Process improvements to cut costs and increase your profit margin
What is process improvement?
Process improvement requires objective goals. One improves a process to meet an objective or goal. Therefore, process improvement is an optimisation exercise to meet those objectives.
Why are processes improved?
Usually, exercises are conducted because the product produced does not meet expectations, as
- Management have decided that the product cannot be competitive in the market , or
- the current economic climate has impacted on sales and the profit has dropped, or
- quality is poor and warranty claims are escalating.
- Quality is poor and manufacturing is not repeatable enough to improve quality
- Using too many resources like material, manufacturing equipment, man-hours etc.
- Or it is taking too long
These are typical reasons why we are contacted to improve processes.
Now that the reason is identified, an appropriate methodology is sought to make the existing product at
- a lower cost and
- better quality
Both these create a competitive edge over your competitors. As the product costs less than that of your competitors, you have an opportunity to beat them on sales price and still bring in a profit.
Better quality is also competitive. Consumers will prefer better quality and warranty claims will decrease.
This is why we focus on effective engineering, efficient processes and excellent quality to reduce the cost of realising your product.
Read effective engineering here for more information on engineering.
All to reduce the cost of realising your product at the most cost-effective way, and to ensure no warranty claims eat into your profit.
Techniques or methodologies are typically used for:
- lean methodologies,
- Improving the company working culture,
- Or to layout workflows
And are listed here plus other useful tools:
- Cause and effect analysis
- (fish bone diagram / fish bone analysis)
- Process mapping
- SIPOC (DMAIC and DMADV)
- Six Sigma
- Total Quality Management (TQM)
- Value Stream Mapping
In our work we use some more than others to improve the engineering process to obtain the optimal quality and cost for products.
There are many reasons for improving. Streamlined design and manufacturing processes
- minimises waste and resources
- use less energy, and thus reducing your company's carbon footprint.
- increases your net profit margin (rendement)
- saves time, reducing cost of operations and resources