Although many people perceive manufacturing as a passive activity, where companies produce the same thing for years and years, these processes can be quite dynamic. This is especially true nowadays when businesses are facing global competition, relatively open borders, and have access to various software and equipment that can further improve their internal processes.

Like with many other types of businesses, small things matter with manufacturing. Simply switching to cheaper office supplies, or purchasing a temporary structure, can have a major impact on your bottom line at the end of the fiscal year.

1.   Reducing overtime

Labor costs are among the biggest expenses not only for manufacturers but also for other types of businesses. In certain cases, additional work hours can accumulate over time, and although it might seem that you’re increasing productivity, you will actually start losing money.

Simply put, the more people work, the less productive they are. However, these additional work hours are often paid extra, so you’re basically getting less by investing more. The great thing about reducing overtime is that it will also reduce employee burnout. Unfortunately, some people do rely on these extra incomes, so not everyone will be happy with the decision.

2.   Reducing downtime

Every major manufacturer is trying to reduce downtime. Often, a company can gain a decisive advantage over its competition by simply utilizing its resources in a more productive manner. The same goes for companies that utilize a lot of energy and produce enormous waste.

Keep in mind that you’ll never completely eliminate downtime. Equipment breaks down, and other unexpected things will happen over the course of the years. However, there are a few ways to reduce it, such as investing in safety training, implementing the right processes, performing periodic maintenance, etc. If you create a good schedule, you can even perform some of these activities off the clock.

3.   Relocate to another country

The practice of relocating to cheaper countries is nothing new. It is something that companies have implemented for decades and decades. Like in the past, this is something you should seriously consider as a business owner.

The main reason why you should do this is to reduce the cost of labor. However, by setting up the first manufacturing plant of its kind, you have the opportunity to tap into the local market. As such, you can create a dominant position in the region and grow together with it.

Unfortunately, this also poses a few challenges. Most underdeveloped countries are underdeveloped for a reason. They often have a high degree of political and economic risk. At the same time, the country might not have the proper infrastructure that would allow you to transport the materials and products.

4.   Lowering material costs

The cost of the final product will be directly correlated with material costs. It is one of the biggest expenses per unit, and you can reduce these prices through negotiation, increasing orders, or finding cheaper replacement materials.

Among others, reduction of material costs is very important for industries where there is a lot of waste. In terms of potential problems, a lot of manufacturers will have to face the fact that these cheaper materials are usually worse, which can reduce the overall product quality.

5.   Aligning strategies

Often, manufacturers lose money because their departments work as separate units. While each one of them requires autonomy, they should also be able to act as a part of the whole.

In that regard, one of the better ways of cutting costs is by aligning strategies. This is especially important for businesses that constantly change their processes. So, when implementing something new, you should consider how this affects different sectors and their interactions.

Through alignment, you can bring more transparency to your organization. Ultimately, this will give the management more control over the processes, allowing for better adjustments. Most importantly, you can maximize the company’s potential.

As for the potential drawbacks, aligning strategies usually takes some time for implementation. Your employees might struggle with these new rules, which can also affect their productivity. The same goes for your managers who will have to learn from their mistakes.

6.   Investing in software

Manufacturing software can give your company a decisive edge over the competition. You can utilize it for just about anything from inventory to logistics.

These programs are stored on a cloud, which allows you to avoid investing in additional departments and servers. All you need to do is pay a monthly fee, and you will get a continually-updated tool.