As manufacturers, you’re no doubt always looking for cost saving ideas that can help grow your bottom line so you can grow your business. Rather than making large cuts to one or two departments, this goal is often best achieved through several small cost cutting efforts that ultimately add up to a significant amount of savings.
To offer you some guidance on your cost savings journey, we have compiled a list of nine cost saving ideas you can apply to your manufacturing plant, without preference to any specific industries. The following tips apply to everyone and will help you save money:
Tip Number One: Begin With a Complete Assessment
Always start with a thorough and realistic review. A thorough assessment is the first step consultants generally take when tackling a problem, and it should be yours too. By taking the time to look at the entire picture and make objective assessments of each component, you set yourself up for success in the long run.
Tip Number Two: Prioritize Return on Investment (ROI)
Following an assessment, it’s important to prioritize your findings. Often times, manufacturers go several years without a comprehensive audit which results in obsolete processes, procedures and technologies. Therefore, it’s important to take an objective approach to your prioritization.
Tip Number Three: Seek Improvement from Within
Your factory staff can be a great source of ideas for improving processes. Many times consultants will talk with workers on the shop floor to discuss ideas regarding process improvement. Because workers on the shop floor are the ones constantly using the processes, they have valuable insight into how things can be simplified or improved to generate value.
Pro Tip: Rewarding employees with a percentage of the cost savings from their improvement ideas is a great way to fuel their willingness to search for additional ways to save.
Tip Number Four: Reconsider Old Ideas
Cost saving ideas get sidelined by more pertinent priorities all the time, but that doesn’t mean those original ideas were bad ideas. By going back and looking at previous proposed cost-saving ideas, it’s likely you will find one or more great ideas that make sense to implement now or in the near future.
Tip Number Five: Grab a Copy of the ISO 9001 Standards
The ISO 9001:2015 standards are guiding principles for any manufacturing organization focused on consistently providing quality products, improving customer satisfaction and improving system processes. Visit ISO’s website to purchase your copy of the standards today.
Tip Number Six: Find Cost Savings in Energy Reduction
Energy consumption is one of many large expenses facing America’s manufacturing community. By shifting the focus of production decisions away from capacity-utilization and toward a demand-driven model, you can make the decision to scale back production during slow periods without interrupting throughput.
Even on the shop floor, there are ways to capture energy savings which can have a significant impact on your company’s bottom line. By conducting HVAC maintenance, repairing leaky air compressors and strategically scheduling equipment start-ups, you can supplement your energy conservation efforts.
Tip Number Seven: Work Smarter
By automating or consolidating repetitive manual processes, you can increase product quality, improve throughput and potentially cut down costs. Technology is always evolving and offers new ways of making tasks much easier to complete. Both on the shop floor and in the office, eliminating monotonous tasks through the use of technology is a great way to optimize your labor spend.
Tip Number Eight: Sell Scrap to Vendors
Have you ever heard the saying, “one man’s trash is another man’s treasure?” While we aren’t proponents of clichés, we do think selling off your scrap to vendors is a useful--yet often overlooked--approach to cashing in on metal, batteries and electronics that may otherwise be disposed of.
Tip Number Nine: Negotiate with Suppliers and Freight Carriers
Building long-lasting relationships with suppliers and freight companies is essential to your company’s success, but that doesn’t mean you have to accept the first price presented. Take advantage of your position as a manufacturer and try to renegotiate a better rate.
By implementing even just a few of the cost-saving ideas outlined above, your company can be on its way to a more profitable bottom line. Before you begin your cost savings journey, there is one thing you should remember. Even though cutting costs and saving money feels good, it’s important you don’t sacrifice the quality of your business. Cutting costs that ultimately result in inferior products or lackluster service just isn’t worth it.
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