Reduce Manufacturing Costs - 6 Steps
Here are 6 effective steps to reduce manufacturing costs: 1. Reduce Forklift Operating Costs 2. Lower Your Cost for Materials 3. Encourage Higher Efficiency Rates from Your ...
Here are 6 very effective steps that you can take to reduce manufacturing costs:
If you want to lower your forklift operating costs and downtime, contact us.
Follow these steps to reduce manufacturing costs
6 Steps to Reduce Manufacturing Costs
1. Reduce Forklift Operating Costs
Rent Temporary Forklifts:
You can reduce manufacturing costs by lowering your total overhead costs. Find ways that you can reduce big capital purchases, such as purchasing new forklifts.
For example, you may find that you can actually save money by renting additional material handling equipment during your peak seasons instead of purchasing extra equipment that you don't need to use all year long.
Invest in Electric Forklifts:
Whenever possible, choose an electric forklift over one that burns fossil fuels. Even though the initial purchasing cost can be higher with electric forklifts, your total cost of ownership is usually much less.
This total cost of ownership calculator can show you how much you could save by switching to an electric forklift.
PUrchase electric forklifts to save money
Choose a Lithium-Ion Battery:
If you want to save even more on your forklifts costs, choose an electric one that is powered by a lithium battery instead of a lead-acid one. Lithium batteries are virtually maintenance-free so you don't have to pay someone to water and maintain them and they don't require a lengthy cooling down time.
They are also 50% more energy-efficient than lead-acid batteries. Here’s another calculator that you can download to discover how much you could save using a lithium-powered forklift.
Automation:
You can reduce manufacturing costs by finding ways to automate processes and thereby producing products at a faster rate.
Invest in AGV (automated guided vehicle) forklifts that will efficiently operate without a paid operator. Automated forklifts can run as long as they are needed without taking breaks.
Check out this AGV forklift in action
2. Lower Your Cost for Materials
The materials that you use in the manufacturing of your product make up a large portion of your manufacturing costs. Here are a couple of ways to lower your cost for materials.
Use Economic Order Quantity (EOQ):
Economic Order Quantity is a formula that helps you figure out your optimal quantity of materials to order.
EOQ will enable you to only order the amount of materials that you actually need thus lowering the cost of placing and receiving an order. By using an EOQ you won't be tying up too much of your cash flow in inventory that you don't need yet.
Getting the right balance of materials to order is a skill, but the EOQ formula can help. The following video will show you how you can set up this formula in an Excel spreadsheet for easy calculations
Learn how to calculate the right amount of materials to order
Deal with the Best Raw Material Suppliers:
Another way that you can reduce manufacturing costs is by finding suppliers that will give you the best prices for the materials.
This doesn't mean buying inferior materials. Instead, you try to find suppliers of the quality of raw materials and ask them to give you a quote. You can then choose the one with the best material at the best price. You can also look for suppliers who offer a discount on bulk purchases.
In addition to local suppliers, you can also look online to find appropriate suppliers. Websites such as Alibaba, Global Sources, and eWorldTrade help suppliers and customers locate each other.
3. Encourage Higher Efficiency Rates from Your Staff
Encouraging higher efficiency from your workers is another area where you could reduce manufacturing costs. Here are some creative ways to get your staff to work more efficiently:
Give Proper Training: Provide specialized training that will teach your workers to work more efficiently.
Offer Great Incentives: Offer great incentives to your staff such as bonuses or time off to those who produce an average unit faster than the normal rate.
Provide Ergonomic Equipment: Provide ergonomically designed equipment and work areas that will help your workers to work better, longer, and with fewer injuries.
Encourage Innovation: Reward employees who figure out any cost-reducing techniques in production and use their ideas.
Provide your employees with ergonomically designed equipment
4. Reduce Accidents and Loss
Reduce Accidents:
Accidents and injuries can add to your manufacturing costs. Not only do you want your staff to be safe, but you also don't want to have to pay for the downtime and product damage caused by avoidable accidents.
Providing proper safety training for your staff and proper safety equipment around your facility can help to decrease the number and severity of workplace accidents.
Reduce Loss:
You can lose inventory either by misplacing it or by theft. Make sure that you employ a clear labelling and storage procedure to ensure that your materials and products don't get misplaced.
To prevent theft:
Hire security staff to check out employees and visitors entering and leaving your facility,
Keep your doors locked and put in a key card system.
Install a security system
If you are not running around the clock, employ a security guard during off-hours.
The following video explains how a key card system works.
A key card system can help reduce manufacturing costs
5. Cut Down on Waste
As a plant manager, you need to conduct periodic checks to find out what is causing excess waste and develop an effective plan to reduce the waste. Here are some different kinds of waste in a manufacturing setting that you could try and avoid:
Producing Too Soon: Producing products before they are needed means you are tying up your cash flow and your product could get damaged while it is being stored.
Overstocking: Overstocking your inventory with more products than you need also ties up your cash flow.
Production Delays: Production delays that make your staff and machinery wait around during the manufacturing cycle wastes time and money.
Unnecessary Movement: Moving people and products around unnecessarily wastes time and resources.
Defects: Defective products that need to be repaired while still under warranty wastes time and resources as well.
Production delays waste time and money.
6. Reduce Forklift Downtime
Reducing forklift downtime can help you reduce manufacturing costs. Here are some ways to cut down on forklift downtime.
Keep Your Equipment Maintained:
One of the best ways to reduce forklift downtimes is to make sure that your equipment is well maintained. You should follow the manufacturer's guidelines for regular maintenance and get any small issues repaired as soon as they come up.
Keeping your forklifts properly maintained and serviced will go a long way in preventing huge repair bills or having to replace damaged equipment. Regular maintenance can catch a small problem and get it fixed before it becomes a larger, much more costly one.
Rent Temporary Forklifts:
While your forklifts are being serviced or repaired, temporarily rent others so you don't have to stop working. A reputable forklift dealer will provide you with rental units at discounted rates while they are servicing them.
Use Onboard Chargers:
You can also use forklifts with onboard chargers so that they don't need to be out of service for charging times. In addition, purchase forklifts with faster charger times such as lithium-ion forklifts. They can fully charge in as little as 2 hours compared to a lead-acid battery which takes 8-10 hours.
Reduce manufacturing costs by keeping your forklifts well maintained
How Wayco Can Help
You can trust Wayco with all your forklift equipment repairs. Wayco can also help make sure that your forklifts are well maintained.
We can track and pre-schedule all maintenance work for you so that your equipment is properly serviced in a timely manner.
This will help you avoid expensive downtime and you won't have to remember to schedule or book your service work. We'll do it for you!
Wayco also has an incredibly fast response time so you won't have to wait to get your lift trucks back in operation. We can usually have our service tech at your location within 2 to 3 hours and we also guarantee same day service.
Wayco can also help you find the best forklifts that will reduce your manufacturing costs.
We have been in the forklift business in KW for more than 40 years and we have earned a solid reputation for being trustworthy and fair.
Our knowledgeable staff will be able to help you choose the perfect model that best suits your particular applications and we will accept your old forklift as a trade-in towards your purchase.
Contact Wayco today to find out what forklifts they have in stock, both used and new models.
“We purchased a used fork lift from Wayco in January. It was extremely clean and in excellent condition when it was delivered. We have also had incredible ongoing service from the professionals at Wayco. Overall dealing with them has been an excellent experience.”
How to Increase Manufacturing Quality and Quality Consistency in Your Plant
Discover 5 ways to increase manufacturing quality and quality consistency in your plant, including working as a team and implementing planned shutdowns.
In this post, we are going to show you how you can increase manufacturing quality in your plant.
We have over 40 years of experience in the material handling industry, and we would love to share our expertise and experience with you.
This definitive guide will outline 5 ways to increase manufacturing quality and quality consistency including working as a team and implementing planned shutdowns. So, let's get going!
Your entire team working together can increase
manufacturing quality
5 Ways to Increase Manufacturing Quality in Your Plant: Definitive Guide for Plant Managers
1. Work as a Team not as Individuals
An important way to increase manufacturing quality is to recognize that the quality of your products will not be improved by individuals; it will take the effort of your whole team to make a real, lasting difference.
When you involve employees from every area of your manufacturing process, you will get a wider variety of perspectives and ideas on ways to improve on quality and efficiency.
When everyone from each department is involved in the process, they are more likely to implement the improvements decided upon.
Develop Strong Communication:
In addition to involving different departments in the improvements, it's also vital that you develop a strong communication system between departments to make sure that your workflow is steady and that all departments are working together as a team.
Some effective ways that you can strengthen communication and the sense that everyone is on the same team is by having:
Company socials
Acknowledging excellent work performance
Team building exercises can help improve communication among your employees
Keep Morale High:
All of the above will help to build the morale of your workforce. When the morale is high in your plant, your employees are more likely to want to work as a team, do their best, and see their fellow employees succeed.
Examine Process History:
A good way to start increasing quality is to take a close look at why each step in the manufacturing process is done the way that it is.
Try to discover the reasoning behind each process and its history to learn why it was originally put in place. This information can help you to avoid problems that were encountered in the past.
By combining process history with the perspectives of your entire team, you can begin to make solid improvements.
Discover what your customers want in a quality product
2. Find Out What Your Customers Consider High Quality
Try to determine what your customer would consider a higher or better quality product. Simply making your product out of more expensive materials or adding extra features may not actually raise its value in the eyes of the consumer.
A product that is "better" from your personal perspective is not going to sell better if it's not "better from your customer's perspective. It's important to find out what your customers consider important with regards to quality and try to find a way to do it at a minimal cost.
It is helpful to have someone from your sales or marketing department determine what your customers want as they are probably the most in touch with your consumers.
It’s better to fix a defect in your product before it reaches the consumer
3. Get Your Staff to “Buy In” to the Cost of Quality
It is much more cost-effective to fix the source of a manufacturing defect before your product is actually created than it is to fix the defect once the item has reached the consumer. This is because it is very expensive to:
Replace defective products with new ones and
Restore the damage done to your company's reputation
It is much more cost-effective to fix the problem before the product is ever sold. Therefore, a great way to increase manufacturing quality is to get your staff to buy into this fact.
If your staff has this perspective, they will be more likely to look out for the root cause of possible problems, more likely to troubleshoot and prevent defects before they reach the public.
Planned shutdowns will give you a chance to review your processes and service your equipment
4. Incorporate Planned Shutdown Periods for Maintenance and Reviews
If your goal is to increase manufacturing quality, then having planned shutdown periods is a must.
During these periods, you will be better able to thoroughly review your current processes and perform necessary facility and equipment maintenance so that you can improve on your current standards,
Planned maintenance will ensure that your equipment is kept in top working condition and means that you’re less likely to have an unplanned shutdown due to costly breakdowns or accidents.
For example you can do any required maintenance on your material handling equipment as well as the equipment on your production lines.
At this time, management can also take a closer look at the quality of your products and work on ways to improve them.
Implementing standard operating procedures will help you achieve consistency in how processes and tasks are performed
5. Make Training a Priority for Your Employees
A strong training program can go a long way to increase manufacturing quality. Your employees need to be well trained on safety practices, processes, and sustaining the quality of the products they are making.
In addition, developing Standard Operating Procedures (SOPS) will help you achieve consistency in how processes and tasks are performed.
SOPs are "clearly documented, step-by-step procedures and checklists that are easy for employees to follow and greatly reduce the chances of mistakes."
SOPs are also very helpful for you as a plant manager because they give you a standard that is useful in "redirecting or disciplining" your workers.
Your employee is less likely to say "That's not how I was told to do that," because the actual process is clearly written down and has not been passed on merely by word of mouth from a trainer.
Wayco: Material Handling Equipment Repairs and Service You Can Trust
You can trust Wayco with all your forklift and material handling equipment repairs. Wayco can also help make sure that your equipment is well maintained.
We can track and pre-schedule all maintenance work for you so that your equipment is properly serviced in a timely manner.
This will help you avoid expensive downtime, and you won't have to remember to schedule or book your service work. We'll do it for you!
Wayco also has an incredibly fast response time so you won't have to wait to get your lift trucks back in operation. We can usually have our service tech at your location within 2 to 3 hours and we also guarantee same day!
Contact Wayco today to set up regular maintenance schedule.
