How to reduce your production costs? Our advices

Control your activity

First of all, to optimize your organization, it is essential to have a global vision of the physical and information flows that circulate in your company or in your factory.

Indeed, to be able to identify where costs can be reduced, it is necessary to control your activity.

The production line: the heart of a company’s waste

In order to reduce total production costs, it makes sense to start with the production line, which is often the source of multiple malfunctions.

Identifying waste, production irregularities and excesses, known as muda, mura and muri respectively, is essential in order to eliminate them effectively.

This will lead to an improvement in product quality, resulting in fewer controls, shorter delivery times and increased customer satisfaction.

Among these malfunctions, we find:

• Machine stoppages;
• Low yields;
• Material losses;
• Travelling time;
• Quality defects;

Procurement: directly responsible for performance

The next way to save money is to reduce external costs.

This means reviewing each expense and finding better deals or changing suppliers.

It is important to compare the offers available on the market in order to choose the most profitable one.

Reducing Dormant Inventory through Just-in-Time

Another source of unnecessary expenses is excess inventory, which arises if the inventory is mismatched to demand.

To avoid this problem, it is advisable to opt for “just-in-time” production management.

This consists of waiting for the customer’s order to be supplied. This will have a positive impact on working capital and profits.

Resist over-quality

The quest for quality can sometimes lead to a counterproductive system if the factory does “too much”. Therefore, it is necessary to find a compromise between quality and cost while respecting the specifications.

This will avoid additional costs for the company.

Conclusion

By applying these tips, it is quite possible to reduce your production costs. To further promote savings, you can also adopt greener production.

This means, for example, using energy-efficient equipment or regularly maintaining your machines to keep them energy efficient.

Finally, to complete your approach, adapt your company to changes, especially to new technologies that are often a determining factor for a good performance indicator (TRS or OEE).

Finally, stay aware of possible investments for continuous improvement of your company.

Written by Emma Guignard