Lessons Learned from Years with

Insight on how to achieve Low Production Costs in the Manufacturing Processes

Manufacturing is an integral part of the modern society. Manufacturing entails process that create value addition on raw resources. Manufactured products are more durable than when they are in their raw state. Finished goods change the lives and lifestyles of their users, increase functionality and are sometimes market disruptors. Manufacturing can either be hand-made or machine based. Some of the finished products include automobiles, aircrafts, furniture, fashion items, jewelry, and consumables. Manufacturing businesses are propelled forward by managing overheads in order to increase profitability.

The first step to achieving lower overheads and higher profitability is by assessing efficiency in the manufacturing processes. A firm can increase its productivity by embracing advanced technology in their manufacturing process. This can be done by using more efficient, computerized machines. If efficiency can be increased without compromising on the quality of the product, then it is a reason to celebrate. Efficiency can also be increased by using a more efficient end-to-end system application solution. Such a system will increase better coordination with the other vital business organs such as the marketing, purchases and administrative departments. A good system will also eliminate wastage, and overstocking due to increased functionality and coordination within sectors. Instead, the excess production is quickly translated to profitable sales.

The overall cost of production can be reduced by slashing some direct overheads. Some of which are labor costs, machine operation cost, electricity costs, and machine idle time. This can be achieved by sourcing for affordable yet high quality raw materials. The management and purchasing department should evaluate their suppliers to ascertain that they are providing them with quality materials at a cost effective rate. A more drastic measure would be to change the material brand yet maintain same high quality products. Equally, by investing in modern machinery the manufacturing process can get rid of redundancy, downtime, and labor intensive machine operations. Processes that formally relied on costly human labor can be improved by investing in more efficient advanced machines.

Product packaging also contribute to the soaring production costs. Some manufacturers forget that the product is king and not the package. Once the product has gained popularity and has a strong market share, the management should re-consider using costly packaging material and settle for more affordable ones. Reduced packaging costs push profits up and a portion of this profits can be passed to the customer in form of profits.

Labor costs should also remain at acceptable levels. Without a double, the manufacturing process cannot succeed without a workforce. Notwithstanding, there should be some moderation. Manufacturing labor should be quantifiable through efficiency and productivity. This can be done by putting up monitoring and evaluation processes. It can also be achieved by rewarding outstanding performance, and high productivity on an individual and group level.

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