Reducing Overhead Costs in Manufacturing

 In Production Upgrade

When the conversation of reducing costs in manufacturing comes up, the first word that people mention is “complexity”.

Rapid shifts in both technology and business practices have led companies to learn to adapt on the fly. This has led to a greater need for control over processes, as that must be in place before the conversation turns to cost efficiency.

We’ll explain a few methods below which can greatly help your factory reduce your production costs.


An oil refinery with a green field in the foreground


Systems optimization as a whole

Before you consider your bottom line, you need to have control of your process and system. This keeps you thinking “big picture” – many factories get tripped up by working with parts as opposed to the whole process. By losing sight of this, many companies will rush into cost reduction while damaging the system’s infrastructure overall. It’s ironic, but a company’s decision to improve systems can sometimes hinder the process as a whole.

The benefits of sustainable manufacturing

Going green is now beyond just an environmental benefit – it can actually boost your bottom line.

One major factor of inefficiency is waste. Most plants produce an obscene amount of waste, and could save themselves tons of money by figuring out how to repurpose it.

Other overhead costs reduction techniques for manufacturers

  • Inventory and storage management. As you may know, inventory is one of the major costs for manufacturing facilities. Cost of storage as well as insurance and maintenance can add up quickly. It’s important to avoid overproduction and stay responsive to changing customer needs.
  • Upgrade intelligence systems. With smarter technology and oversight, you can improve root cause analysis, which allows you to better anticipate spills or quarantines in the future.
  • Avoid compliance issues. Compliance issues can come with a hefty price tag. As part of your systems optimization, you can enhance production so that mistakes are prevented and compliance costs are avoided.
  • Lower energy costs. For most manufacturing facilities, energy use is the highest or second-highest cost. There are both barriers and opportunities for reducing energy use, you just need a smart way to navigate them.

Using a third party company to optimize systems

Sometimes, you need an outside company that’s able to see the forest for the trees, as they say. This is why manufacturing facilities will reach out to a consultant or outside company to help optimize their systems.

Plant optimization is one of our core competencies at Storee Construction. We are able to spot inefficiencies and figure a way to improve them while causing minimal downtime.

To discuss your plant’s needs, get in touch with someone from our team.