How Manufacturers Can Reduce Costs Without Sacrificing Quality

For business owners from all industries, cutting costs is often a top way to grow profits. However, it’s vital that companies don’t cut corners in an effort to save money. Reducing expenses should come by way of working smarter, optimizing processes and leveraging technology. This combination can help to deliver value without compromising quality.

Especially for Canadian manufacturers across sectors like solar, oil and gas, mining and automation, a disciplined approach to cost control can mean the difference between leading the market and lagging behind. So what can manufacturers do to reduce costs without sacrificing quality?

Streamline your supply chain.

There are numerous benefits to having an efficient supply chain. They include the reduction of lead times, inventory carrying costs and the risk of stockouts. It’s wise to start by evaluating your current suppliers for cost, quality and reliability. Where possible, consolidate orders to increase volume discounts. You should also work with suppliers that can provide multiple product categories.

“Periodically evaluate the performance of key suppliers with scorecards, and periodically scan the market for better and/or more cost-effective alternatives,” encourages the Business Development Bank of Canada, “While you want to nurture strong relationships with suppliers, you don’t want to become captive to them.”

Embrace lean manufacturing.

Lean manufacturing focuses on eliminating waste. That could include excess motion, overproduction, waiting time or defects. Make simple changes. We’re talking about things like rearranging a workstation for better ergonomics or adopting just-in-time inventory practices. Doing so can yield immediate savings.

“Lean is such an effective method of implementing change because it helps identify weaknesses or processes that no longer add value,” insists Ryan Tax Firm, “By targeting and reducing these problematic areas, businesses can dramatically increase their competitiveness.”

Invest in preventive maintenance.

Unexpected equipment downtime is costly. It results in lost production and emergency repair expenses. To mitigate this issue, implement a preventive maintenance schedule. It should keep machinery operating at peak efficiency. Smart sensors and Internet of Things (IoT) monitoring can alert you to potential issues before they escalate. This will minimize disruptions and extend asset life.

According to Brightly Software, “preventive maintenance advantages are tangible; it can reduce costs by 12-18% and generate a remarkable 400% return on investment.”

Optimize energy use.

Energy costs are a significant line item for many manufacturers. Conducting an energy audit can identify opportunities to save. Consider upgrading to high-efficiency motors, optimizing HVAC systems and recovering waste heat from production processes.

“Manufacturing firms report average energy cost reductions of 40% after implementing solar solutions through the Industrial Energy Management Program,” reports Sherry for Business & Industry Canada.

Take advantage of FluxLab™!

With FluxLab™, we become an extension of your engineering team. Our multi-level technical engineering support ensures that customer needs are met. With the help of FluxLab™, you’ll be able to design a product to be deployed in the harshest of environments, reduce costs through part number rationalization and ensure production quality standards. Partnering with Flux Connectivity early in the product development process can result in higher ROI.

For more information, please don’t hesitate to give us a call at 1-800-557-FLUX or email us at connect@fluxconnectivity.com. You may also fill out the form on our Contact Us page!