What are two suggestions, on how to make production changes to cut cost without losing out on quality?

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Michael Ugulini | (Level 3) Educator

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One suggestion on how to make production changes to cut costs without losing out on quality is to reduce labor expenses if there are redundancies between departments or within a department. In the production of goods, a company may have procedures and processes repeated unnecessarily as the product moves down the assembly line within the same department, or as it transfers from one department to another.

Therefore, this may be an opportunity to cut out a process or procedure. This may involve reducing the number of employees working on this particular production line. It may be more efficient to cut these labor hours. It may be more efficient to move the employee to another area of the business where he or she will boost production and therefore make the operation better. Eliminating labor redundancies does not compromise quality.

The second suggestion is to reduce the amount of money spent on raw materials, while still using premium parts or ingredients, depending on the type of business. Negotiating better purchase terms with suppliers is one way to reduce raw material costs. A business still acquires top-notch raw materials but spends less in doing so. Another way to lower raw material costs is to buy in bulk (in greater quantities). Volume discounts for the same premium raw materials means you spend less to produce the same quality goods.


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