How entrepreneurs optimize costs of production?

How entrepreneurs optimize costs of production?

     Nowadays every entrepreneur is searching for the most appropriate way to improve profits. One way of improving profits is to lower costs.

     Optimizing production costs helps company to save money for other purposes. Such as developing new brands or products, save it for employees’ salaries, or inventing something new in company. There are several ways how to decrease production costs. Production includes many factors- costs to produce products, time management of production, and many other which give the clear picture of company production line.

     Before company starts changing something it must to find out and understand what it needs. When company at least had found out what is wrong the cutting of production costs can begin. Company has to evaluate how more workers they have and may lead some of non-profitable ones. Ofcource it sounds not good but if it is necessary for company it must be done. Help those workers who are not very good at work but want to improve them and increase their productivity by providing necessary skill-based training and other additional training to complement their abilities, talents, and knowledge. By investing in highly competent workers and treating them well, you would also gain their loyalty as they help enhance your business further, making it as competitive as other established businesses. Also there could be cut salaries. Cutting two workers’ salaries may save to company a lot of money actually. Talking about technologies – good computers and machines could minimize the time of good production. Companies have to always make sure that their machinery and equipment is in perfect working condition. Use only quality materials, keeping facilities orderly and updated. Maybe those techniques would cost expensive but the profit for company would be higher. Moreover companies may consider their places of production. For example the small old building instead modern and new. The equipment in good quality would be more appropriate than brand new one machine.

  Very important thing is not to lose quality. It must be done. If company start saving money on product quality – sales start decreasing Because of customer is used to one.. but company gives him another.  Company must provide the best service, attracting the customers to buy their good. Also companies may open their companies in other countries, where the labors cheap. For example Asian countries. Nowadays many large companies manufacture their products in Asia because of extremely cheap labor. . To cut costs is possible when it comes to production.

     One or more of these practices are evident within those operations that are financially successful. I would encourage considering any or all of the activities. Ofcoure these are only some of the ways that you can decrease the cost of your manufacturing. There are numerous other things that company can do to lower your manufacturing costs, including taking a look at the entire company, when company working in the manufacturing industry every little thing in the company effects the final costs of r manufacturing, including shipping and delivery.

     An example of company:

     BANGALORE, Aug 25 (Reuters) - U.S. solar company Energy Conversion Devices said it expects to reduce production costs by about a fifth this year, in a sector where high costs and low selling prices have squeezed margins.

     The Auburn Hills, Michigan-based Company, which has been aiming to reduce production costs amid cut-throat competition, said it expects cost per watt at $1.66 in 2011, down from $2.11 per watt last year.

     "We are (also) extremely focused on finding cost reduction opportunities to improve our bottom line and moderate our cash usage," interim President Jay Knoll said on a conference call with analysts.

     The company, which said in May that it would cut a fifth of its workforce, consolidated certain facilities and reorganized its departments to reduce costs during the year.

     http://www.reuters.com/article/2011/08/25/energyconversion-idUSL4E7JP2N920110825 

     Vorne – Visual Displays and Productivity tools

     Reduce Manufacturing Costs

     PROBLEM 

     Unplanned downtime is making it impossible to meet production goals.

     STRATEGY 

     Reduce downtime through team awareness of downtime events when they occur. Display downtime for both the event and total accumulated downtime. Once the information is available to those responsible, set goals for reducing it.

     SOLUTION 

     Automatically display downtime when the line stops. Use color and context sensitive variable changes to further enhance the awareness. Show a real-time run rate in green and change to the accumulated downtime in red when the line stops.

     The 87 Series 4" to 12" displays can automatically detect and display accumulated downtime when the line has stopped and the real-time run rate or event when the line is running. XL Series Production Monitor displays can do all of this and more. For example, they can

     Simultaneously display the last event and accumulated downtime or play a “Call for Supervisor” message when the downtime exceeds a programmable amount of time.

     http://www.vorne.com/solutions/improvement/reduce-manufacturing-costs.htm