Tips To Keep Production Costs Low
With the economy struggling there are several companies that are having a hard time with the things that are hard to control like overhead expenses. Production costs are one of the things that you need to really look at as they can be a high cost to your company. Production needs to be something that you consider as you are trying to cut costs and to find a way to really save money for the company. Production costs can spiral out of control if you do not manage them and get on top of them quickly. However there are programs and things that you can use in order to keep your production costs low. Here are some tips that you need to follow.
Tip # 1 - Development of your products
One of the reasons why your production costs could be out of control is due to how much money you are spending on moving your equipment and change over times. This often comes from the way you have designed the products in the first place. You have to really focus on making the development of the products easy for the production line to manage. Quick changeover times are going to help with product costs. Keeping the overall process simple is one of the best ways in which you can save money on your production costs. Smarter designs will give you the best option possible to keep the costs as low as you can.
Tip # 2 - Organized
A great way to help you with production costs is to manage the shop floor properly. You need to organize your floor so you are not dealing with wasted time. The systems should be set up in a way that is easy to move from area to area and to limit the amount of time your employees spend on getting supplies that they need to do their job. Having an organized shop floor will give you the right type of advantage you need to limit wastes and keep your costs down.
Tip # 3 - Inventory Control
If you want to keep your production costs low you have to look at how much money is being wasted in your inventory. Inventory is something that can be a huge hindrance to your company as you end up having too much money tied up in your cash flow. What you need to do is to use Just In Time manufacturing. What this will do is help you to limit how much inventory you have and you make the products to order. This way you do not have wait times and other things that increase you costs. You also do not need to have expensive warehousing costs to store all of the inventory that you need to sell.
Tip # 4 - Standardize Procedures
Want to keep your costs low? How about you focus on creating standardized procedures as much as possible? You need to have a system in place that will really standardize your procedures to allow for things like bulk buying along with other things as well such as automating your inventory so you have reorder points and you do not need to work with vendors to have timely deliveries and other things. Standardization also cuts down on your salaries as you will not need to have as many people on the production line to keep it running properly. Instead you can have the software program help you to get it done without defects.
Tip # 5 - Simple Goals
Production costs can be lower when you establish attainable goals. You need to have goals for the supply chain that will allow you to complete your projects on time. Lean manufacturing is a great system to consider in order to help you with cost reduction and other things to maintain quality and meet your goals.