When you’re selling a product, an effective manufacturing process is essential to keep costs competitive and achieve the highest possible profit margin. If you’re spending too much at the manufacturing stage, you simply can’t make enough sales to make up for this early inefficiency.

Fortunately, there are many ways to reduce costs without compromising on quality.

1. Understand Your Expenses

One of the most effective ways to reduce manufacturing costs is to determine what they are and their value to your business. Over a period of months, track labor costs, raw material expenses, overtime, capacity and total cost of goods sold. Record as much detail as possible for review.

Once you have the data, you can start looking for ways to save. You may find it’s more efficient to have a partner handle some of your manufacturing and fabrication, as they may have the equipment required to produce your parts more cost-effectively.

2. Reduce Inventory Expenses

Holding on to products and materials can be costly, especially if you need to lease storage space. Having a supplier take care of extrusion services for you allows you to get parts when you need them instead of having to pay to store materials on-site.

3. Take a Look at Labor Costs

Having more workers costs more, especially when you consider overtime pay, varying degrees of efficiency and the cost of onboarding, training and paying for benefits and insurance for everyone on your payroll. By having fabrication of some parts or components handled by a partner such as Pennex Aluminum Company, you can keep your labor force lean.

Pennex can take care of extrusion and casting as well as fabrication, so you don’t have to maintain an in-house team for those processes. Since you don’t have to pay for manufacturing, additional transport or labor separately when you work with us, you’ll gain more control over your manufacturing costs.

4. Keep Labor Efficient

You can encourage workers to produce more efficiently when you offer training and hire carefully. Skilled, highly trained workers tend to be significantly more productive, helping you get more product manufactured in less time and with less waste. While skilled labor often comes at a higher cost, having knowledgeable, capable personnel powering your processes saves money in the long run.

5. Make Your Output Efficient

When you don’t need to make every part or component of your product, you save on labor, manufacturing and overhead. These savings allow you to focus on the elements of your product manufacturing or sales process that add the most to your bottom line.

When Pennex Aluminum takes care of the casting, fabrication and extrusion of parts, you can focus on assembly and sales. You’ll also benefit from having a predictable production cost, allowing you to plan your cash flow and better allocate your assets to grow your business.

Contact Pennex Aluminum to Discuss a Partnership

Since 1979, Pennex Aluminum Company has been supporting businesses by casting, extruding and fabricating aluminum products. We can help you predict parts costs and deliver premium components thanks to our efficient, reliable manufacturing processes. Contact the Pennex team today to learn more about what we can do for you.