How to Reduce Overhead Costs in Manufacturing

Nov Blog 1 - reusable materials for industrial manufacturing settings

You can save money for your industrial manufacturing business by implementing tips and tricks to reduce manufacturing overhead costs. Investing in new machinery and outsourcing your industrial recycling solutions are just a few examples.

10 Ways to Reduce Manufacturing Cost Reduction

1. Develop a Plan

Develop and review your strategic plan on a regular basis. Set goals and a roadmap. Analyze your business environment, talk to employees, and review the operation of your business. An overall, encompassing plan will help you develop techniques to reduce overhead costs in manufacturing as you move forward.

2. Introduce Best-Practice Solutions for Improvement

Look into lean manufacturing initiatives, such as Six Sigma, that will help employees develop complex work routines. You should also develop a standard operating procedure (SOP) for all processes in your organization. That way, you can seek ways to improve them for cost-cutting reasons.

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3. Improve Reception and Dispatch Process

Every manufacturing facility’s logistics department should be doing its part by handling processes related to delivering goods and products. By streamlining the logistics process, you can guarantee that goods arrive on time and in safe conditions. The less time it takes for the department to efficiently receive goods, the more money you’ll save.

4. Invest in Equipment and Machinery

Investing in updated tools and heavy machinery will be cost-effective for your business in the long run. Once you replace obsolete equipment with fast, efficient equipment that ramps up production, you’ll get a significant return on your investment. Updated equipment increases production speed, has flexibility, and produces a quality product.

5. Implement Preventative Maintenance

Developing and implementing a preventative maintenance strategy is essential for industrial cost-cutting. It’ll cost less to maintain equipment than it will to wait until you experience a system failure that results in production downtime A preventative maintenance plan should include solutions for:

  • Lubricating equipment
  • Technical cleaning
  • Replacing filters and spare parts
  • Bearing changes

6. Reduce Material Costs

When material costs are high, find ways to use less materials. One way to reduce material costs is to consider recycling solutions. Industrial laundering services help save you money on reusable cleaning materials and personal protective equipment (PPE) such as gloves, aprons, jackets, and safety vests.

Here at Closed Loop Recycling, we offer a wide range of recyclable materials to reduce the amount of waste your business generates. Recycling laundry services also save money on inventory. Whether you work with hazardous materials or liquid waste, protective gear is crucial for many industrial manufacturing companies. We’ll ensure that you have all the PPE laundering you need to save money and increase your PPE’s lifespan.

7. Review Labor Costs and Manufacturing Overhead

Labor costs should be reviewed regularly. You can balance out the costs by hiring employees who can multitask, resulting in productivity and cost savings. Use your human resources department to increase productivity, too, by training them in tasks that increase efficiency and the overall production process.

8. Focus on Running Your Business and Outsource

Leave operations unrelated to your business to outside vendors. Resources, like machine and building maintenance, cleaning and recycling solutions, and transportation and distribution, should be left up to companies specializing in those fields. Take the time to focus on the core of your business, and leave necessary extracurricular operations up to outsourced vendors.

9. Promote and Pursue Improvement

Make your team members aware of ways you’d like to improve your company that will lead to cost-cutting. Establish key performance indicators (KPI) that will have a direct impact on your business. Drive key employees to success by offering incentives when they reach their goals.

10. Involve Your Staff in Company Life

More often than not, company staff usually knows the day to day operations better than the business owner. Ask them directly about opportunities for improvement that could lead to cost-savings. Involving your employees will make them feel needed, resulting in improved well-being and performance.

Start Saving With Closed Loop Recycling

CLR offers recycling solutions for several industries, including aerospace, automotive, packaging, and metal stamping for St. Louis and beyond. No matter what industry you’re in, we’re the recycling experts. We offer best-practice solutions for cleaning various PPE, such as gloves, sleeves, aprons, jackets, and safety vests. When you choose CLR, you’re choosing a company that believes in recycling just as much as you do. We’re here for a purpose, and that purpose drives multiple results, such as cost savings, clean equipment, and environmental impact. Contact us today to learn about how we can help your company with our recycling solutions.