Specialists in Aerospace Safety, Control and Automation Systems.
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reducing manufacturing costs

The future of any manufacturing business is linked to the sustainability of their operations and the cost thereof.

When looking at methods of reducing manufacturing costs there are a number of ways though which it can be archived.

  1. Reduce Material Costs
  2. Redesign of Product
  3. Lean Manufacturing Techniques
  4. Process Control Improvement
  5. Automation

A company's main focus is often on cutting costs, sadly this quickly reach a point where it is no longer possible or in fact in the case of material cost reduction has a direct effect on sales.

An example of this is Cadburys who in 2015 made an announcement that left even the most hard-boiled chocolate lovers feeling a little scrambled. The confectionery giant made changes to their popular Creme Egg recipe, replacing the Dairy Milk shell for standard milk chocolate. The news left everyone feeling shell-shocked to say the least with a direct impact on sales with the Birmingham-based company announcing in Easter 2015 LOSSES of £10million, a fall of around 5%. 

As we can see here thought is required when reducing costs and it best to use a tandem strategy of cost reduction and performance improvement.

Interestingly, two of the best-known improvement initiatives align very well to these two approaches to reducing cost (and increasing profitability):

  • Lean Manufacturing - Spend less by removing unnecessary waste
  • Theory of Constraints - Removal of the weakest link

reducing manufacturing costs by removing the weakest link

The Theory of Constraints(TOC) is based on the theory that the achievement of a goal is a is limited by one constraint ( something that prevents you achieving your goal).In manufacturing this is often referred to a bottle neck.

The Theory of Constraints is a purely scientific approach developed by Dr Eliyahu Goldratt . It is the theory that all process are linked and that  the weakest link is the core point of failure. It uses a powerful set of tools for helping to achieve that goal:

  1. The Five Focusing Steps
  2. The thinking Process
  3. Throughput Accounting

DR Goldratt set out his theory in his book "The Goal" which was written in 1984.Since then it has continued to grow and evolve and is today on of managements best practices.

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