Increase Efficiency While Cutting Costs

The profitability of the manufacturing industry is constantly in a state of flux. While many emerging markets continue to see dramatic increases in the demand for their products, the instability of commodity and operations costs can cause a great deal of variability in profits. Because the costs of raw materials can be so unpredictable, it benefits many manufacturing companies to look for ways to increase their productivity and efficiency while still cutting costs. Being able to achieve this goal allows these companies to maintain their profitability despite the rising and falling commodity prices.

Following are just a few ways manufacturers can increase their efficiency while reducing their bottom lines:

Improve Business Processes

Whether at a small mom-and-pop store or a large manufacturing plant, employees often fall into a pattern of doing things “the way they have always been done.” However, many policies become outdated and inefficient over time. For example, perhaps it used to be necessary to have a purchase approved by multiple departments, but with your current chief financial officer, that process is no longer necessary. Rather than insisting that the purchase move through the old system of command, it would be more efficient and cost-effective to update the policy and send purchase approvals straight to the CFO.

Manufacturers can drastically improve their overall business strategies by reviewing their current business processes to find areas that can be redefined, improved or reorganized. By eliminating redundant, out-of-date or unnecessary business practices, manufacturers can see their production processes improve, productivity increase and profits expand.

Update Technology

Whether it's technology used on the manufacturing floor or in corporate offices, efficiency at lower costs is possible by updating and improving a manufacturing plant's Web tools, software and equipment. Of course, this will require upfront costs to alter the technology of an entire corporation, but this new technology will help manufacturers stay ahead of their competition. Streamlining the production process using high-quality technology and cutting-edge processes leads to fewer overall costs and greater profitability.

In addition to improving the functionality of a plant, continually updating technology to keep pace with innovation shows a manufacturer’s willingness to evolve rather than remain static. Suppliers are drawn to companies that stay on top of their game, and other businesses are more likely to partner with well-equipped manufacturers.

Address the Causes of Waste

In order to find the causes of waste in a manufacturing company, it may be beneficial to bring in an outside party that can take an objective look at the company’s policies and resources. One of the main areas of waste for many manufacturers is energy use and consumption.

A number of companies lose a lot of energy during the production process through poor ventilation or ineffective heating and cooling systems. By finding several of these small areas of energy loss and addressing them, manufacturers can reduce their energy reliance and improve efficiency.

In addition, finding areas of wasted labor energy or poor labor management can drastically affect energy efficiency in a plant. A manufacturer may find that its labor force becomes physically fatigued after six hours on the floor. By providing mandatory breaks or shortened shifts, the productivity of the entire operation could improve. Companies that examine and address these areas of wasted energy can significantly improve their efficiency.

Take Advantage of Recycling

In this day of environmental awareness, it comes as little surprise that recycling and reusing manufacturing materials is one of the top ways to cut costs and improve efficiency. Well-equipped facilities are able to efficiently sort large volumes of material waste into usable quantities that can be recycled and reused. These materials can include everything from leftover production substances to scraps of raw materials that can be put back through the manufacturing process. By converting these waste materials into usable products, manufacturers are able to increase their efficiency and profits.

Through careful review and streamlining of processes, many manufacturing plants can improve their overall efficiency while cutting their costs.