Manufacturing margins are under continual pressure, so here are more key tips to make sure your profitability is solid and will grow.
Energy has been getting more and more expensive and continues to be one of the largest costs of the manufacturing process. Further detail can be found at the government’s review of energy costs in the context of the manufacturing industry.
By shifting production away from keeping things running at capacity towards a more demand-driven process, energy use can be scaled to manufacturing output to match orders rather than continual steady demand even in slack periods. By reducing production in slow periods, considerable energy savings can be made.
Good maintenance and husbandry of start-up and warm-up procedures for equipment will also reduce energy costs, supplemented with recycled and green technology systems and improvements.
Work Smarter Not Harder
Even at capacity, review the overall manufacturing process. Are there parts of the system that could be automated? Technology evolves constantly, and there may be better ways of doing things or equipment that could save time and simplify tasks, allowing labour to be focused more effectively and profitably.
Look at the product range and review the way that they interact with each other – for example, galvanised steel spiral duct and the fittings, such as Dustspares galvanised steel spiral ducts.
Waste Not, Want Not
What happens to waste, whether it’s offcuts of galvanised steel spiral duct or by-product? Can these be sold or recycled and renewed? Have a look at what goes into the bins. Is this of value to others who would be prepared to pay for it?
Renegotiate All Contracts
Whether it’s suppliers, logistics, packagers or anyone else that you deal with, long-term relationships are valuable but that doesn’t mean that fair deals cannot be struck. Review your contracts with all areas of supply and see if you cannot improve on the rates.
Judicious management of your cost base as a whole will improve profitability, but keep an eye on quality. Making more at better margins is good practice but not at the price of losing customers because you are turning out inferior products or providing a poor service. Securing the longevity of your business can also be seen as a long-term strategy for preserving your profitable future.