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Reduce Cost of Goods

How can you reduce cost of goods in manufacturing? How do you measure cost of goods?

Most manufacturers include direct materials, labour and overheads when evaluating costs. An understanding of all three is needed when trying to reduce the cost of goods, which can contribute to bottom-line KPIs in the business:

Increase profit margin

Company profit margin is directly related to cost of goods and the prime driver behind cost reduction initiatives.

Ensure business sustainability

Companies focussed on long term reputation and brand value need to invest in sustainability. Reducing excess costs enables such investment.

Increase customer satisfaction

Reducing costs via reduced raw material costs or improved efficiency contributes to improved customer service (faster order fulfilment, competitive pricing etc).

Cimlogic Support

Manufacturers can be slow to adopt new technologies which can contribute to improved efficiencies and reduced costs. Cimlogic support clients in achieving goals in areas such as:

  • Reducing the order management cycle (from order to delivery)
  • On time delivery
  • Improving product quality

Cimlogic’s expertise in lean manufacturing and Six Sigma enables clients to understand how to make consistent, high quality products, efficiently and economically, taking into consideration factors such as labour, inventory, and capacity.

If reducing cost of goods in manufacturing is high on your agenda, speak to us today.

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How does Cimlogic help you to achieve this goal?

Explore more business goals:

Connected Supply Chain

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Data-driven Decision Making

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Embrace Digital in Manufacturing

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