Modern manufacturing companies have a lot of competition because of the globalization of the marketplace and the increase in shipping efficiency that has resulted from it. As a result, finding the best return on your investment means knowing how to operate efficiently and pursuing every opportunity to get more of the resources and services you need while paying less out for them. It’s not always possible to lower costs in every area, but reviewing some common areas can help you get the ball rolling, and from there it’s a matter of balancing your needs against the available options in the marketplace.
1. Review Your Vendor Contracts
Support services like industrial waste solutions can create a lot of costs for companies in this sector. Both B2B suppliers and consumer products manufacturing face it, as do many other industrial operations that support these companies through resource extraction and refinement. That makes waste management a considerable expense, and finding service that provides you with a cost-efficient path to EPA compliance and environmental responsibility means being willing to review your service level while shopping around to see what the best bid on the right service looks like. Optimizing your service provider can save you a lot, and at the very least it lets you be sure you aren’t paying more than you need to.
2. Rethink Risk Management
Consolidating your insurance into a comprehensive, tailor-made plan can help you save money, but it’s not the only way to lower the cost of your insurance while maintaining the coverage you need. Self-insurance and captive ownership models are also out there, as are many other alternative risk transfer models that could help you lower your annual costs. It’s worth a review with an insurance specialist who knows about out-of-the-box solutions to see if you can lower your costs.
3. Audit Your Equipment Leases
Checking your equipment to be sure every piece that you have financed is returning its cost and more can help you figure out where your best options are for cutting down on rental costs. The same goes for equipment on loan financing. As long as selling the asset pays off the debt, an under-producing investment needs to be re-evaluated whenever your overhead costs become an issue. It may also be worth reviewing whether any of your other equipment could go, because selling unused equipment you own outright can be a good way to raise capital when it’s most needed.