CMT, MOQ, OEM, Bulk, CNY, Ex-Factory, FOB, Grade Rules, and Lead Time: The Vocabulary That Shapes Your Clothing P&L

Why Vocabulary Drives Outcomes In Clothing Manufacturing

In apparel production, precision isn’t just a factory issue – it’s a language issue. The words used in your purchase orders, tech packs, and emails are operational decisions in disguise. +

Each term dictates who carries financial risk, when payments flow, and how your quality metrics will perform in real time. Teams that treat terminology as a formality often find themselves reacting to surprises; those that internalize it as a system of accountability move faster, negotiate better, and scale with fewer breakdowns.

Factories plan capacity, book lines, and purchase materials based on the exact words you write.

 → Ask for CMT while expecting the vendor to source fabric, and you’ll receive a labor-only price that omits your largest cost line.
→ Accept a friendly MOQ at the sewing floor and ignore the higher MOQ at the mill, and you’ll find paid-for fabric gathering dust.
→ Enter “FOB” in your PO while your logistics team assumes “Ex-Factory,” and you’ll discover insurance and freight gaps once cartons are stuck at origin.

We spoke to the leading experts at BOMME Studio, a LA based clothing manufacturer specializing in premium apparel and activewear. 

They said, “Production breaks down not because people lack experience, but because teams use the same words to mean different things. The moment you align on definitions of CMT, FOB or MOQ you eliminate half of the friction and delays before the first cut is even made.”

Terminology, in other words, allocates risk and time. When design, sourcing, finance, and logistics speak the same operational language, production stops being reactive and becomes a controlled system of execution.

This in-depth guide explains the terms you will see most often with factories, mills, and forwarders  –  CMT, MOQ, OEM, Bulk, CNY, Ex-Factory, FOB, Grade Rules, and Lead Time  –  and shows how each one affects cost structure, accountability, and calendar planning.

CMT  –  Cut, Make, Trim

Plain meaning

You supply all inputs  –  fabric, trims, labels, hangtags, packaging  –  and the factory performs cutting, sewing, finishing, and packing. The quote you receive covers labor and factory overhead related to production, sometimes thread and needles, rarely anything upstream.

Where it excels

You require strict control of fabric hand feel, recovery, chemical finish, or dye lot, common in performance knits and premium capsules.

• You already hold relationships with mills and trim vendors or you are standardizing materials across multiple factories.

Trade-offs to plan for

Procurement risk sits with you, including delays, off-shade rolls, and shortages; if materials arrive late, the line idles.

• Governance must be tight: bill of materials, yield assumptions, wastage allowance, and substitution rules should be explicit.

CMT readiness checklist

Finalized tech pack with tolerances and seam specs.

• Confirmed machine park: flatlock, coverstitch, bartack, heat press.

Booked cutting marker with fabric width and nap direction.

• Thread spec and color codes confirmed, or state that factory supplies.

Repair policy for skipped stitches and open seams defined in writing.

OEM  –  Original Equipment Manufacturer

Plain meaning

The factory produces your design under your brand and sources materials to your bill of materials. You approve lab dips, strike-offs, trims, and samples; the factory consolidates purchasing and delivers finished goods under a quoted Incoterm.

Where it excels

You want fewer vendors to manage and prefer a single unit price that includes fabric and labor.

• You value the factory’s mill network and negotiating power on materials and dyeing.

Trade-offs to plan for

You cede some control over mill choice unless you lock an approved list; insist on testing standards, batch traceability, and a substitution policy before you sign.

OEM governance checklist

Approved mill list attached to PO; any substitutions require written consent.

• Testing standard and pass/fail thresholds defined for stretch, recovery, pilling, and colorfastness.

Quote clarity: what is included in unit price and what is not (testing, artwork screens, special packaging).

• Deposit schedule and triggers aligned to calendar gates.

MOQ  –  Minimum Order Quantity

Plain meaning

The smallest quantity a supplier will sell or produce. 

It exists at multiple levels and they rarely match: fabric mills by dye lot, trims and heat transfers by artwork batch, sewing floors by style and often by color.

How to read it in practice

Mill MOQ might be 1,000 yards per color, measured in continuous dye lots.

• Sewing MOQ might be 300 units per color for the factory to run efficiently.

Trim MOQ might require a 1,000-piece logo transfer even if your capsule needs 400.

• Convert fabric MOQ into units

If leggings average 1.2 yards per unit and the mill MOQ is 1,000 yards, your gross units per color are 833; after an 8 percent cutting loss and defects allowance, your net is roughly 767 units. 

If your plan called for 300 units per color, the mill MOQ, not the sewing MOQ, is the constraint.

Practical levers

Consolidate colors to pool yardage.

• Choose stock-service fabrics when testing new styles.

Standardize trims across styles to use batch MOQs efficiently.

• Negotiate split dye lots, accepting a small surcharge to reduce excess.

Bulk  –  What happens after development

Plain meaning

The main production run after sampling is complete and approvals are signed. Bulk starts only when fabric is physically in-house, cutting markers are approved, and the PPS (preproduction sample) reflects final materials and construction.

Why leaders should care

Cash commitments and delivery dates crystallize at the moment you move from development to bulk. If you enter bulk with unresolved lab dips or untested seam specs, you will pay for rework or late shipments later in the calendar.

Bulk gate checklist

PPS signed with date and version number.

• Fabric and trims received, inspected, and logged by batch ID.

Cutting markers approved with yield reports.

• QC plan in place: in-line, end-line, and final AQL.

Lead Time  –  Treat it as a chain of gates, not a single date

Plain meaning

The calendar from order confirmation to goods ready, best managed as a series of measurable gates: proto, fit, size set, PPS, materials in-house, cutting start, sewing start, finishing, TOP (top-of-production), final QC, pack out, and handoff per Incoterm.

Typical ranges for activewear

Development: 4–6 weeks, depending on decisiveness of fit approvals.

• Bulk under CMT: 8–14 weeks, assuming materials are already in-house.

Bulk under OEM: 10–16 weeks, driven by mill and dyehouse schedules.

• Logistics: add transit by Incoterm and lane, plus buffer for holidays and port congestion.

Leadership habits that protect lead time

Do not book a sewing line until fabric is both approved and physically at the factory.

• Fix one decision-maker for fit and color to avoid drift.

Publish a two-row calendar for every style: plan vs. actual, with red flags when slippage exceeds three days at any gate.

Ex-Factory, FOB, and how risk actually moves

Ex-Factory (EXW)

Meaning: Unit price at the factory door. You handle export clearance, freight, insurance, import, and inland haulage.

• Use case: You have strong logistics capability and want tight control; useful for domestic moves or consolidations.

FOB (Free On Board)

Meaning: Supplier delivers to the named origin port, clears export, and loads cargo on the vessel or hands off to the airline. You handle main carriage, insurance, import, and destination logistics.

• Use case: A balanced handoff when you trust your forwarder and want predictable origin processes.

Operational notes

Under Ex-Factory, confirm palletization, labeling, and document format for your forwarder.

• Under FOB, agree on carton specs, named port, and who pays peak season surcharges.

In both cases, align on who orders and pays for third-party tests and inspections.

CNY  –  Chinese New Year and Its Impact on Production

Plain meaning

CNY stands for Chinese New Year, and if you work with suppliers or manufacturers in China, this term will appear constantly in planning emails. The holiday, which typically falls between late January and mid-February, is the single largest disruption period in global apparel production. Many factories close for four to six weeks, and the effects ripple through the entire supply chain for months.

What actually happens

Before CNY: Factories rush to complete outstanding orders, which can lead to bottlenecks, quality issues, and port congestion as multiple shipments try to leave China simultaneously.

• During CNY: Production and logistics essentially halt. Most manufacturing facilities shut down completely, ports operate on limited capacity, and virtually no shipments depart.
• After CNY: The restart phase is unpredictable. Many workers travel long distances to their hometowns and some do not return immediately  –  or at all. Factories often face labor shortages that delay the resumption of normal output for several additional weeks.
• Leadership implications

If your supply chain relies on Chinese production, build CNY into your master calendar as a hard blackout period, not a soft delay. Place purchase orders well in advance  –  ideally by October or November  –  to ensure goods ship before closures begin. For replenishment programs, stagger orders so safety stock covers at least two months of post-holiday recovery.

Checklist to manage CNY risk

Identify factory closure dates by August or September each year.

• Lock in production slots before the pre-holiday rush.
• Avoid approving new samples or development during January and February.
• Schedule freight bookings early, as rates surge before CNY.
• Keep a clear buffer in lead time  –  typically six to eight weeks beyond normal.
• By planning around CNY instead of reacting to it, brands prevent cascading delays and protect their delivery commitments to retailers and direct customers alike.

Grade Rules  –  The quiet driver of returns

Plain meaning

The increments that translate a base size into a full size run. In knits and stretch wovens, grade rules that copy woven templates produce tight calves, rolling waistbands, and sheerness under movement.

What to require

Grade rules built for stretch percentage and recovery, not just linear measurements.

• Movement-based fit tests in every review: sit, lunge, squat, overhead reach.
• Tolerances per point of measure; for example, waist ±0.5, inseam ±0.25.
• Consistent base size based on your largest sales cohort, not the sample model.
• Impact on metrics

Accurate grade rules lower size-related returns, improve repeat purchase rates, and stabilize reviews, which in turn stabilizes demand planning and inventory placement by door or region.

Tables you can reuse in vendor conversations

Table 1 – Key Terms and their leadership implications

Table 2 – CMT vs. OEM vs. Hybrid across the production lifecycle

How to Institutionalize This Knowledge

Start by creating a shared glossary of key terms that lives where your teams already work: inside your PLM, ERP, or vendor onboarding portal.

Define not only what each term means, but also what it implies for payment terms, freight ownership, and material liability. Incorporate this language into tech pack templates, seasonal kickoff decks, and supplier scorecards so that every department, from design to finance, operates within the same playbook.

“When vocabulary becomes standardized, it turns into an internal control system. It keeps sourcing, design, and logistics aligned on what’s expected, who’s accountable, and when decisions lock. We see the biggest production gains not from faster sewing lines, but from teams that speak the same operational language.” added the experts at Bomme Studio.

Review these definitions annually with suppliers to ensure alignment as your brand (hopefully) grows. 

Bottom line for Mirror Review’s audience

CMT, OEM, MOQ, Bulk, CNY, Ex-Factory, FOB, Grade Rules, and Lead Time are not abstract terms, they are the operating levers of your apparel business. 

Mastering them turns production from a sequence of surprises into a repeatable system, one where fit is consistent, deliveries are predictable, and margin is earned through disciplined choices rather than hope.