Have you tried everything to reduce your production costs, but didn’t get the expected results? After a certain point, it is complicated to reduce expenses without changing the quality of the product. Here are four innovative ways to reduce expenses.
Just in Case & Just on Time
When diversifying your line of products, you may have found the necessity to order more units. Because you are selling too many products, you want to have all of them available for the public to save more time.
In other words, you are producing a lot of inventory, including different commodities. This improves the customer experience, but you pay a high price to store the inventory.
The Just on Time strategy is about producing the common pieces of your products individually, so they take much less space and cost. You have to assemble the product after the client orders the unit, which is more cost-effective.
Are you in a large production company? Small production differences can make a huge change when planning to produce tens of thousands of units for many years. Can you make your product 1% lighter, 1% cheaper, or 1% thinner without affecting the quality? Marginal savings translate into saving millions after a long time.
Switching to Inbound Marketing
You will be able to increase your production budged if you reduce your marketing expenses completely. Luckily, there are many customers to attract customers instead of spending resources on their acquisition: SEO, content marketing, email marketing, lead generation, advertising, and social media marketing.
In the long run, inbound marketing is beneficial for both the business and the customer, which helps to expand the company faster.
Small Loses for Big Victories
Sometimes, you can lose money as a strategy to out compete other companies and dominate the market in the future. For example, you can afford to put more money on production if that will make the business grow exponentially.
This case is much more frequent when looking to launch upgraded product versions. At first, you will be losing money to create that new concept, but you will potentially create a positive economic growth bigger than your debt.
If you have a responsible business relationship with your supplier, you can negotiate a discount in exchange for a longer production contract. You can always find creative ways, such as trucking fuel cards, to negotiate with your producers and get to the most convenient outcome.