If you work in the manufacturing industry, you probably already know how small actions can impact your bottom line. Something as simple as energy use or an extra step in the supply chain can end up causing your bills to skyrocket. However, you can boost your return on investment and increase your business’s profit margin with these basic steps.
Audit your current costs.
You can’t start to give your budget an overhaul without first accurately assessing it. This should include an expert look at all your outgoings, from supplies to onsite energy use. When was the last time you audited your internal procedures? Look at ways to not only shave money from your budget, but also save time in the process.
Reduce your energy consumption.
Eco-friendly manufacturing is a major trend, so there’s no excuse for wasteful practices. Not only is a high level of energy consumption bad for the environment, it’s also bad for your bank account. Look to the shop floor first to see where you can increase efficiency. Conduct regular maintenance on HVAC systems, repair leaky or faulty equipment, and use a smart energy monitoring app to automatically turn power off when not in use.
Negotiate with your suppliers.
Whether you’re ordering raw materials from a local vendor or industrial machinery from a company like CMR, you want to start building professional networks with room for negotiation. Compare prices carefully to find the best deals, shopping around online and working out a deal to reduce material costs. This might include purchasing your materials in larger lots to push down the cost per unit, or looking for new techniques that use less material during the manufacturing process.
Pare down labour costs.
While it’s important to invest in your own employees if you want reliable, skilfully crafted results, there are ways to cut down your costs in this department as well. Invest in training sessions and useful equipment that makes your workers more efficient. Look for ways to eliminate wasted steps in the manufacturing process with specialized training, cutting the time required to produce each unit. Don’t be afraid to ask for input from employees.
It’s a good idea to audit your costs on a regular basis to stay on top of how you’re spending your money. This will help you notice areas that could use improvement in terms of both efficiency and cost.