Five Ways for Small Manufacturing Companies to Cut Costs and Stay Competitive
It can take a lot of effort for small manufacturing companies to stay competitive in the market.
But by finding ways of cutting costs, small manufacturers can invest those savings into areas like marketing. They may even be able to pass on their savings to their customers. In turn, it will be easier to make a splash in the industry and remain competitive.
So, if you run a small manufacturing company, here are five ways in which you can cut costs.
#1 – Adopt New Technologies
From robotics to artificial intelligence, there are multiple technologies and emerging technologies that can help you automate processes like inventory management, helpdesk support, data migration and aggregation, sales orders, payroll, invoicing, and time and attendance tracking, to name just a few.
By adopting software and other tech that can automate daily processes, you can quicken tasks, which will lead to greater efficiency.
Technology can also make processes much more reliable, which means fewer mistakes will happen. Again, that will increase efficiency. Ultimately, that means you can make significant savings.
#2 – Perform Periodical Preventive and Predictive Maintenance
You have probably heard the expression “If it isn’t broken, don’t fix it.” Well, that philosophy should not be applied to your machinery. To ensure machines don’t suddenly break, which would have a massive impact on your productivity and ability to make profits, employ periodical preventive and predictive maintenance for every machine and item of equipment.
That could involve doing things like replacing filters, lubricating parts to avoid a build-up of rust, and checking for vibration anomalies, to name just a few tasks. By performing preventive and predictive maintenance, and ensuring you have a complete list of maintenance tasks that need to be carried out that is always followed, you can avoid downtime and repair costs.
#3 – Buy Used Equipment (e.g. Waterjets) Where Possible
When machines do fail and need replacing, as will happen from time to time, or when you decide to get a new type of machine or piece of equipment for the machine shop floor, you can make substantial savings by purchasing used equipment where possible. And by getting an item of equipment that you didn’t previously own, such as a waterjet, you could get a great return on investment with a used waterjet, for instance.
Most types of equipment are available to buy second-hand. Just make sure they are in full working order. As long as you go with a reputable vendor, you can ensure the used equipment you purchase is just as good as new items.
#4 – Look at Ways to Save on Energy Costs
Every manufacturing company needs to spend a lot of money on energy for operations to function. But there could well be ways in which you could save on energy costs. So, spend time examining every way in which energy is used by your company to identify ways of cutting costs.
For instance, you could:
- Switch to LED lights.
- Install smart thermostats and sensors.
- Invest in energy-efficient equipment
- Strategically schedule the use of machinery.
- Turn off equipment when not in use.
- Improve Your Logistics to Save on Shipping Costs
Logistics and shipping costs could be inflating your costs without you realising it. For example, you could be moving items around more times than they need to be transported due to the system you have in place with fulfilment centres.
Wasting resources and time and having a high risk of damage to your products are never good. So, look at ways in which you can minimise the time and distance that you spend transporting your products. You may find it is better to provide shipping services in-house rather than outsourcing.