In today’s competitive landscape, reducing manufacturing costs is critical to staying profitable. But what if redesigning your product isn’t an option? The good news is there are proven strategies to streamline processes and optimize materials, all without fundamentally changing your product.
Here are seven practical ways manufacturers can cut costs without compromising quality or functionality.
1. Switch to Rivets Instead of Screws or Welding
Fasteners and welding are necessary but can be costly and time-consuming. Swapping screws or welding for rivets is a smart alternative.
Why it works: Rivets are faster to install and often cheaper than screws or welding. They also reduce assembly time, which translates to lower labor costs.
Example: Screws take more time and eye coordination from production employees than rivet guns.
2. Replace Bearings with High-Performance Bushings
Bearings are essential for smooth motion, but they can be expensive and require ongoing maintenance. High-performance bushings are a cost-effective alternative.
Why it works: Bushings are less expensive, easier to install, and require minimal maintenance compared to traditional bearings. They’re especially effective in applications where loads and speeds are moderate.
Example: An outdoor equipment OEM had 12 bearings in their product, which was constantly exposed to harsh, outdoor environments. The previous concern was performance of polymer bushings. As the test results came back, the bushings lasted longer and 1/10 of the cost of steel bearings.
3. Reduce CNC Machining
CNC machining is precise but often overused, adding unnecessary costs. Machinists LOVE to machine. So very often, they suggest more machining.
There is always setup time, end mills that break, clamping and fixturing headaches etc. Get creative! If you can update your part for laser cutting or low volume stamping, it reduces machining time or consider alternative processes.
Why it works: Less machining means lower material waste, reduced cycle times, and fewer hours spent on production. Look for opportunities to substitute complex cuts with simpler profiles or pre-fabricated components.
Example: A military OEM was received a laser cut plate part then putting into a CNC machine. After reviewing the file and process, it was determined that we can update the laser cut file, keep the precision needed, and go straight to assembly. We removed CNC machining completely and saved a week's lead time.
4. Consolidate Operations, Machinery, or Equipment
Reducing the number of operations or equipment required in your production line can yield significant savings.
Why it works: Fewer steps mean less labor and energy costs. Simplifying workflows or combining tasks into one machine process can also improve efficiency and throughput.
5. Evaluate Suppliers or Resources
Suppliers play a significant role in your cost structure. Periodically reassess your supply chain to ensure you’re getting the best value.
Why it works: Changing to a supplier with better pricing or shifting to a local supplier to reduce shipping costs can immediately impact your bottom line. Building strong relationships with suppliers may also unlock volume discounts or exclusive deals.
Example: An OEM kept falling behind and could not produce fast the part consistently and fast enough. After reviewing the process, they were using a manual mill and needed to produce thousands. We found a new local machine shop supplier that was cheaper and faster.
If you have a manual mill, don't try to be a production machine shop and keep everything to compete on price.
6. Automate as a Last Resort - What? Why?
Automation can dramatically improve efficiency, but it’s often a substantial upfront investment. It is great for established, long-term product lines and not recommended for new, pre-launch products. New products inevitably have changes and you don't want to be locked into tooling and a machine that hinders a better design. Additionally, if you have to change, it often requires new programming and/or fixture design which adds cost and time.
Why it works: Automation reduces long-term labor costs, improves precision, and scales production. However, its high initial cost means it should only be pursued once simpler optimizations are exhausted.
Example: A pitfall I have seen several times is that OEM's and fabricators invest in robots only to find that after the purchase, 85% of their products don't fit in the work cell or they make only 50 units per year. The ROI and the economics must be justified.
Final Thoughts
Reducing manufacturing costs doesn’t always require redesigning your product or moving to low-cost regions like China. Small adjustments to materials, processes, and suppliers can create significant savings over time.
By adopting these strategies, manufacturers can boost profitability, improve efficiency, and remain competitive in today’s demanding market. Start small, measure the impact, and build on successes to create a leaner and more cost-effective operation.
Which of these strategies could work for your manufacturing line? Share your insights or reach out for a deeper discussion!
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