It’s usually the case for manufacturers that the best way to get more competitive isn’t to increase revenue but to reduce costs. Already we’re seeing big manufacturers like Foxconn switch over to advanced autonomous and intelligent systems to reduce their operating expenses.
“Smart” manufacturing is the new modern way to cut cost and stay in business. But the capital investment required for that sort of thing is probably a little outside of most startup’s budgets.
Here, then, we’re going to look at all the ways ordinary businesses in the manufacturing sector can slash their costs. Take a look at these ideas from industry experts.
Sell scrap to vendors
One of the sad truths of modern manufacturing is just how much material ends up going to waste. Sheets of metal don’t arrive at your facility in the exact shape that you want them. Instead, they have to be cut, and a lot of it goes to waste. The good news, however, is that one man’s trash is another man’s treasure. There are hundreds of scrap vendors out there who would willingly buy your scrap. Things like batteries, metal, and electronics can all be sold.
Improve your processes
To cut costs, you need to look at your entire process. Reconfiguring your factory can be an ordeal. But doing so can offer a significant number of benefits. For instance, if you review your factory floor, you can often find ways to reduce the amount of walking workers are doing, taking items from one machine to another. You can also ask workers themselves if they have any ideas about how to get jobs done faster and what tools they would need.
Reconfiguring your factory floor might sound daunting, but there are all sorts of technologies, including modular dust collection pipes, that make the process a lot more straightforward. Look for products that have reconfigurability in mind so that you can respond quickly to changes in demand and make improvements to your factory floor more efficiently, saving on labor costs.
Prioritize ROI
The most important metric in your business is ROI. The return you get on your investment is ultimately what matters at the end of the day. But manufacturers often go for many years without carrying out a proper audit. Some can go a decade using the same machinery and fail to realize that greater returns are offered by newer, more efficient parts. It’s a good idea, therefore, to hold regular reviews of any new technologies that enter the market. Assess these technologies and ask yourself whether they will help you save on costs.
Consult ISO 9001 standards
The ISO 9001 standards are the guiding force behind what manufacturing companies do. They help to ensure the production of quality products, as well as making sure that processes are as efficient as possible. If you don’t have a copy in your facility yet, grab one.
Negotiate with freight and suppliers
Manufacturers tend to believe that once they’ve found a great supplier that they should stick with them. And while that’s true, it doesn’t preclude the possibility of negotiating on price. As in all areas of business, suppliers will attempt to bump up their prices, and so it’s your job to make sure that they stay flat over the long term.
