Manufacturing Industry: How To Save Money, Time And Resources

manufacturing industry

Businesses want to save money, but these savings take on a whole new meaning when it comes to manufacturing. Every penny counts as expenses are often incredibly high. This is due to this industry needing highly skilled labor, expensive raw materials, and lots of energy to turn the raw material into something useful.

But what are some things that every manufacturer should consider when looking to save time, money, and resources?

Perform a Comprehensive Audit

Before you engage in any other task, a thorough audit should be at the top of your list. This should cover everything from employees to where your supplies come from to maintain your machinery. Once you have completed the audit, you should look through it with your senior management team and see the general overview of operations.

You might discover that maintenance costs too much, meaning you could check your MRO suppliers to negotiate a lower price for parts and machinery. It could also show that your employees are unmotivated and undertrained, in which case you could implement a retiring and retraining program to get things back on track. Whatever your audit uncovers, you should act as soon as possible to maximize the benefits you might gain.

Engage Suppliers In Negotiations 

Depending on what materials you use in your manufacturing process, raw materials are often one of the highest costs. Furthermore, they are typically associated with the commodity market and somewhat out of your control. Nevertheless, it is often the case that when prices go down, suppliers can be slow to pass on the savings to their customers.

However, it only takes direct communication with them to check if they can lower the costs. Buying in larger quantities might be necessary to achieve this, but it makes sense if the cost savings are there.

Furthermore, it would help if you calculated the cost of building or leasing more storage against any bulk savings. If the difference is enough to make it worthwhile, you should jump at the opportunity. Nonetheless, be sure to account for the additional labor and transportation costs.

Prioritize Your Return On Investment (ROI)

You might think that you are already doing this because, after all, it’s good business, right? However, you might discover that your company is still practicing outdated processes, techniques, and technologies upon your audit. This happens for several reasons, not least of which is complacency.

Often when good times are rolling, there is no motivation to go through the pain of updating processes or investing in new tech. Nevertheless, this is vital if you want to become a leaner operation. Updating your equipment could result in lower energy costs and even less staff, which will improve your bottom line in the long term.

Additionally, there is another benefit to doing this. For example, once you have invested in better machinery or increased automation to the point that it is saving you money, you should consider passing some of the savings onto your customers. You don’t need to give 100%, but doing so will boost your standing and get you more business. With your increased productivity and workflow, you should be able to handle more business as it comes.

Seek Ideas From Within

Instead of hiring an external company to come in and suggest improvements, your priority should be to speak to those on the front line of operations; your own employees. You might be surprised at what they have to say. The upgrades they suggest could save you untold amounts of time and effort, and it all comes directly from those who have first-hand knowledge.

A great example of this might come from an employee working on a particular line that suggests that he could work even faster if he had access to a specific tool or gimbal. You should check, and if your cost calculations work out, you might consider investing in the tooling they suggested. This will do two things:

  1. Increase productivity.
  2. Show your employees that you listen and their opinions count.

Reduce Energy Consumption

Somewhere in the top t3 expenses will be your energy usage. A manufacturing company inevitably uses a lot of energy to turn raw materials into valuable products. Nonetheless, it is also something that you could lower if you look into it. This doesn’t mean installing solar panels all over your factory roof but instead looking at ways that you can improve efficiency. For example:

  • Installing energy-efficient lighting: This should be factory-wide, but you can also go further. For example, in bathrooms, you could install movement sensors that turn off lighting when nobody is in there.
  • Updating old HVAC systems: HVACS systems are required in most instances, but inefficient ones can use more energy. Keeping them clean and efficient is the key.
  • Reschedule energy-intensive machinery: If you use specific machinery that requires a lot of electricity, you might see if you can reschedule its use to the night when energy costs are typ[ically lower.
  • Assemble a team to manage energy: Setting up an internal department to handle energy use could lower costs. You must be careful that this team doesn’t overextend themselves and cause operations to decrease. You still have your bottom line to consider.

Sell Your Scrap

Most manufacturing companies will do this already, but you should do this immediately if you are not doing so. By selling off some of the scraps you produce (and cannot reuse), you might offset other costs and even save on disposal costs. Those already involved in this activity should ensure that the market price is correct and see if there is additional scrap they can sell.

Use Automation To Improve Productivity

Automation has become a game-changer in the manufacturing industry. While it has caused some consternation among employees fearful of losing their jobs, the ROI benefits are pretty amazing. Nonetheless, you must be diplomatic with existing staff and only invest in automation where you will find the most benefits.

In some cases, automation can decrease productivity and increase costs. However, this is rare, and if you want to transport older manufacturing methods into the modern world, automation should be high on your list.

Saving money, time and resources should be at the top of every business owner’s mind. And while it can seem like an impossible task when your company reaches a certain level, you will find many ideas you can implement to improve your situation. However, everything must stem from completing an entail audit, as this will enable you to go into things with a clear vision.

Nicole Middleton
Nicole calls herself a typical millennial girl and thrives on her share of social media, celebrity gossip, and all things viral content. She’s a big fan of pop music and plays the guitar as a hobby.