5 Approaches for reducing manufacturing costs

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Approach 1: Changing the product design

One approach for reducing manufacturing costs is to re-design the product to be easier and cheaper to manufacture. Design for manufacturing is a methodology to try and specifically engineer out manufacturing costs at the design stage – when key decisions are made that ultimately influence how expensive it is to produce the product. By carefully considering material choices and tolerance requirements, it is possible to reduce the costs required to produce products. 

Approach 2: Critically examining the stages in the manufacturing process

Another approach that can yield insight to reduce manufacturing costs is to critically examine all stages in the production process – both individually and as a totality. It is common in manufacturing operations for a significant amount of time to be spent on ‘day-to-day’ operation activities, with much less consideration for whether those activities are the best approach. Critically investigating why certain activities are performed may reveal unnecessary stages throughout the production process that can be streamlined to simplify production. 

Approach 3: Monitoring and addressing defects

Monitoring issues is another key element to gradually reducing manufacturing costs. it is not uncommon for production difficulties to go unnoticed, without the attention needed to resolve them. The saying “what gets monitored gets done” is particularly true when it comes to addressing production issues – without monitoring in place, production difficulties, that often add cost to the overall process through wanted time and materials, are allowed to remain unchecked. Putting in place monitoring systems helps ensure that such issues are flagged up and address. 

Approach 4: Examining whether automated manufacturing can improve efficiencies

While automated manufacturing is not necessarily the cheapest option, a large proportion of the overall production costs is often associated with the labor involved in the production process. You need not go as far as fully automated lights out manufacturing operations, but there may be simple ways of automating parts of the production process to reduce the labor associated with manufacturing the product. 

Approach 5: Developing a continual improvement mentality

Another component of reducing manufacturing costs is developing a continuous improvement mentality among your team. Employees at all levels can recognize ways of improving the manufacturing process, and those closest to the manufacturing line may be best placed to identify opportunities to streamline the production process.