Manufacturers are always looking for techniques to reduce their cost. Here are five of them that will help the manufacturers reduce cost irrespective of their sector. The primary step would be to assess their process and do on internal audit. Only when the big picture is at view, methods can be implemented to reduce the costs.
Most of the time without our notice we tend to waste a lot of electricity. Implementing sensors that would stop the machines immediately after usage can reduce quite a lot of cost. Replacing energy guzzling machinery with those consuming less energy can save up to 10% of the cost. Usage of alternative energy sources like solar energy which is the cheapest source of energy can cut down operating cost significantly.
Fixed Cost Reduction
Machinery for a manufacturing industry is very important, but only a few machineries are constantly used. Hence, owning the machinery that is used passively wouldn’t be feasible; renting/leasing such machinery can reduce the fixed cost. Using automation in production process can decrease the labour cost abundantly. Hiring a manufacturing agent, outsourcing advertising, marketing and sales could also help in cost reduction.
Overhead Cost Reduction
Maintaining inventory by not over producing and recycling/selling the wastage or scrap of the raw material can always free up and manage the factory space and reduce wastage. At times, outsourcing supply can reduce the business space, risk, staff, and maintenance of vehicles. Buying raw materials at bulk and sharing it with another manufacturer can reduce the material and inventory space. Intercom and internet calling, conferencing and video calling meetings can help reduce administrative cost.
Reduction in Labour Costs
Usage of technology for the manufacturing process like implementing sensors and automation, robotics can drop down as the number of labours drops as the automation requires less human interference and is more accurate. Using part time workers and free lancers can eliminate the idle time of labourers. Implementing methods to increase efficiency; comfortable positive workplace, eliminating overtime as it reduces efficiency, training employees, getting to know the employees, reskilling of the employees rather than assigning them monotonous task can help the manufacturer make optimum use of the labour force.
Customer related cost reduction
Technology can help the manufacturer cut down the cost in every stage of the manufacturing process and also at marketing. Using technology for marketing, advertising and promoting of goods can reduce cost abundantly. Designing products digitally 3D print of the product would help the manufacturer in better understanding of customer needs and can reduce correction and reproduction.