5 Effective Ways To Reduce Manufacturing Costs
Since the advent of the Industrial Revolution, manufacturers have been devising ways to accomplish more work for less money. A lot has changed in manufacturing since then, but this principle has not. For today’s modern plants, we have five effective ways to reduce manufacturing costs, from more diligent work in the office to better machinery on the factory floor.
Track Expenses More Closely
The costs involved with manufacturing are numerous. Labor, overhead, materials, and more all add up—but sometimes not under perfect accounting. With inefficient practices, funds can slip through the cracks and raise your expenses. When you have a more sophisticated accounting systems in place, you can closely track the flow of money in and out of your facility and stop cash leaking out.
Reduce Raw Material Costs
You’re probably paying too much for your raw materials. If you can cut costs at this early point in the process, you’re certain to benefit. Can you renegotiate with your vendors? Perhaps one option is to restructure your contract to provide lower costs over the long term, guaranteeing money to your valued partner in the future. You may even be able to explore more competitive offers from other providers of raw materials.
Ask What You Can Automate
We’ve come a long way since the early days of the assembly line. Today’s tasks require fewer people to complete, and that number continues to dwindle as technology advances. We know you’re not Luddites—you’ve already given over several processes to automation. The key to reducing costs further, then, is not to stop there. Assess your remaining manual processes and explore whether you can automate those as well.
Japanese automakers revolutionized their industry with a set of principles we know now as “lean manufacturing.” One of the most effective ways to reduce manufacturing costs is to take these principles to heart. This entails making strategic reductions that eliminate the sorts of costly redundancies that many manufacturers had not thought to address. For instance, refusing to overproduce goods means lower production costs, lower inventory costs, and lower transport costs.
More Efficient Equipment
The quality of the equipment you rely on is key to your manufacturing processes. A performance metric that may elude your assessments, however, is energy efficiency. Wasting energy runs up manufacturing costs while hiding in plain sight. Moley Magnetics can help you address this slow trickle of wasted cash with battery-powered electromagnets that boast high lifting capacity without draining your electricity. Our 24v scrap magnet features high power and a high duty cycle without drawing on alternating current or a generator.