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How To Cut Your Manufacturing Costs

BY Rebecca | 2 December, 2014 | no comments

Many business owners find that one of the most expensive parts of running their company stems from manufacturing costs.

Over the past few years, developments in technology have meant that a lot has changed in manufacturing. Many businesses find that they are under a lot of pressure for faster production. As well as being under pressure for improvements in product quality, cost and efficiency.

When funds are low it can be hard to run your business properly. So it is important that you learn how to manage your company’s manufacturing processes efficiently.

To make your manufacturing processes more efficient, it is a good idea to take an in-depth look at the following areas.


Outdated technology is expensive to run, especially when you look at the  cost of repairs and maintenance. You may think that you are saving yourself money by not updating your equipment, but the daily costs of running old machinery may be losing you money. Old and outdated equipment won’t run as fast as the newer machines will. This means that your old equipment may be slowing down your production.

You may think that investing in modern equipment will be expensive, but many companies offer products at lower prices for industry businesses. It is just about doing the research to find the lowest price. For instance, many energy companies offer high quality, money saving air compressors at low prices. To find out more about Ameron ActOnEnergy’s air compressors, spend some time looking into what they can offer.

Another key way to reduce your costs is to look at how effectively you are using your space. Make sure that your production area is well organised, so that you can get as much use out of it as possible. Any unused space can be used for storage or as an extra work area. This may help to reduce your external storage costs.


Labor costs can become expensive if you have a large workforce. But, there are lots of ways you can cut down on your labor costs by getting creative. Although it may seem expensive to retrain your workforce, consider retraining each worker in three areas of the company. By teaching your employees how to do various roles, you won’t need to hire as many members of staff. Although it may be an additional cost to begin with, retraining your staff to do various roles will pay off in the long run.

If funds are running low, you may have to reduce the amount of overtime available. Although this may not be a popular decision, it is better than having to make members of staff redundant. These can be hard decisions to make, but will help you keep your business running, and your staff employed.


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External companies

Check that your insurance policies don’t overlap. Many companies end up paying for two different insurance policies that both cover the same thing. Double check what each of your insurance policies cover and work out if both are necessary.

If you have a contract with an external company that supplies you with parts for example, make sure to renew it before the contract expires. If you negotiate with them, you may be able to freeze the price you pay for their services for a year or so.


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