From the BlogSubscribe Now

Ways to Save on Manufacturing Costs

Whether you are manufacturing your own product or are mass producing products for other companies, costs can quickly get out of hand. There are so many factors that go into manufacturing that it can be difficult to make money. Producing the product is just one cost, but there are many other parts of manufacturing that can bring your profits down to nothing. Below are some ways to save serious money on manufacturing costs.

Energy Efficient

Most factories will have many machines operating at one time to produce the product that they are creating. The amount spent monthly in energy bills alone can make your manufacturing plant go into the red very quickly. However, there are ways to improve on energy efficiency.

Bringing in an energy efficiency expert can save you some serious coin. They will inform you of ways to save on your electric bills that perhaps you have never even thought of. They can also check if your electrical in the building is up to date and running correctly.

Number of Employees Needed

There are things to consider when discussing the number of employees needed for your manufacturing business. You would like enough to keep up with demand, but not so many that you have employees standing around accomplishing nothing. Maybe there is a machine currently out there that can reduce the number of employees needed at your plant as well. While you do not want to ever let go of loyal employees, if your manufacturing business is not making money, then eventually everyone will be out of work. There are tough decisions that need to be made when you are the boss.

Quality Equipment

Manufacturing plants do not always need brand new equipment in their building to produce the products. There are great deals to be had out there on quality used equipment instead of spending such a great deal of money on new items. There are numerous companies out there that deal with the refurbishing of old equipment and getting them to run like new again. It is important to find a trusted name as well as an industry leader in buying and selling used process equipment. Whether the equipment is needed for food, chemical, pharmaceutical, plastics, metal, and other equipment industries, there are deals to be had!

Lease or Buy

Unfortunately, there are several buildings empty across the globe because of closing businesses and financial hardship. However, if you do your homework, you might be able to pick up a suitable building for your manufacturing needs at a great price. If you are currently leasing the building that you are running your business in, then it might be time to purchase a building of your own. The amount of foreclosures available is a bit mind blowing. You can literally buy a building for pennies on the dollar! The best thing is the building could be just a couple streets away from your current building, but more suitable for your specific needs.

Negotiate

As a manufacturer, you are bound to have long lasting relationships with your clients, suppliers, and shipping companies. The price that they provided you at the beginning of your relationship was maybe not the very best. However, you have provided them a serious amount of business over the years. It is time to renegotiate the prices for their services.

Negotiating a better rate can be a bit awkward at first, but emphasize that you would like to continue doing business with them. They will usually step up and play ball. It is amazing what can be accomplished through negotiating when all you have to do is ask for a better rate than the one you currently have. And if they are a bit offended, just remind them that the bottomline is that you have a business to run and employees to take care of. If they don’t work with you, quietly shop around for better rates from their competitors. As long as the quality of the business is not being sacrificed, then everything should be negotiable.

Join the Discussion!

*

1 Shares
+11
Share
Tweet
Pin
Email