Reducing operating expenses is one of the most pressing concerns for any business, but it is particularly critical in the manufacturing and assembly sector. These businesses, often affected by external factors like shipping disruptions or material shortages, must determine how to reduce manufacturing costs to save money and prepare for an unpredictable market.
Top Methods for How to Reduce Manufacturing Costs
The challenge when it comes to reducing manufacturing costs is finding how to do so without negatively affecting your products or workforce. Fortunately, there are multiple new technologies and techniques that allow you to do just that.
Increased Automation
Automation has been a key trend in manufacturing ever since the invention of the first industrial robot in 1961. Even today, augmenting your workers with machines and computer-based tools remains one of the best ways to have a faster, more efficient business. In manufacturing, this often takes the form of automated assembly lines crewed by industrial robots and controlled by industrial panel PCs.
Embracing factory automation lets machinery handle boring, repetitive, or dangerous tasks, freeing employees to focus on challenges that require creativity or problem-solving skills, which machines obviously lack.
Better Logistics and Warehouse Management
A typical manufacturer must manage a steady stream of both input and output. They must purchase and stock a wide range of raw materials, pre-made components, and consumables used in manufacturing, while at the same time managing their inventory of products and ensuring they can meet demand. Over- or under-stocking on either of these leads to unnecessary expenses as a company is forced to pause production.
Better inventory and warehouse management is essential for preventing this scenario, as well as locating products and supplies in a fast, efficient manner. This is best accomplished by using modern warehouse tools, such as using industrial tablets to scan packages and automatically update inventory, rather than relying on pen-and-paper records.
Waste Reduction
Reducing waste is suitable for both the environment and the bottom line. More efficient design processes, such as using computer numerical control (CNC) machines and computer-assisted design (CAD) techniques, can help design and manufacture products with less waste involved. This saves on purchasing raw materials and reduces the amount of waste that needs to be disposed of afterward. Depending on your products and manufacturing process, you can also invest in more sustainable materials, such as recycled resources.
This category also includes switching to energy-efficient tools and processes, thereby reducing the amount of power your business uses and cutting down on your power bill. Even something as simple as updating your building or equipment to ENERGY STAR standards can help in this goal.
Standardize and Consolidate
By standardizing the parts that products use, manufacturers can simplify procurement and reduce the number of parts they need to produce and stock. This makes assembly easier and helps prevent defects from occurring. It also makes maintenance and repairs easier, as parts are more accessible and easier to find, reducing turnaround times. Naturally, you cannot standardize everything, as different applications require different capabilities, but standardization makes parts management significantly less of a headache.
Better Quality Control
A substandard product inevitably leads to diminished customer confidence, negative word-of-mouth, and often a costly recall or refund. Quality control may seem expensive upfront, but it pays for itself by preventing issues from arising. A strong quality control system and rigorous inspections prevent faulty or substandard products from ever reaching the market, sparing you from the aforementioned consequences.
Advantages of Reducing Manufacturing Costs
By figuring out how to reduce manufacturing costs, businesses can reap numerous benefits that go beyond just the bottom line.
Financial Savings
First and most obviously, the greatest benefit of lowering your manufacturing costs is the savings it generates. With these savings, companies can reinvest in their operations and employees, such as purchasing new equipment or offering higher salaries for workers. In turn, these investments help to promote productivity for the company even further. They can also pass these savings on to the customer, encouraging a broader customer base to have access to their products.
Greater Flexibility
Lower operating costs make it easier for a business to adapt to changing market conditions, such as changing costs for raw materials or losing access to a supplier. This helps ensure the company will be able to maintain its operations even in periods of economic disruption and stress, such as during a recession or trade war.
Sustainability
While not always the intended effect, many cost-reducing initiatives also come with the side effect of being more sustainable and economically friendly. By recycling waste materials such as plastic or iron scraps and reusing them rather than simply throwing them away, manufacturers can reduce procurement costs and decrease the need to extract new materials from the environment.
Challenges to Reducing Manufacturing Costs
There are significant obstacles that a business must address when trying to reduce manufacturing costs. The most critical include:
Initial Investment
Obviously, any modernization or upgrade initiative requires a serious monetary investment. This includes not just purchasing new machinery or licensing new software, but also training workers to use these new tools and dealing with the temporary loss of efficiency during this time. This means that any new technology, such as industrial computers, must be intuitive and easy to use to reduce the time required for training and acclimation.
Resistance to Change
Resistance to change can come in many forms, ranging from personal to institutional. On a personal level, employees may be mistrustful of new technology or workflows, falling into the logical fallacy of “this is how we’ve always done it.” They may be suspicious that it will fail to deliver results or fear that it will be used to replace them.
On an institutional level, businesses have to deal with procuring and deploying the methods for reducing manufacturing costs, such as more efficient computers from machinery control, and ensuring regulatory compliance with things like safety and environmental standards. Any new tech that they use must be exceptionally reliable, easy to use, and able to meet the highest possible regulatory standards.
Outdated Technology
For many companies hoping to update their operations, one of the biggest obstacles is often their own workflows and tools. A manufacturer that wants to use modern digital design programs might not be able to because their legacy CNC machines cannot run said programs. A company trying to optimize its shipping and logistics will find itself held back by paper record-keeping and all the headaches that come with relying on physical records.
One key advantage of industrial-grade computers is their legacy compatibility. By featuring legacy I/O ports such as serial ports, modern industrial computers can interact with and support older machinery, minimizing the need to update your workflows.
Reduce Manufacturing Costs with Cybernet Computers
Cutting manufacturing costs without sacrificing quality or safety is a constant challenge for manufacturers. However, using the right tools and processes can help businesses achieve better results without compromising their goals.
If you’re looking for how to reduce manufacturing costs with modern tools, contact Cybernet Manufacturing. Our range of industrial computers and tablets can help you modernize your production process and simplify logistics, which in turn helps you save money throughout your business structure. As an experienced original equipment manufacturer, we can customize our devices to fit your exact needs, letting you get the performance and features you want without breaking your budget.