Saving Money in the Manufacturing Business

October 22, 2018 3:56 pm

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If you own a manufacturing business you may be looking for ways to cut costs. As the prices of raw materials grow, cutting costs in other areas can help to prevent you from having to increase the price to your customers, and that is crucial in the current financial climate.

Often, it is not one are that will produce enough savings for you to achieve this, it will more likely be smaller savings with several different aspects.

Speak To Your Staff

You should carry out an assessment of all your overheads and this should involve speaking with your staff. They are the ones actually doing the work and they might have some good ideas about saving money or making production more efficient.

Generally, your employees will be happy to help, as it could be their job on the line if things go wrong and you have to close the business. It never hurts to show your appreciation though if their ideas work, perhaps with a bonus or a paid day off.

Revisit Old Ideas

Sometimes, cost-cutting measures get sidelined when business is good, but you should look back at what they were as they could be just as effective again. You could well find ideas that worked really well, and although you now have different equipment and different employees they could work just as well again.

 

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Look At New Methods

It is always worth looking at new methods. With all the advances in technology that have been made in recent years, your processes could possibly be very outdated and costing you more than necessary.

Consider if things such as injection moulding would be cheaper, or if some of the mundane tasks could be automated to speed them up. Then your staff could concentrate on the more important jobs, and get the products made more quickly.

Although you may have to spend some money to start with, making your business ‘smarter’ could save you a lost of cash in the long run.

Reduce Energy and Communication Bills

Energy and communication bills are some of the largest expenses for manufacturing businesses. There are many companies out there offering both. Talk to some of them and see if you can get a better deal than you already have. Then tell the company you are with and see if they will match or beat it.

Remember, they all want your custom. They are not doing you any favours. It is the other way round, and they want you to favour them with your nosiness.

In fact, the same applies to any suppliers, accountants, freight carriers and any other services you use. Many businesses are struggling and you can use that as leverage to get a better deal.

There are agencies that will do all of this for you. They negotiate new deals, if they think they can do better than you already have, but only charge you if a saving is made. The charge is usually about 25% of the saving.

At the end of the day, you need to save money wherever you can so that you can stay competitive, so look at every little thing that is spent and see if it really needs to be.

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