How to Monitor Your Manufacturing Costs

For every manufacturing business, making sure that all the resources are allocated the best way and waste is reduced is a good way of improving profitability. If you would like to make your business more effective, your processes more efficient, you will have to learn how to monitor the costs. Below you will find a few tips on how to get started and implement lean principles in your manufacturing business.



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Optimize Processes

The first thing you need to do is go through your processes and make sure that you are not wasting human resources or time when completing them. To optimize your business processes, you will have to get rid of anything that is unnecessary or takes too long to complete. For example, you can simplify complex processes, or improve the communication between different departments. Alternatively, you can get better at scheduling and allocating resources when they are needed.

Train Your People

Efficient people can save you money, so it makes financial sense to provide your staff with additional training. If there is a new technology to be introduced in your manufacturing business, you might ask one of your employees to evaluate the new process and help with the rollout, training the rest of the staff.

Implement Lean Principles


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If you haven’t heard of Lean manufacturing principles yet, it might be time to update your knowledge. Originally developed by Toyota in the 1930s, Lean’s  main purpose is to reduce waste and cut costs. It enables companies to provide more value for their customers using fewer resources. It can help business owners remain competitive and profitable in challenging market situations. Lean can help you walk through all the processes and make them work seamlessly together.

Identify the Bottlenecks

Chances are that some individual business processes are working fine, while others are holding back productivity, These are generally referred to as bottlenecks. The process with the lowest throughput is the bottleneck, and to improve the overall performance of the manufacturing value chain, employees need to improve this area. You can make your operations smoother if you reduce wait times. For example, if the part manufacturing process is a bottleneck, the assembly line will waste time waiting for the parts.

Monitor Your Resource Consumption

It is also important that you know the exact amount of resources you are using to manufacture one item. There are several ways of calculating raw material and resource costs. If you are using water or oil, you can get a flowmeter installed, so you know exactly how much raw materials or other resources you are using and make adequate improvements that will reduce your cost, waste, and make your business greener at the same time.


If you would like to improve your manufacturing processes, you will need to check every stage and make improvements based on data. Eliminate time, resource, and quality related waste through implementing Lean principles. Make sure that you monitor the situations and train your employees to become more productive.


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Hrvoje Horvat

text me: +385/9193-55474

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