3 Cost Saving Manufacturing Practices

Manufacturing can be a costly endeavor and can leave those at the top constantly searching for ways to cut costs and increase profits. While there are many ways this can be done, some cost-cutting strategies ultimately harm the businesses they’re meant to help.

These three practices can help you decrease your manufacturing spend, increase your potential profits, and grow your company quickly, safely, and productively.

1. Low Cost Country Sourcing

Low cost country sourcing is the practice of looking outside your country to find supplies and raw materials at lower prices relative to what’s available nearby. Depending on your product, there is a market somewhere in the world that sells what you need at a steep discount.

You’ll need to consider hiring a consultant to help you find the right seller, negotiate your deal, and analyze the true cost of shipping, tariffs, and other costs you may not expect. But if you can find the right deal you can decrease your costs and increase your margins quickly.

2. Reduce Energy Consumption

When you go green, it can cost money upfront. Often, retrofitting a factory floor can be expensive. The savings you can realize on your energy costs down the line and over the life of your building and equipment can be substantial.

Simple things like installing energy-efficient lighting, replacing old HVAC units, or more efficient scheduling for your high-powered machinery can make a big difference in your bottom line. Consider looking into a cost-benefit analysis of these and other green changes to your practices to see where you can save on your monthly bills. 

3. Sell Your Scrap

In every manufacturing process, there is waste. What you do with that waste can either make or cost you a lot of money. Whatever your waste byproduct, there is likely a scrapyard or recycling company out there that will buy it from you. Better yet, another manufacturer may need just what you’re throwing away and be willing to pay.

When you do the legwork to find a buyer for your company’s scrap, your bottom line will move in two ways.

First, you’ll profit from the sale of your scrap. Even a little bit of profit per volume will be more than you’re making now. Secondly, the disposal of this waste is often a big expense for manufacturers. Eliminating that line item means more of your company’s money stays right where it belongs.

Manufacturing is expensive, but it can be less so. Finding the right practices to save your company money can be hard. You’ll likely spend time and money getting these practices off the ground. Don’t let that stop you.

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