{"id":3825,"date":"2019-07-18T12:24:12","date_gmt":"2019-07-18T09:24:12","guid":{"rendered":"https:\/\/fractory.com\/?p=3825"},"modified":"2024-08-15T14:56:35","modified_gmt":"2024-08-15T11:56:35","slug":"cost-reduction-manufacturing","status":"publish","type":"post","link":"https:\/\/fractory.com\/cost-reduction-manufacturing\/","title":{"rendered":"Cost Reduction in Manufacturing &#8211; How to Save \u00a310,000 per Engineer?"},"content":{"rendered":"<p>What if I told you that you can save at least <strong>\u00a310,000 per engineer annually<\/strong>? We&#8217;ll show you the maths behind it in this article.<\/p>\n<p>Manufacturing cost reduction is usually aimed at saving money through cheaper production. That&#8217;s the most obvious way &#8211; comparing different offers and choosing the lowest price.<\/p>\n<p>The variety of possibilities is much wider. <a href=\"https:\/\/www.cmtc.com\/blog\/10-effective-cost-saving-tips-for-manufacturers\" target=\"_blank\" rel=\"noopener noreferrer\">Well-known ideas<\/a> for cost reduction in manufacturing are:<\/p>\n<ul>\n<li>Assessing your current costs<\/li>\n<li>Making assessment-based corrections<\/li>\n<li>Communication with workers to find more areas of optimisation<\/li>\n<li>Re-evaluating previous decisions<\/li>\n<li>Following <a href=\"https:\/\/fractory.com\/5-iso-standards-manufacturers\/\" rel=\"noopener noreferrer\">ISO 9001 standards<\/a> for continuous improvement<\/li>\n<li>Reducing energy consumption<\/li>\n<li>Automating processes that don&#8217;t need human interaction<\/li>\n<li>Minimise <a href=\"https:\/\/fractory.com\/transportation-cost-explained\/\">transport costs<\/a><\/li>\n<li>Reduce the time wasted on non-value work activities<\/li>\n<\/ul>\n<p>We are taking a closer look at the last point. It is often overlooked because many of those activities are viewed as a part of the natural manufacturing process. But we have some new viewpoints to share with you!<\/p>\n<h2>Saving Design Engineers&#8217; Time<\/h2>\n<p>So let&#8217;s get to my audacious claim first. \u00a310,000 is a lot of money. What can you do to save this amount annually <strong>per engineer<\/strong>?<\/p>\n<p>An engineer&#8217;s weekly workflow includes many steps. To simplify, an average project may take a week to accomplish from idea generation to making drawings. The last part &#8211; producing manufacturing drawings &#8211; takes about 20% of the allocated time. And this estimation includes a buffer.<\/p>\n<p>Now, what would happen if you just didn&#8217;t have to make those drawings? You&#8217;d <strong>save 8 hours per week<\/strong>, which totals about 400 hours per year. In monetary terms, this <strong>equals the aforementioned \u00a310,000<\/strong> per year. And how to omit this crucial part of the engineering practice?<\/p>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-3906\" src=\"https:\/\/fractory.com\/wp-content\/uploads\/2019\/07\/Engineering-Drawing.jpg\" alt=\"\" width=\"640\" height=\"301\" srcset=\"https:\/\/fractory.com\/wp-content\/uploads\/2019\/07\/Engineering-Drawing.jpg 640w, https:\/\/fractory.com\/wp-content\/uploads\/2019\/07\/Engineering-Drawing-300x141.jpg 300w\" sizes=\"(max-width: 640px) 100vw, 640px\" \/><\/p>\n<p><a href=\"https:\/\/fractory.com\/cloud-manufacturing\/\" rel=\"noopener noreferrer\">Fractory&#8217;s cloud manufacturing platform<\/a> accepts STEP files as well as file types native to SolidWorks (SLDPRT) and Autodesk Inventor (IPT). Nowadays, all projects are first done as 3D models that can easily be converted into the universal STEP format. Uploading those to our platform gives an <a href=\"https:\/\/fractory.com\/laser-cutting-quote\/\" rel=\"noopener noreferrer\">instant price quote<\/a>. Therefore, there&#8217;s no more need for drawings.<\/p>\n<p>And there&#8217;s no more need to spend 20% of an engineer&#8217;s time on that. <strong>How many engineers do you have at your company?<\/strong><\/p>\n<h3>Comparing Different Designs<\/h3>\n<p>Good engineers <a href=\"https:\/\/fractory.com\/engineering-tips\/\" rel=\"noopener noreferrer\">follow these engineering tips<\/a> to never rely on one solution only. Picking the best one comes down to functionality, reliability, aesthetics and price. The price point, so far, has been a rough estimation based on the engineer&#8217;s experience.<\/p>\n<p>With automated quoting it&#8217;s easy to perform quick <a href=\"https:\/\/fractory.com\/design-to-cost-dtc\/\">design to cost<\/a> analysis, you can simply <strong>upload a few competing ideas and compare the prices<\/strong>. You&#8217;d be surprised by the results. A gut feeling often doesn&#8217;t come close to reality.<\/p>\n<p>Discovering that a <strong>higher-value solution has a similar or even lower price<\/strong> compared to a lesser option demonstrates the effectiveness of integrating <a href=\"https:\/\/fractory.com\/cost-value-engineering\/\">cost and value engineering principles<\/a>.\u00a0A simple example is a part optimised for weight, where numerous cutouts make it seemingly much costlier. It can often be so that those cutouts, in reality, add very little to the final price.<\/p>\n<h2>Cost Reduction Through Purchasing Manager<\/h2>\n<h3 style=\"margin-bottom: 15px;\">Saving Time on Quoting<\/h3>\n<div class=\"arve arve-hover-effect-darken\" data-mode=\"lazyload\" data-oembed=\"1\" data-provider=\"vimeo\" id=\"arve-vimeo-341759983\" style=\"max-width:900px;\" data-reset-after-played data-fullscreen=\"disabled\">\n<div class=\"arve-inner\">\n<div class=\"arve-embed arve-embed--has-aspect-ratio\" style=\"aspect-ratio: 500 \/ 281\">\n<span class=\"arve-ar\" style=\"padding-top:56.200000%\"><\/span><noscript class=\"arve-noscript\"><iframe credentialless referrerpolicy=\"strict-origin-when-cross-origin\" allow=\"accelerometer &#039;none&#039;;ambient-light-sensor &#039;none&#039;;autoplay;battery &#039;none&#039;;bluetooth &#039;none&#039;;browsing-topics &#039;none&#039;;camera &#039;none&#039;;ch-ua &#039;none&#039;;clipboard-read 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class=\"arve-iframe fitvidsignore\" data-arve=\"arve-vimeo-341759983\" data-src-no-ap=\"https:\/\/player.vimeo.com\/video\/341759983?dnt=1&amp;app_id=122963&amp;transparent=0&amp;title=1&amp;byline=0&amp;portrait=0&amp;autoplay=0\" frameborder=\"0\" height=\"505.8\" name sandbox=\"allow-scripts allow-same-origin allow-presentation allow-popups allow-popups-to-escape-sandbox allow-forms\" scrolling=\"no\" src=\"https:\/\/player.vimeo.com\/video\/341759983?dnt=1&#038;app_id=122963&#038;transparent=0&#038;title=1&#038;byline=0&#038;portrait=0&#038;autoplay=1\" width=\"900\" title=\"Bending Quote Online\" loading=\"eager\"><\/iframe>\n<\/noscript><img decoding=\"async\" alt=\"Bending Quote Online\" src=\"https:\/\/i.vimeocdn.com\/video\/790461310-ad608919e55a675924718c63615711da87e5c96bc717c9de5bf9128f1557a75c-d_295x166\" srcset=\"https:\/\/i.vimeocdn.com\/video\/790461310-ad608919e55a675924718c63615711da87e5c96bc717c9de5bf9128f1557a75c-d_320 320w, https:\/\/i.vimeocdn.com\/video\/790461310-ad608919e55a675924718c63615711da87e5c96bc717c9de5bf9128f1557a75c-d_640 640w, https:\/\/i.vimeocdn.com\/video\/790461310-ad608919e55a675924718c63615711da87e5c96bc717c9de5bf9128f1557a75c-d_960 960w, https:\/\/i.vimeocdn.com\/video\/790461310-ad608919e55a675924718c63615711da87e5c96bc717c9de5bf9128f1557a75c-d_1280 1280w\" class=\"arve-thumbnail\" width=\"480\" height=\"270.10169491525\" loading=\"lazy\">\n<h5 class=\"arve-title\">\nBending Quote Online\n<\/h5>\n<button role=\"button\" type=\"button\" class=\"arve-play-btn arve-play-btn--youtube\" data-target=\"#arve-vimeo-341759983\" aria-label=\"Play video: Bending Quote Online\">\n<svg class=\"arve-play-svg arve-play-svg--youtube\" focusable=\"false\" aria-hidden=\"true\" width=\"68\" viewBox=\"0 0 68 48\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n\t<path fill=\"#1f1f1e\" fill-opacity=\"0.81\" d=\"m .66,37.62 c 0,0 .66,4.70 2.70,6.77 2.58,2.71 5.98,2.63 7.49,2.91 5.43,.52 23.10,.68 23.12,.68 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type=\"application\/ld+json\">{\"@context\":\"http:\\\/\\\/schema.org\\\/\",\"@id\":\"https:\\\/\\\/fractory.com\\\/cost-reduction-manufacturing\\\/#arve-vimeo-341759983\",\"type\":\"VideoObject\",\"embedURL\":\"https:\\\/\\\/player.vimeo.com\\\/video\\\/341759983?dnt=1&app_id=122963&transparent=0&title=1&byline=0&portrait=0&autoplay=1\",\"name\":\"Bending Quote Online\",\"thumbnailUrl\":\"https:\\\/\\\/i.vimeocdn.com\\\/video\\\/790461310-ad608919e55a675924718c63615711da87e5c96bc717c9de5bf9128f1557a75c-d_295x166\",\"uploadDate\":\"20190714T000000+0100\",\"author\":\"Fractory\",\"duration\":\"PT31S\",\"description\":\"Laser cutting quote in seconds on an automated online platform\"}<\/script>\n<\/div>\n\n<p>Every company that outsources its production has a <a href=\"https:\/\/fractory.com\/what-is-procurement\/\">procurement<\/a> manager who takes care of the ordering process. They probably get 3-4 quotes from different suppliers before settling on one offer. This entails back-and-forth emails and calls. Let&#8217;s say getting each quote takes around an hour. That&#8217;s 4 hours in total, or <strong>\u00a3100 spent towards communication<\/strong> in wages.<\/p>\n<p>If you <a href=\"https:\/\/fractory.com\/supplier-tiers-explained\/\">know your suppliers<\/a>, they probably give you quotes in a 15% range. With orders up to \u00a31,000, this amounts to a maximum of \u00a3150 in savings. But getting those quotes cost you another \u00a3100.<\/p>\n<p>This means that the cheapest option is \u00a3850 + \u00a3100 (time spent on getting offers) = <strong>\u00a3950<\/strong>. Fractory&#8217;s algorithms give you a competitive quote by only including suppliers that are able to provide reasonable prices for a particular job. Sometimes we&#8217;re at the lower end of the spectrum, sometimes at the higher. On average, <strong>you would get a price of \u00a3925, which still amounts to monetary profit + available time for value-adding activities<\/strong>.<\/p>\n    <div class=\"shortcode-enhanced-cta\">\n        <div class=\"shortcode-enhanced-cta__content\">\n            <span class=\"v2-section-title v2-section-title--md\">Scale Your Manufacturing from Prototyping to Series<\/span>\n\n            <ul class=\"shortcode-enhanced-cta-list\">\n                                                            <li>\n                                                            <div class=\"shortcode-icon\">\n                                    <svg width=\"100%\" height=\"100%\" viewBox=\"0 0 33 32\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n<path d=\"M16.4933 23.3059C21.7413 23.3059 25.9956 19.0515 25.9956 13.8036C25.9956 8.55559 21.7413 4.30127 16.4933 4.30127C11.2453 4.30127 6.991 8.55559 6.991 13.8036C6.991 19.0515 11.2453 23.3059 16.4933 23.3059Z\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\n<path d=\"M1.16917 30.3724C1.35654 28.4452 2.49414 26.7455 4.20723 25.8488L11.5682 21.9542\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\n<path d=\"M21.4318 21.9542L28.7928 25.8488C30.5058 26.7588 31.6434 28.4586 31.8308 30.3724\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\n<path d=\"M12.8798 18.7956H6.10769C4.24738 18.7956 2.74843 17.2967 2.74843 15.4364V12.2243\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\n<path d=\"M8.28921 9.02567H3.97971C3.29715 9.02567 2.74843 9.57439 2.74843 10.2569V14.2185C2.74843 14.901 3.29715 15.4498 3.97971 15.4498H7.13822\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\n<path d=\"M24.7108 9.02567H28.7928C29.4753 9.02567 30.024 9.57439 30.024 10.2569V14.2185C30.024 14.901 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stroke-linejoin=\"round\"\/>\n<\/svg>\n                                <\/div>\n                            \n                                                            <span>Personal account manager<\/span>\n                                                    <\/li>\n                                                                                <li>\n                                                            <div class=\"shortcode-icon\">\n                                    <svg width=\"100%\" height=\"100%\" viewBox=\"0 0 33 34\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n<path d=\"M17.5835 26.6203C16.8491 26.0906 15.4887 26.1628 14.959 25.4284C14.4293 24.694 14.9229 23.4299 14.6339 22.5631C14.345 21.6963 13.2133 20.986 13.2133 20.059C13.2133 19.1319 14.3691 18.3976 14.6339 17.5548C14.8988 16.7121 14.4293 15.4119 14.959 14.6895C15.4887 13.9672 16.8491 14.0274 17.5835 13.4976C18.3179 12.9679 18.655 11.6436 19.5218 11.3667C20.3886 11.0898 21.412 11.9566 22.351 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                                <span>Payment terms for companies<\/span>\n                                                    <\/li>\n                                                                                <li>\n                                                            <div class=\"shortcode-icon\">\n                                    <svg width=\"100%\" height=\"100%\" viewBox=\"0 0 31 33\" fill=\"none\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\">\n<g id=\"Layer_1\" clip-path=\"url(#clip0_874_1102)\">\n<path id=\"Vector\" d=\"M4.02589 18.9188H26.9832V26.7685C26.9832 27.6336 26.282 28.3257 25.426 28.3257H5.58309C4.71798 28.3257 4.02589 27.6245 4.02589 26.7685V18.9188Z\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\n<path id=\"Vector_2\" d=\"M26.9832 18.9188H4.02589L6.52106 8.96545C6.67587 8.3371 7.24046 7.89999 7.88702 7.89999H23.1312C23.7777 7.89999 24.3423 8.3371 24.4972 8.96545L26.9923 18.9188H26.9832Z\" 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1.63477H26.0544C27.9212 1.63477 29.4328 3.14643 29.4328 5.01325V22.4885C29.4328 23.2534 28.8136 23.8636 28.0578 23.8636H27.0014\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\n<path id=\"Vector_6\" d=\"M4.02589 25.2295H10.1181L9.6992 23.8089C9.38048 22.7344 8.39698 22.0059 7.27689 22.0059H4.02589\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\n<path id=\"Vector_7\" d=\"M26.9832 25.2295H20.891L21.3099 23.8089C21.6286 22.7344 22.6121 22.0059 23.7322 22.0059H26.9832\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\n<path id=\"Vector_8\" d=\"M15.5 7.89999V10.6501\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\n<path id=\"Vector_9\" d=\"M12.4858 10.6501H18.5142\" stroke=\"currentColor\" stroke-width=\"2\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\n<\/g>\n<\/svg>\n                                <\/div>\n                            \n                                                            <span>On-time delivery by Fractory<\/span>\n                                                    <\/li>\n                                                                                    <\/ul>\n\n            <a class=\"c-button c-button--sm\" href=\"https:\/\/app.fractory.com\/quotes\/new\">Get a quote<\/a>\n        <\/div>\n\n        <div class=\"shortcode-enhanced-cta__media\">\n                            <video class=\"shortcode-video\" autoplay loop muted playsinline>\n                    <source src=\"https:\/\/fractory.com\/wp-content\/uploads\/2023\/01\/homepage-vid-v2.mp4\" type=\"video\/mp4\">\n                <\/video>\n                    <\/div>\n    <\/div>\n    \n<h3>Switching Tasks<\/h3>\n<p>Time loss occurring from switching tasks is difficult to measure. But there&#8217;s clear evidence that <a href=\"https:\/\/www.independent.co.uk\/life-style\/multitasking-productivity-levels-research-psychology-david-meyer-a8254416.html\" target=\"_blank\" rel=\"noopener noreferrer\">multitasking and switching tasks has a largely detrimental effect to productivity<\/a>.<\/p>\n<p>Therefore, having one supplier give you quotes vs getting many different has another perk to it. Keeping a &#8220;clean desk&#8221; helps with focus, resulting in <strong>better judgement ability and productivity<\/strong>.<\/p>\n<h3>Where Can I Manufacture This?<\/h3>\n<p>Although we started with getting quotes, the first step is actually making sure to <a href=\"https:\/\/fractory.com\/how-to-choose-manufacturing-sub-contractor\/\" rel=\"noopener noreferrer\">find suppliers who can do the job for you<\/a>. With simple 2 mm carbon steel cutting, you probably know where to turn to. But what if you need 20 mm <a href=\"https:\/\/fractory.com\/aluminium-laser-cutting\/\" rel=\"noopener noreferrer\">aluminium cutting<\/a>?<\/p>\n<p>Our platform lets you choose between all the available materials. Every selection has at least a dozen suppliers ready to do the job. This amount of providers helps to ensure that we can offer a competitive price. And <strong>you don&#8217;t have to find anyone new each time your engineers have used a less common material<\/strong>.<\/p>\n<h2>Cutting Costs Through No Post-Processing<\/h2>\n<p>Are you usually paying extra for <a href=\"https:\/\/fractory.com\/deburring-methods-and-tools\/\" rel=\"noopener noreferrer\">removing burr<\/a>? Or do you just get a pile of sheets that need post-processing? Not with us. Your workers can now save time.<\/p>\n<p>Fractory&#8217;s network of pre-vetted partners only deliver parts that come with a quality guarantee. Every cut metal part is burr-free. Sometimes it comes down to the bench operator&#8217;s expertise, other times deburring is simply necessary (e.g. thick aluminium parts).<\/p>\n<h2>The Cost of Hiring New Talent<\/h2>\n<p>There&#8217;s a clear shortage of new talent on the market. In all honesty, mechanical engineering is not the most popular choice among engineering career paths.<\/p>\n<p>So we can turn back to means of saving time. Using your workforce reasonably and reducing the amount of wasted time should be a priority.<\/p>\n<p>If you have 5 engineers, each of whom saves 20% of their daily time, 4 engineers can do the same amount of work. The extra time can be allocated towards actual engineering and designing. In essence, <strong>you have an extra employee available to focus on providing value, not drawings<\/strong>.<\/p>\n<p><em>Hopefully, we managed to bring out some valuable ideas for any engineering company. If you have some advice we should include here, let us know!<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What if I told you that you can save at least \u00a310,000 per engineer annually? We&#8217;ll show you the maths behind it in this article. Manufacturing cost reduction is usually [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":3902,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[6488],"tags":[],"yst_prominent_words":[2527,3721,3720,3718,3715,3714,3706,3705,3216,2608,34,1133,991,988,912,789,771,157,133,37],"class_list":["post-3825","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-project-management"],"acf":[],"_links":{"self":[{"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/posts\/3825","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/comments?post=3825"}],"version-history":[{"count":35,"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/posts\/3825\/revisions"}],"predecessor-version":[{"id":23865,"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/posts\/3825\/revisions\/23865"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/media\/3902"}],"wp:attachment":[{"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/media?parent=3825"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/categories?post=3825"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/tags?post=3825"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/fractory.com\/wp-json\/wp\/v2\/yst_prominent_words?post=3825"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}