Are you a factory owner looking to bring down the working costs in your manufacturing facility or factory?
Do you know how you can save on overhead costs, improve efficiency and increase productivity?
Have you tried exploring better maintenance plans, areas like digital marketing to promote yourself?
In the past few years, while consumption patterns have increased, manufacturing units have been struggling with higher costs. These higher costs involve the increased prices of raw materials, wages, and electricity bills, more taxes and licensing renewals.
At the end of the day, entrepreneurs who are already struggling to provide quality at good prices, end up becoming unprofitable. In this article, we speak to some successful factory owners and entrepreneurs who are into manufacturing.
We specifically focus on areas where bringing down costs is possible. However, before we get to the list, let us look at some challenges factory owners are facing in current times.
What are some Problems affecting the Manufacturing industry in 2020?
One of the major problems plaguing the manufacturing industry and entrepreneurs is rising costs. This means that the rising costs of raw materials is adding to major stresses and worries.
In addition, the growing protectionism between economies is also not conducive to manufacturing.
Entrepreneurs seek out vendors, which deliver raw materials at the best quality and at affordable prices. This helps them keep the prices down of the finished products for the consumers.
However, growing local taxes, corruption, and bad international relations are all contributing to unsustainable manufacturing.
The hostilities between major global superpower economies in the last few years have also contributed in a major way to disruptions and free trade activities. This has forced many entrepreneurs to cut costs elsewhere.
5 Ways Entrepreneurs can bring down Factory Costs: The List
- Looking after the Maintenance of your Machines-
Ignoring or neglecting the service conditions of your machines is something any entrepreneur should prevent. Machines involve heavy investments. It is important that you look after the health and service in order to save yourself from additional breakdown costs later.
Just by paying attention to elementary things like setting a reminder to get an annual boiler service, changing gears and panels, etc. your machines can have a much longer life. Entrepreneurs need to remember that money saved is money earned.
- Exploring Cost-Effective channels of Marketing-
Factory owners and entrepreneurs have often relied on OOH models of advertising and marketing. However, in the past few years, newer avenues like digital marketing have come to be very affordable and targeted channels of promotion.
Factory owners should look to make the transition towards digital platforms in order to cut costs (traditional models of advertising are expensive). Also in terms of ROIs, digital marketing is targeted, controlled and offers greater returns.
- Saving on Packaging and Transportation-
Packaging and transportation are two areas, which incur heavy revenue spends on manufacturers. Most manufacturers do not pay attention to these areas and continue with them for many years at a stretch. This is not a good idea as it can lead to waste.
Entrepreneurs should always carefully examine packaging and transportation costs. They should keep negotiating with multiple vendors in order to bring down the final costs as much as possible. While these are small steps, they add up in a significant way down the line.
- Have a mix of Full-Time Employees and Contractual Workers-
We all know how many benefits full-time employees get in the manufacturing industry. However, with rising costs, it is best to have a mix of contractual workers with full-time employees. This will help you get the right balance and cut down on costs.
It is not advisable that you only have contractual workers in your factory. This can lead to many problems. Full-time employees are loyal, committed and dedicated. They also spend their lifetimes working in a single factory. However, entrepreneurs should look to save some money by employing contractual workers as well.
- Use Data and Technology to bring Efficiency-
Young entrepreneurs and second or third-generation factory owners are now working with technology and data to give them an edge. This is great as data helps in making informed decisions. It also helps in streamlining work and improving efficiency.
Taking help from technological advancements in any field directly helps in improving revenues and contributing to profits. It also helps in avoiding duplication of work, as well as improving productivity at all levels and verticals in an organization.
Young Entrepreneur, Adam Guild suggests that reading books can positively effect your attitude towards the life and any Business you are in.
Conclusion
If you are a factory owner looking to turn around your fortunes, you might get some help from this article. The challenges of running a profitable industry will always remain. However, if you are smart and able to adapt to the changing realities, you will always make your business grow and prosper.
