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Cost Control & Reduction With Lean Manufacturing in China

How can a Chinese factory reduce its costs significantly without taking shortcuts with product quality?

We Help Your China Factory Reduce Costs in the Following Locations:

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Expert Advice and Implementation of Cost Control Strategies for Factories

Maintaining a high standard of quality while keeping costs low is not an easy task. However, by looking at both the visible and invisible cost factors that affect both production quality and efficiency, our experts can help you identify areas where you can reduce costs while keeping quality in check.

Our consultants specialize in optimizing processes, improving labour productivity, and reducing costs from seemingly minor steps such as tooling. If you would like to know more, you can schedule a call with one of our specialists who will assess the opportunities for cost reduction in your factory.

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CMC Provides Manufacturing Cost Control and Reduction Services For Various Industries

When Does a Factory Need Cost Control?

Cost control can be implemented at almost any stage of your project, and for almost any type of factory and industry.

In general, cost reduction is a commitment you should consider if you do not see increased efficiencies or marginal cost reduction achieved despite scaling up.

CMC’s consultants analyse your existing processes and design an implementation plan that accounts for your schedules, so that the impact on your delivery timeline is minimal. In the long run, cost reduction can also shorten your production times as we focus on overall efficiency improvement as well.

Where Do We Reduce Cost for China Factories?

Cost reduction is a non-linear process that often requires a very experienced and detailed-oriented eye to spot some less common sources of unnecessary expenses. When our consultants perform analysis on cost, they look into every aspect of the factory operations. From our past experience, there are 4 general areas where we often find opportunities for cost reduction.

In general, cost reduction is a commitment you should consider if you do not see increased efficiencies or marginal cost reduction achieved despite scaling up. Cost control can be implemented at almost any stage of your project, and for almost any type of factory, and industry.

CMC’s consultants analyse every aspect of your existing processes and design an implementation plan that accounts for your schedules, so that the impact on your delivery timeline is minimal. In the long run, cost reduction can also shorten your production times as we focus on overall efficiency improvement as well.

Below are 4 areas where we often find opportunities for cost control:

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1. Increasing Labor Productivity

Often, the productivity of factory workers is much lower in China than in Europe or North America as managers are aware of a few “best practices”.

To increase labor productivity, we typically look for opportunities such as:

  • Reorganization of assembly & packing activities into cells;
  • Reorganization of machining & fabrication activities in a way that necessitates less labor time;
  • Semi-automation, to reduce the amount of time spent on each process;
  • Concentration of operators on their task, reduction of non-value-added work.
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2. Reducing Costs of Non-Quality

Is the factory aware of the money it loses because of poor quality? The main sources of costs related to poor quality include:

  • Scrap or rework;
  • Re-inspection after a problem was caught;
  • Disruption of the production planning (to expedite an urgency);
  • Discounts given to disgruntled customers.
To improve quality, we employ methods like standardizing work and training staff among others.
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3. Reduction of inventory

By reducing set-up times and batch sizes, we get work-in-process inventory turnover down to 1 day in each workshop.

It allows for the following savings:

  • Reduced transportation costs when moving parts between processes.
  • More capital freed up without unnecessary inventory.
  • Lowered storage costs.

For more information on how a factory can reduce inventory, read this blog.

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4. Re-design of products

When redesigning products is an option, we work with you to re-examine product designs with the following questions in mind:

  • Is it possible to streamline the process? For example, using fewer screws by placing them differently.
  • Is it possible to reduce the chances of making errors? For example, avoid symmetrical pieces from being inserted in the wrong side.
  • Is it possible to leverage common components between our different products? For example, only using black zippers on jackets of all colors.

Ready to Set Up Your New Factory in China?

Speak with experienced manufacturing consultants for a no-strings discussion about your project.