Tuesday, September 26, 2023

Manufacturing a Product: This Is How to Reduce Costs

Manufacturing plants have plenty of costs that they need to worry about. These costs can make their operations fairly expensive and can leave less cash flow for other important business tasks.

The good news is that there are several things manufacturing companies can do to help cut costs when manufacturing a product. Keep reading and let’s dive into how to manufacture a product the cost-effective way!

Create More Efficient Product Design

Did you know that product development determines nearly 80% of the total product cost? That’s right! This phase sets up several important decisions that go into manufacturing a product.

Since it’s such an impactful phase in the total cost of your products, this is a great phase in which you can minimize costs. A few strategies you can use include:

  • Create product designs that minimize material overhead and part costs
  • Design so that ROI doesn’t guarantee the cost for quality
  • Reduce change orders
  • Build vendor partnerships that can lower manufacturing costs

These steps can help make it easier for you to create cost-effective product manufacturing processes.

Use Lean Manufacturing Principles

Lean manufacturing principles are extremely important to creating cost-effective product design. The goal of lean manufacturing is that it helps to eliminate waste in the product manufacturing process. These principles increase labor productivity, reduce inventory, and reduce errors and scrap.

One of the things you need to know to create products that don’t require a lot of costs is the different types of waste produced by your processes. And, you need to understand how to eliminate those types of waste.

A few different types of waste produced in the manufacturing process include:

  • Transportation waste
  • Waiting
  • Motion
  • Over-production
  • Inventory
  • Defects
  • Over-processing
  • Wasting talent

As you can see, some of these forms of waste are physical while others are intangible. However, both are areas where you could be increasing your process efficiency and eliminating costs.

Standardize Parts

Many manufacturing plants use mass customization or build-to-order strategies to help them create their products. In this situation, any attempts to cut costs have to happen at the parts level. 

One way that companies using this method can cut costs is to use standardization. That’s because standardization requires that every product part has to be readily available at any point in the process. In turn, you eliminate the time needed to kit, load, or find parts.

On top of that, standardization makes it easier for you to pull parts into the assembly. It helps you cut back on how many part types are needed and lets you order parts in bulk. In turn, that can help you cut costs associated with your product parts.

Use These Cost-Saving Tips for Manufacturing a Product

Manufacturing a product is an expensive operation. However, with these manufacturing tips, you’ll be able to create affordable, quality products for your customers.

If you found this guide on product manufacturing helpful, be sure to check out our other posts. We’ve got tons of informative articles that can help you save costs and improve your operations!