Cost Reduction Strategies: Energy savings in manufacturing industry

Cost Reduction Strategies: Energy savings in manufacturing industry

E -procurement

Sourcing for goods and services is crucial part of the supply chain yet one that until late has resisted automation .For many companies finding the best materialsor services at the best price and under the most advantageous shipping arrangements is a laborious process.Esourcing includes using web based technologies to automate and streamline the identification , evaluation ,negotiation and configuration of the optimal mix of suppliers ,products and services into supply chain network that an rapidly respond to changing market demands . supporting the complete sourcing cycle will require companies to cconfigure the appropriate mix of technologies , startegy and product and supplier expertise into e-sourcing frame work.
The world of web based purchasing , with market places , exchanges ,and auctions , is still evolving .The advantages to being able to scour the world for the best goods at the price sounds great theory ,but is not always great in practice .The business world is moving towards e-transport , e-logistics ,e-sourcing and e-procurement . These web based methods helps into cost reduction intiatives
E-procurement has following advantages
reduced transaction costs ,in an area of the total spend that dwarfs what’s spent on indirect goods
reduction of stocks of obselete products and inventory for those products ,owing to more timely reaction of supply to demand
reduced level s in general, through reduced cycle times
quicker reaction to changing market trends ,enabling a manufacturer to gain competitve edge in new product dvelopment .
redeployment of procurement and other professional s away from transaction processing activities toward work that is more strategically important such as global
market research and analysis ,long term negotiations with strategic suppliers ,supplier development and researching of new technology tools that can elevate procurement and supply chain management peformance

cost reduction startegies

Manufacturing Outsourcing

Industries have now days started a new trend of outsourcing manufacturing hubs to new locations .

This make sense as putting up a new plant with equipment requires lot of money and time . Getting closer to the market with outsourced partners can save huge amount of cost .

Following are the advantages of outsourcing of manufacturing .

1. No major investment in regards to capital equipment

2. Utilising partners or acquired units strengths in terms of market and labour.

3. Cost savings in respects of freight

4. In case of failure exit is easy without any major problem .

5. Raw material could be sourced locally which again results in saving

6. Can be done in any part of the world.

Precautions has to be taken for objectives which are clear to the contract manufacturer .

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Technology to be transferred to the contract manufacturer .

Waste management

All manufacturing activity generates waste . tons of garbage and waste are dumped on earth or seas. A little thought and using techonology can reduce these waste .These waste includes packaing materials , metallic scrap ,biodegeradble stuffs etc.

Some of methods can be introduce to reduce waste

1. Segregation of waste into recyclable and non recyclable

2.Recyclable items can be sent to primary manufacturers like steel scrap , paperboards , wrappers and laminates

3. putting up incinertors

4.Dumping garbage for landfilling

5. Giving lubricants and spent oil for recycling .

6. Reducing waste by improving processes.

7.Recording and putting up data for waste generation.

8.Implementing programms/audits for reduction in waste generation.

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Energy savings in manufacturing industry

Energy plays a very important role in industry , Industries could be classified into heavy energy consumer , medium energy consumer and low energy consumer . Organization have started doing energy audits in their plants , offices etc .Such studies has highlighted waste of energy and requirement of energy efficient technology.
Some areas for energy cost reductions.
OFFICE:
Large Corporations or factories have bigger administration offices like accounts , sales , purchase,human resources ,production planning ,canteens ,rest rooms ,common rooms etc .Each dept or sections has certain utilities like air conditioners , photocopiers ,fans ,air washers ,lights etc .Cost reduction in energy bill can be achieved through proper monitoring optimization of equipments
LIGHTING
HEATING
COOLINGFANS

PLANTS
Any manufacturing unit would consume energy for its production purpose. With monitoring and proper utilization of equipments We can have substantial cost reduction in energy cost .Energy could be in various form thermal or electrical.

PRIME MOVERS ( MOTORS )
AIR CONDITIONING
COOLING TOWERS
BOILERSFURNACES /OVENS
REFRIGERATION & AIR CONDITIONING
FUELALTERNATE
ENERGY ELECTRICAL

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Cost reduction strategies

SAVINGS FOR PROFITS
©
BY SUBODH KUMAR SINGH

In today’s world when Corporate are struggling for profits and with fierce competition in the market, cost reductions, productivity enhancement and lean organizations have become today’s mantra s for survival.Folllowing are the key area where you can implement cost reduction methods with significant results.Cost distributions are
Raw material : 60%
Fuel: 6%
Manpower:11%
Adverisement :5%
Logistic:9%
Taxes : 5%
Maint & others : 4%
Following are major areas of
1. Raw material procurement:
a) Bulk buying
b) Opportunity buying
c) Make or buy
d) Annual Rate contracts

2. Logistics- Inbound and Outbound:

a) Route mapping
b) Loadability

3. Warehouse and Stores:
a) a.Low inventory
b) Space management
c) EOQ
4. Manufacturing Process (Production) :
a) manufacturing
b) Automation
c) OEE

5.Energy, fuel & Water
a) Motors
b) lighting
c) compressors
d) fuels
e) recycle
f) Waste water management
6.Information Management
Enterprise Resource management

7. Human Resources
Out sourcing

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