7 Rules for Making Manufacturing More Cost-Effective and Sustainable

The manufacturing industry was always been the foundation of the economy. According to a 2020 survey, the manufacturing sector contributed as much as 24% of the USA GDP while the period between 1994 and 2019 recorded a stable annual growth of 2.4%. So, we can summarize that circumstances for starting a manufacturing business are more than favorable.

Still, running a successful company requires consideration of much more varied factors. For instance, the current business landscape is dictated by the pursuit of sustainability and cost reduction. The manufacturing industry which is one of the biggest consumers in the field is especially prone to efficiency problems.

In such circumstances, staying competitive and carving the piece of the market will be determined by your ability to cut the costs of production and keep your company lean. Let us take a look at a couple of tips that should help you along the way.

Start applying lean manufacturing principles

The problems we have mentioned above are hardly a new problem – the manufacturing industry was finding new ways to optimize and refine its production for decades now. All these efforts, strategies, and guiding ideas are now summarized in a couple of simple manufacturing principles:

·         Less resource

·         Less equipment

·         Less human effort

·         Less time

·         Less space

Trying to build your manufacturing strategy around these five simple principles is a great way to build efficient ideas directly into the core of your company and set strong foundations for later efforts.

Make saves on energy costs

Unrestrained energy consumption is one of the biggest detriments of the industrial sector. According to recent research, the industrial sector consumes as much as 54% of the world’s total delivered energy. That is why addressing energy wastes should be one of your utmost priorities. You can start your efforts by conducting a thorough energy audit, replacing the old fixtures for energy-effective LED lights, installing smart thermostats to control cooling and heating, and investing in more efficient manufacturing equipment.

Put more effort into inspection and maintenance

The equipment that is not regularly maintained tends to degrade as time goes by losing a great deal of its initial operational efficiency. The margins for improvements in this regard are more than plentiful and can be found in seemingly all areas. For instance, if we take a look at the petroleum industry we will see that the regular Sulfatreat H2S removal treatments are doing a great job in slowing down the corrosion and keeping the equipment at the optimal level of performance. Being as thorough as possible will naturally give birth to the best results.

Introduce a higher level of quality control and standardization

Doing this will open you the way to multiple benefits. First and foremost, quality control makes sure you are always delivering the best possible product to your customers. Second, standardization takes the chance out of the manufacturing, optimizes the process, and considerably reduces the associated wastes. Last but not least, both these assets give you a solid manufacturing template, you can later optimize and fine-tune according to current necessities. But, to do that, you have to have some starting reference point.

Implement automation and AI inventory management

Although human ingenuity and labor can never be replaced, the fact remains that artificial intelligence is much more efficient in data processing and running precise standardized operations which makes it ideal for manufacturing processes and inventory management. If we are to observe this issue through cold numbers we can find a 2015 forecast claiming that as much as 64% of manufacturing labor can be replaced with automated technology and robotics. This transition could save up to $478 billion in billable work hours and $2.7 billion in labor costs.

Rationalize product line and prioritize ROI

Strong market performance requires a strong and diverse product portfolio. However, there is a point when keeping some products on the line is no longer viable even if it creates a marginal profit. In most cases, 80% of the company’s revenue is generated by 20% of its clients of products. That leaves you with 80% of work hours that are essentially going to waste. Your goal, therefore, should be to identify that 80% of products that are driving the strongest ROI, put your focus on them, and gradually drop the least-profitable products from production.

Make the manufacturing processes adaptable

Last but not least, you have to be aware that the problems of the manufacturing industry can’t be solved with one-time fixes. If you want to be successful you need to set up your company for the process of continuous evolution and improvement. The best way to do that is to make the important production nodes compartmentalized and mutually independent. This way, you can always perform quick upgrades without disturbing the workflow. Putting your long-term goals into the written form will allow you to break these ideas into concrete moves and make them a part of your annual strategy.

We hope these few ideas gave you some general outlook about the strategies you can implement to make your manufacturing company leaner and more efficient. In this day and age, having the best product on the market is no longer enough. The world is striving for efficiency and sustainability and companies who are not able to meet these demands will be left lagging behind. The only way out of this problem lies in continuous improvement. These strategies give you a perfect place to start.