Some non traditional cost cutting measures in manufacturing facilities

Question

Dear Experts ,

Can you list some non traditional Cost cutting measures specifically in manufacturing facilities ( apart from the traditional rent negotiations/ reducing labor etc. )

Answer 1

Some ideas below:

1) Assess factory floor layout and redesign according to lean principles (this can be done at different levels of cost) to increase yield, reduce switching costs

2) Manufacture during low electricity cost hours (if they do not have a flat tariff)

3) Re-distribute production across different factories according to relative production efficiency

Hope it helps,

Andrea

Answer 2

Hi,

A lot of areas with different initiatives inside:

Outsourcing the support functions
Purchasing optimization
Capex optimization
Shared services for sg&a
Lean production (Although it's a lot about labor)
Defect rate optimization
Maintenance optimization
Transportation
Utilities optimization

Best

Answer 3

I propose the following structure:

1. Labour cost

Reduce number of employees: improve automation, training.
Reduce cost/employee: reduce salaries, overtime, contribution of company to health insurance

2. Equipment cost

Reduce number of equipment: reduce idle time, increase utilization rate.
Reduce cost/equipment: reduce depreciation, maintenance, economies of scale.

3. Raw material

Reduce number of raw material units: reduce waste.
Reduce cost/raw material unit: reduce inventory, renegotiate with suppliers.

4. Energy consumption

Reduce number of energy units: introduce measurements to reduce energy consumption, renew equipment, improve maintenance.
Reduce cost/energy unit: renegotiate with energy suppliers, increase energy consumption during valley period, self-production.