Improving Cost Efficiency in Process Industries

in Production

In a previous article I wrote about the current situation in the cement industry where the demand for cement has dropped considerably as a result of the current economic recession.

In reality the current economic recession is affecting all manufacturing industries globally. The question we must ask is "What can manufacturing industries do to stay profitable in the current economic climate?".

The first thing to understand is that we must accept that for at least the next 2 years, demand for products will remain low. In this situation the primary means by which manufacturing industries can remain profitable is to find ways in which to reduce the unit cost in product manufacture.

If the unit cost for a product can be reduced then in the worst case scenario, even with lower sales, the business can remain profitable as a result of reducing costs. In an improved scenario, the lower unit production cost allows for a price reduction allowing the company to maintain sales in a shrinking market.

When it comes to reducing cost in the production process there are 4 main approaches as follows:

1. PROCESS OPTIMIZATION - This could include reducing energy consumption in the production process or more efficient use of raw materials.

2. ELIMINATION OF PROCESS BOTTLENECKS - In most cases a production process is not perfectly balanced and there are opportunities where by improving efficiency in one area, the efficiency of the production process as a whole can be improved.

3. MORE EFFICIENT USE OF MANPOWER - In many cases there exists the opportunity to make more efficient use of manpower either through automation or through more organised use of manpower.

4. CREATIVE MANIPULATION OF THE PRODUCTION PROCESS - This can include but is not limited to, the use of waste fuels and recycled materials in the production process.

In virtually all industrial production processes there are opportunities for cost reduction that do not require major investment and can be determined in a few days by an industrial process consultant.

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S R Meadowcroft has 1 articles online

My name is Simon Meadowcroft and I have set up a company Positec Consulting LLC, which specialises in providing process optimization services primarily for the cement production industry.

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Improving Cost Efficiency in Process Industries

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This article was published on 2010/04/04