Ideas for Cost-Reduction in Manufacturing

Reduce Labor Costs

• can be generated by lowering the dollars paid to factory workers or by making workers more efficient
• can obtain low cost labor by unskilled labor
• decrease labor costs is to improve the efficiency of experienced labor
• eliminate the wasted steps in the process
• reduce time required to produce average unit by providing specialized training that allows employees to work at a faster pace 

Reduce Material Costs

• to procure materials for less money
• find ways to use less material in building process
• purchase materials in large lots to drive down unit costs
• research and determine which one to purchase for production

Reduce Overhead Costs

• building, utility, supply, storage, handling, travel, supervisory and administrative cost all add to manufacturing costs
• set budgets for these support costs and review them on a weekly, monthly and yearly basis
• keep debt and interest expense as low as possible
• review and shop for the lowest employee benefit cost each year
• monitoring tooling and supply cost, keep them in a secure area to deter loss 

Invest in Capital 

• the way to save money is to spend money
• investing in equipment that makes the manufacturing process faster 
• able to lower the production cost in the long run
• machinery that uses less material can also lover costs