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Cost Reduction Ideas You Can Implement Now


By: Celine Frizzle

A lot has changed in modern manufacturing as lean and agile methodologies have taken hold and companies look for every technological edge they can find to reduce manufacturing costs, increase margins, and speed time-to-market. Yet, at the same time, it’s not unusual to see vestiges of manufacturing as it was “back in the day.” Some old processes and old ideas still hang on in many manufacturing environments.

If you’re caught somewhere between the digital future and the analog past, struggling to find ways to cut costs and improve efficiency, here are six helpful cost reduction tips you can implement now:

1. Stop writing labor tickets

It’s remarkable how many manufacturers are still hand-writing labor tickets. It is perhaps the single most inefficient process still being done today. It’s time-consuming, error-prone, and unnecessary. Today’s cost-efficient technologies such as barcode scanners can eliminate most of the human error from processes such as creating labor tickets – not to mention streamlining operations and making many processes real-time to speed up the entire manufacturing cycle.

2. Stop over-scheduling

Many manufacturers try to factor too many details into scheduling. To avoid delays and logjams, it’s more efficient to focus on the major elements, such as available machines and resources, and stop sweating the details. Software tools such as Visual exist to help guide scheduling – they’re not designed to make scheduling perfect. Use the reports within the system to help guide the scheduling process and find out where the bottlenecks are. 

3. Schedule regular maintenance

Historically, there has always been a battle between scheduling production and maintenance. Production managers want to keep lines humming so that products are rolling off and revenue’s coming in. Facilities managers want to ensure the machines are taken off line periodically and serviced to ensure peak performance. If you want to maintain efficiency and minimize costs, listen to your facilities manager. If machines are not regularly serviced, you run the risk of reduced performance, slowed production rates, unexpected downtime, and worse – damaged or even destroyed machinery.

4. Reduce paperwork

Once again, put modern technology to work. Send emails, not faxes. While it may be impossible to go entirely paperless, there are lots of ways to significantly reduce time-consuming and costly paperwork. Stop printing reams of paper just to file it in a cabinet somewhere.

5. Don’t over-purchase

Despite all the advances in computerized production planning, purchasing can still be a source of inefficiency and unnecessary cost for some companies. Cautious buyers may buy too much raw material, concerned about future availability or to take advantage of special pricing. But they’re not saving money if raw material or components sit in inventory, unused. 

6. Don’t over-produce

The same inventory issue affects production. It’s easy to fall prey to the idea of volume cost reductions – manufacturing more of something because it’ll be less expensive while the machines are set up and resources available. However, economies of scale don’t apply if products end up sitting on a shelf, unsold.

As you can see, cost reductions aren’t always the result of complex, sophisticated methodology implementations. Sometimes there are relatively simple, straightforward actions that can be taken to produce significant benefits.