Today, about 82% of businesses fail because of cash flow problems. The harsh truth is that only 40% of small businesses are profitable.
Marketing your business while paying for the manufacturing cost of your products can add up fast. Whether you’re a one-person shop or have multiple business partners, you want to keep costs down.
When coming up with new product designs you might wonder how to keep costs down. You’re in luck! Read on to explore how to keep the cost of designing new and old products down.
How Design Can Cost You Too Much
When it comes to the design of your product, such as water bottle branding, not only can it cut down on your profits, but your energy and time as well. Your packaging design also needs to ensure that it speaks to your ideal customer in order to attract them.
First, it’s important to understand how exactly your products will be manufactured, engineered, and assembled. You might struggle with coming up with a design that keeps cost-effectiveness in mind. Many small businesses make the mistake of designing a product without first making sure that it’s affordable for them.
Consider Different Expenses
Before you begin, think about the long-term and short-term expenses when it comes to your product materials. If you’re going to change a design, think about how that’ll affect the manufacturing process and the cost.
Take into account your recurring costs, these are the regular costs that your company faces. For long-term expenses, you have expenses that aren’t required on a regular basis.
You could have non-recurring engineering expenses as well. These are the costs to develop, design, and test a new product. It can wind up costing you a large amount.
Your design will influence the labor force that you’ll need to have, the raw materials that are required, and the machinery that you’ll need. It can also determine the type of inventory that you’ll need as well.
Before you begin with the manufacturing process, you’ll need to determine the product’s size. This will also help you determine the quality that’s required of the product as well.
Knowing the functionality of your products will help you determine the manufacturing options that’ll work best. Functionality also leads to the necessary materials for the process overall.
Use the Ideal Form
Considering there are various types of material that you can choose from, each will provide you with different benefits and challenges. Along with the material, pay attention to their form. Pay attention to its sheet, bar, and plate forms in order to reduce costs overall.
Another option is to use the material finishes of the products. When you take a look at the different material finishes, this can help you determine the overall cost of the manufacturing process.
In order to save on these costs, consider choosing less refined finishes. They might not have a negative impact on your product’s look either. If it’s going to be produced through CNC machining, the effect could be more pronounced.
The more waste you have when it comes to product design, the more you’ll pay. Instead, choose lean manufacturing in order to reduce the amount of waste that you’ll be using. It can eliminate wasteful parts of the process such as scrap material, defective products, etc.
Defective products occur due to a failure on the manufacturer’s part. Design can also play a role.
In order to avoid this, speak with the manufacturing company while you’re in the design phase. They can let you know about any designs that’ll impact the chances of a defect.
Choose Value Engineering
This is where you focus on the product’s functions in relation to its manufacturing cost. While you’ll want a cost-effective product, engineering services will think about each of a product’s functions.
This includes the design phase. If there are problems during this time, it eliminates anything that’ll add unnecessary consumer values. It’ll help you define what’s needed and what’s not.
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Establishing Affordable Design
Think about how the design process will impact the rest of your business. This will allow you to avoid any unexpected costs.
Pay attention to what your competitors are creating and if they’re designing them in a faster or more inexpensive way. If they are, determine what you can learn from their practices.
Next, you’ll want to think about your cost targets. You’ll be able to manage the cost of each component of the design process. This also includes the overall cost of the product as well.
Lastly, you should have different dates determined far in advance. After these dates, there won’t be any further requirements or requests that take effect. This will help your entire team achieve the different milestones that you set into place.
This is where you have standard products that are built to order without an inventory or forecast. It allows you to create products through mass customization. When you have a confirmed order, then the products can be built.
Determining How to Lower Manufacturing Cost
After exploring this guide, it should give you the framework and ideas for maintaining and keeping manufacturing cost in check. Ensure that you take a look at others including competitors for ideas on maintaining a profit.
Would you like to read more informative content with businesses in mind? Be sure to check out our other articles on our site today. From educational guides to step-by-step how-tos, we have you covered.