Reducing Manufacturing Costs – Top 5 Strategies

Implementing effective tactics to reduce manufacturing costs is essential for the competitiveness and sustainability of the process industry.

This blog post is for plant or process engineers, plant managers, or improvement professionals seeking effective cost-reduction strategies. We explore our top 5 tactics for reducing manufacturing costs and improving performance in the process industry.

1. Optimise Raw Material Consumption

Map all raw material consumptions, making them simple and visual.

Image 1 – Raw material consumption map built on the Cyzag platform.

Prioritise them based on the potential benefits relative to the effort required.

For each raw material prioritised, explore the data in detail and implement actions based on root cause analysis. Use trends, log charts, dashboards, and statistical process control tools (control charts, Pareto charts) to monitor improvements and ensure process stability.

Image 2 – Specific raw material consumption trend within the Cyzag Platform.

Follow up the actions and make the changes a new standard.

2. Reduce Energy Consumption

Map all energy consumption, making it as simple and visual as possible.

Identify which are measured and which require estimation. Evaluate the possibility of renting instruments for real-time energy usage. For online measurements, applying a drill-down structure can help visualise out-of-range consumptions.

Image 3 – Energy consumption drill-down within the Cyzag Platform.

Categorise reduction opportunities into process improvements, maintenance needs (fixing leaks, insulation), and capex (efficient motors, variable-frequency drivers, etc.). Using Ishikawa diagrams can help with this identification.

Image 4 – Ishikawa diagram on the Cyzag platform.

Prioritise them and implement them accordingly.

Utilise tools such as data visualisation for tracking trends and creating dashboards, statistical process control tools like control charts and Pareto charts, and energy monitoring platforms to measure progress and ensure energy efficiency.

3. Improve OEE – Align Maintenance with Production Schedule

Focus on integrating preventive and predictive maintenance tasks with the production schedule to enhance equipment availability and performance. A starting point is visualising maintenance work orders and their impact on production equipment.

Image 5 – Maintenance Work Orders Schedule in Calendar View on the Cyzag Platform.

Image 6 – Maintenance Work Orders Schedule in Detailed View on the Cyzag Platform.

Use tools like CMMS (Computerised Maintenance Management System) for efficient scheduling and tracking, IoT devices for real-time monitoring, and digital platforms for calculating OEE (overall equipment effectiveness).

Regularly review the alignment of maintenance and production schedules, adjusting strategies to improve OEE.

4. Improve OEE – Focus on Bad Actors

Identify the bad actors impacting your OEE within the production process—equipment, processes, or practices that frequently drive downtime, performance or quality. Pareto charts are very useful for this.

Image 7 – Pareto Chart for Production Losses on Cyzag Platform.

Image 8 – Pareto Chart for Production Losses Categorised by Functional Location on Cyzag Platform.

Utilise data analytics tools to pinpoint and prioritise problematic areas for corrective action.

Implement root cause analysis techniques such as 5 Whys and Ishikawa Diagrams to understand the underlying issues and develop targeted solutions.

Regularly review and reassess the impact of these interventions, making necessary adjustments to ensure sustained improvement in OEE.

5. Improve OEE – Focus on Quality

Concentrate on ensuring products meet quality standards to reduce defects and rework, enhancing OEE and decreasing costs.

Implement Statistical Process Control (SPC) to monitor and control production processes and identify process variations that could lead to quality issues.

Utilise quality management systems (QMS) to maintain consistent quality standards and streamline quality assurance processes.

Leverage digital platforms for continuous improvement, allowing real-time data analysis and quick response to deviations.

Image 9 – OEE Calculation and Drill Down.

Regularly review and refine quality measures to improve product consistency and optimise OEE.

Conclusion

Effective cost reduction is not just about cutting expenses; it’s about optimising resources and processes and adopting a continuous improvement mindset. Understanding manufacturing costs and implementing strategies to reduce them are crucial for maintaining competitiveness and ensuring long-term sustainability in the process industry.

Leveraging digital solutions helps manufacturers work smarter by streamlining optimisation processes, providing easily accessible data, and empowering more decision-makers. This creates numerous opportunities to reduce manufacturing costs.

Schedule a personalised demo with us today to see how digitalisation can help you reduce manufacturing costs and boost your profitability.