How to Effectively Reduce Manufacturing Costs

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					How to Effectively Reduce Manufacturing
Costs
Established businesses tend to put things on auto pilot, generating revenue and making decisions
without even thinking about it. That is until the time comes when you want to introduce a new
product. Then suddenly many businesses find themselves re-evaluating how they’ve been doing
things and wondering if there is a better way. This is the perfect time to stop and think about how
you’re doing things and whether you can effectively reduce manufacturing costs.

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If it’s been several years since the last time you evaluated your manufacturing processes, you
may quickly discover there are several places where you can improve your cost of operations
while at the same time improving product quality and your profits.

These days many companies no longer undertake the manufacturing of their products
themselves. Instead they outsource their manufacturing. China has many manufacturers to
choose from and it’s where much of today’s manufacturing takes place. The global market has
never been more accessible and you can easily shop for the best pricing.

The size of your business today isn’t important. It’s that your objective is to grow your business
into the future. Growth can come three ways – you will either increase your sales, increase your
price, or decrease your cost. Adding new products can help to increase sales because you’ll have
a wider selection for the consumer to choose from.

Increasing your price isn’t always the best way to grow your business since you can become
uncompetitive. But reducing your cost of goods can do wonders for the growth of your business,
which is why if you are outsourcing you should give it the proper attention.

It doesn’t matter what you are selling – it could be computers, athletic footwear, toys, or any
other product, because of the significant growth in manufacturing facilities throughout China,
and the improved ability to get those goods to businesses anywhere in the world it’s where many
businesses that need their products manufactured turn. Your business can now capitalize on these
savings and improve your net income.

When the decision to move manufacturing to a plant in China or elsewhere, has been made, it’s
important to ensure you have all the necessary agreements in place to protect your business.
Remember, don’t be afraid to negotiate because there’s plenty of room for it especially when you
are ordering quantities that should justify a significant cost reduction.

Even if you aren’t adding a new product to your lineup this just might be the time to re-evaluate
your manufacturing processes.

				
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posted:11/24/2011
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