During such a difficult economic period recently, with high inflation and recession forecasts, companies tend to check and re-evaluate their production processes, optimize production costs, and improve their competitiveness in the market.
Electronic manufacturers are the ones that face the biggest challenge of reducing costs. Their products’ prices are often 3 to 5 times higher than production costs. Therefore, every saved penny will create up to 5 pennies more affordable for the end-user.
In this article, GLUDITEC will show manufacturers, especially those in the electronics industry, how to reduce production costs without sacrificing quality.
1. Reduce or cut off materials beyond standard requirements
In the quality tests during product research, passing the tests does not mean that the used material is the most suitable. To save time, some companies have not noticed that the material specifications exceed the required standard. As a result, the production costs are increased.
If the materials they use have specifications exceeding the required level, engineers can contact the vendor or new suppliers to find more suitable ones.
2. “Same need, same solution”
Try to use as many of the same materials as possible in one product. For example, manufacturers can use one type of CA adhesive for plastic-to-metal, plastic-to-plastic, or plastic-to-rubber bonding applications.
With applications requiring different materials, multifunction equipment such as Jetting valve is an ideal solution due to its flexibility in viscosity & speed.
In the case of nearly identical products, let’s take a look at an example of the automotive industry: The Renault-Nissan-Mitsubishi Alliance produced 49 more different vehicle models. All the electronics, such as displays, radios, safety devices, HVAC, etc., of these models, are 99% the same.
Therefore, the alliance saved NRE costs as they utilized economies of scope by manufacturing components that are compatible with different models of all brands. Moreover, they also achieved economies of scale by producing on larger scales.
3. Switching to the larger size of materials
In large production factories, the use of bigger packaging sizes instead of small ones can bring more benefits. For example, using large cans of cleaning chemicals will help reduce costs per unit by 20-50% (in the condition that no transportation and storage costs are incurred)
4. Moving the manual production line into an automated one
Moreover, with the development of technology, arduous jobs are transferred to machines. For large manufacturing plants, reducing labor is essential in lowering costs. Investing in machinery will be a considerable expense in the short term, but this is a profitable investment in the long run.
For small-scale factories, the investment in machinery will not be as effective as outsourcing. Specialized processing factories will have enough machines, technology, and faster production time for high specialization, thereby saving costs.
For example, electric motorcycle charger manufacturers may think of potting to protect electronic circuit boards from harsh environmental conditions. However, this method requires many technical and mechanical factors.
As a result, they will look to companies specializing in potting to ensure the production time will be shortened without any investment in potting machines and people.
6. Finding Experts & Consultants
Lastly, every electronic product consists of different parts. A wide range of PCB, capacitors, or materials in a product can be found on the market. Therefore, finding experts in each field is recommended if you want to reduce production costs or choose the most suitable input materials. They will give you the most appropriate answer.
As we can see, there is no perfect cost reduction formula; every small reduced cost contributes to the company’s total profit. Maintaining the product’s quality is the most important and challenging thing. It requires engineers to invest expertise, time, and effort.
Gluditec is a worldwide provider of high-tech adhesive feeding, mixing, and dispensing solutions with exceptional knowledge regarding materials. Contact us to find the most suitable cost-optimization solution.
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