three years for capital goods), and the movement is reported in Form ITC-04. Goods usually move on a delivery challan. Keep issue and receipt records by job worker, date and challan so this reporting is easy. Rules change, so confirm the current rules with your tax adviser.
Common job work problems
- No one knows how much fabric is lying with each job worker.
- Loss is not recorded, so it quietly becomes a cost nobody sees.
- Lots get mixed, so a shade problem cannot be traced back.
- More material is issued than the store actually holds, and stock goes negative on paper.
- The fabric rate in costing is never updated after processing.
How Karpan ERP handles job work
In Karpan ERP you raise a job worker order for any process you set up, reserve stock to the order, and issue lots against it, oldest first. An issue larger than the stock you hold is blocked, and once goods are received the issue is locked. Every lot that comes back is logged with its loss, and the item rate rolls up as base rate plus process cost plus loss, stage after stage. The Jobworker Stock report shows what is still with each job worker, with issue number, date and lot. See job work management in Karpan ERP.
Questions people ask
What is job work in textile?
Job work is sending your own yarn, fabric or panels to another unit to do a process such as knitting, dyeing, printing or stitching. The goods stay yours, and the job worker charges only for the process.
Who is a job worker?
A job worker is the person or unit that carries out a process on goods that belong to someone else, for a job work charge.
How do you calculate processing loss in job work?
Compare the quantity sent with the quantity received for each lot. Loss % = (sent − received) ÷ sent × 100. For example, 1,000 m sent and 970 m received is a 3% loss.
How do you track material lying with job workers?
Record every issue and every return by job worker and lot. The balance (issued minus received minus loss) is the material still with that job worker.