Last Updated on Mar 31, 2020 by James W
If your business manufactures and sells a product, then your operation rests upon the efficiency of the creation process.
If you’re spending too much money at the development stage, you’ll need to sell the product for a higher price – which makes them harder to shift.
So, to make more money in your manufacturing business, you have to streamline it and look for ways to make the process easier. The company will rest on your ability to produce quality results at a lower price – and that’s no small feat.
The following few points are a combination of cutting costs and making processes more productive. Either way, your company’s wallet will be fatter as a result!
- Rent a manufacturing space
Now, this all depends on how your business operates, but you can always change it to suit this idea. Some companies will manufacture in bulk, then attempt to sell those items before manufacturing again.
The reason for this is that they don’t know how well the product will sell. If they manufacture load after load and those products don’t sell, that’s money and inventory wasted. By manufacturing in stages, you can determine precisely how much you need to build and when you need it ready for.
And this means that your manufacturing space isn’t needed 24/7. It’s only needed after you’ve sold that first set of products and are ready to create the next. By renting a manufacturing space as and when you need it, you reduce the costs of paying for a permanent, unused space.
- Switch to computer controlled machines
It’s no secret that technology, machinery and computers have advanced to a ridiculous degree. These advancements have extended to the manufacturing sector too, and the equipment used within it.
By switching to computer controlled machines like those at Mills CNC machines, you reduce the need for human interaction. Machines that are controlled by a computer don’t require personal input as much as a manual machine does, which cuts costs.
This is because humans have to be paid for every second they’re working on the warehouse floor. If you need these people less, you have less salaries to pay and more money in the bank. It’s unfortunate that technology sometimes means people lose work, but tell that to the self service checkout. It’s just healthy business.
- Lean manufacturing
Lean manufacturing involves the systematic elimination of waste from the manufacturing process. The less waste your manufacturing processes produce, the less you’ll have to get rid of. Getting rid of waste costs money – so don’t make as much!
This ‘waste’ means both literal waste products, as well as wasted time and manpower. Do you often have staff members stood around while they wait for a machine to free up? You’re paying them for nothing – buy a second machine.
Do you have a massive stock of unsold products? Manufacture less, and switch your focus to marketing and sales. Do you manufacture too slowly and miss out on orders? Look to improve the speed of your process.
All these changes, and more, can help your business make more money through efficiency.
- Quality over quantity
It’s an age-old saying, but it’s no less applicable here. If you manufacture too much, you could end up with more items than you can sell. This wastes time as well as resources, and you won’t be able to recoup that money by selling stuff that won’t shift!
By focusing on higher-quality, more expensive items, you make a bigger profit on each sale. You also need to invest in less storage space if you have less items, and you’ll need less manpower.
In general, less is more. Less allows you to focus up, and build one amazing product instead of five ok ones. The better your product is, the more likely it is to sell. If you decide to build less, you have to be sure you build something you can sell, though. Effective marketing is your friend here.
- Streamline product development
Developing the actual product will determine around 80% of its actual cost. This means that the longer development takes, the more money you need to make back. You’ll have to hike up the price of the product, and that makes it less appealing to buyers.
Again, you need to focus up. Look at the areas of development that take the longest, and seek to cut them down. If it’s actually buying in parts that’s costing you time and making you unable to meet orders, switch supplier. Instead of building a convoluted product, build a simpler, easier one. It’ll benefit you in the long run.
And there’s your list! If you’re in the manufacturing game, you’re in a precarious position. Will people buy my product? Will it work? By reducing costs, you make the effects of both those questions less financially damaging.