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17 Smart Ways to Reduce Production Cost in a Workplace

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How to reduce production cost in a workplace
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Right now, see yourself as an entrepreneur who is a production manager in a factory or an industry, what would be your best ways to reduce the production cost of the business in order to increase profits?

The sole purpose to start up a business is simply to offer services or sell products to customers to make money and profits in return.

Hence, a good production manager will try to cut down cost and increase profits.

This way the business will keep growing, he will be able to pay workers salary and sustain the business continually at profits.

Therefore, let’s check out some of the best ways to reduce production cost and maximize profits as a production manager, an entrepreneur or a business owner.

1. Avoid Waste:

Nobody likes waste, it add losses and reduce the profit margins in a business.

By all means try to avoid wasting production materials, avoid wasting energy at work and avoid wasting time during manufacturing.

Waste is of no use and will bring a downturn to your business.

Take a good estimate of what you need and stick to it. Also ensure materials are used at the right time for the right purposes.

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2. Hire the Right Workers:

Sometimes the best are not always the right people, hence when recruiting your workers, check for those who can help you drive your mission to possibility.

When you work with the right people, you can always achieve your goals.

Hence, look out for workers who understand how production works to help you reduce cost.

Learn how to hire the right people for the job, it will help you save production cost because you will pay more money and exhaust more time to teach the wrong workers.

3. Train and Equip Workers:

If you don’t understand the details of your business, you’re going to fail.

Jeff Bezos is an American entrepreneur, media proprietor, investor, and computer engineer. He is the founder and executive chairman of Amazon

It’s not enough to hire people to work for you; you must train them and equip them for the job if you desire good performance at work.

Hence, train workers and educate them on the do’s and don’ts of the job.

This will help your work go faster and easier thereby reducing cost of manufacturing.

Give training to workers enlightening them on how best to do the job.

Training will give them more knowledge on how you want the job to be done and also boost their confidence.

ALSO READ: 8 Killer Truths You Should Know Before Quitting Your Job.

4. Give Target Incentives and Bonus:

Everyone likes to be appreciated for a job well done.

You can give incentives to workers for meeting up with production targets and for keeping good work ethics.

This has a psychological impact on how workers think.

When people know you appreciate their job, they become motivated to put in their best.

Incentives and bonus helps to boost workers morale to put in their best at work.

You can reduce production cost when workers work with a target to meet up with bonuses.

5. Asking for Discounts Helps to Reduce Production Cost:

Negotiate for discount when buying manufacturing materials, when processing them and when hauling them to final consumers.

Discounts help to reduce cost of production thereby increasing profits.

Also, when you get accumulated discounts over a period of time, the money could also be used for other important areas in production.

6. Reduce Production Cost by Dropping Time Consuming Activities:

Identify activities in your production process that takes much time and see if you can ignore those processes.

If you can ignore them, please do. Wasting time in one activity during production increases the cost of production.

For instance, you don’t need to call a staff meeting on a Monday morning before start of work.

7. Add Break Times for Refreshment:

All work no play makes Jack a dull boy.

Don’t engage workers in a long period of time without break time to rest and refresh their body and minds.

This sounds funny isn’t it. But if you ignore break times at workplace, get ready to pay more when workers collapse due to fatigue.

Break times helps them renew their strength to do more and well pleasing job.

Hence, you have saved the cost of medical health care by preventing collapse of workers.

8. Avoid Trial and Errors, Be Specific:

Trial and errors will only make you spend more money; hence avoid it if you must reduce your cost of production.

Being specific is the way out here. Know exactly what you want to do and do it.

You can save the money you could have wasted in trying out for what works.

9. Observing Safety Precautions Helps to Reduce Cost:

Accidents incur expenses; observe safety at work. Else you will spend money to treat injured workers and slow down work operation.

Safety in the work place helps to reduce expenses and production cost by 75%.

One accident at work can disrupt all your plans for the day and waste resources for you.

Therefore, observe maximum safety precautions at work. Accident leads to unnecessary unforeseen expenses.

10. Use the Right Tools and Machinery For Every Job:

Can you imagine the kind of time, energy and resources it would take to dig a hole as dip as a well with a shovel instead of a digger?

Oh my God, that could be so stressful and tiring.

Using the right tools for every job is important to make the most of any job.

The right tool at hand increases the speed of work and boost workers confidence to work.

ALSO READ: The Gap Between the Rich and the Poor.

11. Increase Working Speed to Reduce Cost:

How fast can you produce what you produce daily? Take time to evaluate your working speed and improve on necessary areas as fast as possible.

Speed is a criterion for progress in all industry.

Therefore, try to cut down the number of your production hour by eliminating less important tasks.

12. Automate Recurring Processes:

Activities that require you to do them over and again can be cheaply automated by having an inbuilt automated system.

For instance, you can create an auto response to reply email queries from similar questions you have answered several time.

This will automatically help you save time for other important stuffs thereby reducing cost and increasing profits.

ALSO READ THIS: How to Build a Great Customer’s Service in 2 Years.

13. Reduce Cost of Material, Production and Design:

Check how much you spend on buying materials.

You can reduce material cost by using them immediately after purchase to avoid damages.

Also, re-analyze your production process and cost of designs.

Simplify your design in a more economical format.

14. Communicate to Workers, Listen to their Challenges and Resolve It:

It’s cheaper to get people to achieve a certain goal when you know their challenges and resolve it appropriately.

Take time to listen to worker and find out where improvements need to be made in your work place and do so.

Having an online group chat for effective communication is good so you don’t always call for physical meetings.

Communication is the key for any global business.

Anita Roddick

15. Cutting out Surplus helps to Reduce Cost of Production:

Surplus are good if they come as expected daily profits, however if it involves surplus in the materials used then that could be a loss to you.

Reducing surplus will alternatively reduce your production cost and increase profits for you.

ALSO READ THIS ARTICLE: 6 Powerful Laws to Build Lasting Wealth.

16. Carryout Maintenance On Production Facilities and Equipment:

Invest in daily, weekly or monthly maintenance. This will help avoid breakdown of working facilities during work operation.

It will save you time and money and reduce overall production cost on a long term.

17. Reduce Energy Consumption:

Calculate the energy required for you to have a successful production and drop activities that consume more energy and gives low output.

Analyse your processes to identify high energy consumption stages and see what needs to be done to cut it down.


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Applying these tips will help you go a long way to reduce production cost in your business.

Choose what works for you and stick to it.

Focus on being productive instead of busy.

Tim Ferris

I also encourage you keep record of your initial cost of production before and after applying these tips.

Hope this article was helpful, why not share to friends online using the social share icon below.

Drop your contributions with me at the comment section.

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