10 Ways to Lower Manufacturing Costs
Do you have a good sense of the overall value of your suppliers? Are they working to make a difference in your product development and speed to market? If the answer is no, you should find a new supplier.
Alexandria Industries will always look at different ways to help customers adapt their product designs to the manufacturing process used to make them, while identifying and discussing the associated cost drivers. Check out these considerations and why they matter, as you make decisions with your suppliers to develop your products.
PDF| 1. Early Involvement of Your Suppliers | ||
| Considerations | Why it Matters | Customer Example |
| Understand your design to development processes to determine how you quickly get to a successful design that’s manufacturable | Your supplier should bring value during the product development stage, providing guidance on materials, processes, design, and such. This can save money, time, and frustrations. | Initial Product Request: In 1966, a customer came to us looking for a partner to produce products needed for a new business in the marine market. |
| Ways to save effort and frustrations of your team | Produced component: Boat gunnels for some of the most sought-after fishing boats today. | |
| Supplier experiences/ histories and values, and if they align with your needs | Results: A strong partnership remains over 50 years later. | |
| Develop strong partnerships with suppliers willing to work together to produce great components | ||
| 2. Manufacturability | ||
| Considerations | Why it Matters | Customer Example |
| Keep all manufacturing processes in mind during design stage | Your team is very smart. But do they have in-depth knowledge of the many manufacturing processes available for the component they are attempting to manufacture? It’s nearly impossible to be experts in all areas. Select suppliers with broad expertise who are willing to take the journey with you. | Initial Product Request: A small customer’s medical component machined from steel was breaking. This drove interest in converting it to an aluminum extrusion. |
| Understand how one process can affect others | Produced component: Design improvements were made and the component converted to an aluminum extrusion. | |
| Understand what features are possible with different processes (extruding or machining sharp corners) | Results: The extruded component completely outperformed the original steel component, with no breakage. See this customer success story. Accuray: An Ounce of Extrusion, A Pound of Cure | |
| Be open to alternative product development processes (plastic molding, aluminum extrusion, casting or machining) | ||
| Consider incorporating features, such as threads, that add value to your profile | ||
| 3. Material Selection | ||
| Considerations | Why it Matters | Customer Example |
| Be open to alternative material (alloys, ferrous, plastic, brands) | Many design engineers believe they choose the right alloy for their extrusions, or the best injection molding material, etc. They may not know there are comparable materials that will produce similar or better results. Keeping an open mind could save you money and produce even better results. | Initial Product Request: A heat sink produced from a die cast was porous and did not generate the thermal dissipation needed within the enclosed electronic unit. |
| Think through surface finish and wall thickness needs that will support a product’s functional requirements | Produced component: A redesigned aluminum extruded heat sink. | |
| Understand material aging, heat treating, and tempers | Results: Consistent aluminum extruded heatsink (thin walls/fins); eliminated surface porosity to achieve the desired thermal dissipation; reduced component weight by two-thirds, saving material costs. | |
| 4. Near Net Shape/Reduced Operations | ||
| Considerations | Why it Matters | Customer Example |
| Incorporate screw boss / screw chase features (reduce machining) | Secondary processes take time, and add costs. Many times, aluminum extrusions can be designed to reduce the need for secondary operations. When selecting suppliers, understand the importance of their questions about mating parts, end use and finishing requirements. | Initial Product Request: Three different extruded profile shapes to create an enclosure in an electrical component. |
| Incorporate assembly features; hinge, circuit board groove (reduce machining) | Produced component: Two shapes with an extruded hinge feature/functionality removed additional processes (e.g., welding). | |
| Incorporate mating features (reduce welding and assembly) | Results: Purchased one less profile; easier assembly; less ordering, stocking, product damage, or likelihood of being outdated. | |
| Chemical finishing (reduce mechanical finishing) | ||
| 5. Multiple Services/One Supplier | ||
| Considerations | Why it Matters | Customer Example |
| Think through ways to lower administrative costs/time | Price usually drives many decisions. But there should be a dollar value assigned to peace of mind and ease of work. Think about the value (saving time, money, hassle, etc.) it can bring you in selecting a supplier that provides many services. | Initial Product Request: An aluminum extrusion for a pickup truck accessory. |
| Think about how to reduce lead-times | When using multiple suppliers, consider the time it takes to determine where, when and how a product defect happened. Now think about having one supplier doing many services and getting your work done right, or making it easier to identify and correct errors that may occur. | Produced component: Extrusion and plastic end caps |
| Consider ways to resolve design challenges quickly | Results: Purchasing components from one source easily reduced headaches and costs. Our assembly services saved the customer shipping costs and reduced risk from freight damage. | |
| Think about using one supplier to simplify freight logistics, reduce POs, reduce trips, save time, reduce possible freight damage, lower shipping costs and reduce (re)packaging | ||
| Consider ways to reduce inventory and WIP | ||
| 6. Tolerances | ||
| Considerations | Why it Matters | Customer Example |
| Determine critical-to-function (CTF) tolerances | You want the best component possible. Does it require many or all of your tolerances to be CTF? Your supplier should work to assure that your CTF tolerances are consistently attainable. Having more CTF tolerances than you need or can be achieved consistently, can increase your costs. Be certain that the tolerances you declare as CTF are CRITICAL to FUNCTION. | Initial Product Request: Component machined from casting for the firearms industry. |
| Determine capability requirements – PPAP | Produced component: Component tolerances met our inspection methods but failed at the customer. | |
| Evaluate Geometric Dimensioning & Tolerancing | Results: After reviewing the chosen inspection method, we learned the customer changed its method. Once our inspection methods aligned, the customer received acceptable products. | |
| Define inspection methods | ||
| 7. Surface Requirements | ||
| Considerations | Why it Matters | Customer Example |
| Consider expectations on exposed or visible surface needs | Some surface requirements require special handling, packing, more scrap, etc. Is your component put inside another component or device? If so, how important is a shiny, blemish-free surface? If your component is used to build a jewelry display cabinet, surface finish is clearly important. Consider the level of surface requirements your components truly need. | Initial Product Request: A defect-free extruded component for the industrial fan market. |
| Think about type of protective finish to apply (paint, anodize) | Produced component: A defect-free surface finish on raw aluminum extruded components with no chemical or mechanical finishing. | |
| Understand differences between surface roughness vs. surface defects | Results: We developed realistic surface finish criteria, established special product handling, and created new packaging to avoid defects during downstream processes. No rejects for 15 months. | |
| Understand unavoidable process conditions (extrusion run-out surface, injection pin, and racking marks) exist | ||
| Understand handling and packing requirements, methods | ||
| 8. Finishing | ||
| Considerations | Why it Matters | Customer Example |
| Think through finishing requirements for end product use needs | Adding a finish to your component can extend its life and enhance appearance. Understanding your component’s end use and needs, are key to successfully selecting the best finish for your product. Sometimes there are different ways to accomplish the same end result. Do you know what they are? | Initial Product Request: An extruded component with a bright blue (distinct color) anodized finish for the hand tool market. |
| Consider the impact on dimensions after finishing | Produced component: Produced an ideal colored component that met customer specification. | |
| Determine racking requirements | Results: Because anodizing requires racking that can leave marks, we discussed this before producing the component. Everyone agreed on one location – where the racking held the component for anodizing – will show a mark. | |
| Understand why plugging threaded holes is necessary | ||
| Determine masking requirements | ||
| 9. Packaging Requirements | ||
| Considerations | Why it Matters | Customer Example |
| Think through shipping location and unloading constraints | The best components are only as good as they are when they are unpacked at your location. Finding packaging that works for your product without going overboard is a challenge. The right packaging may require flexibility and adjustment. | Initial Product Request: An aluminum solar racking system. |
| Understand packing material constraints | Produced component: A U-shaped, fully assembled racking system. | |
| Determine method of shipment (common carrier or supplier truck) | Results: A custom packaging system maximized freight capacity and minimized potential product damage. We reduced the number of shipments, while ensuring the components arrived at the job site in good condition. | |
| Understand the impact on surface requirements | ||
| 10. Lot Sizes/Ship Quantities | ||
| Considerations | Why it Matters | Customer Example |
| Think about optimal lot sizes and packing quantities | Manufacturing the best components requires us to scrap/recycle product along the way that does not meet our quality expectations. We allow for this in our production. This means there is a possibility of over-producing, or under producing your order. Also, each manufacturing process has its own optimum build lot size. The goal is to get as close to zero as possible to help lower inventory costs. Be open to +/- ship quantities. | Initial Product Request: Aluminum extrusions for office/home furniture and structures. |
| Understand extrusion batch sizes, machine build sizes, chemical finishing racking sizes | Produced component:Varying components – extruded and machined – for office/home furniture and movable wall structures. | |
| Understand fluctuations in lot sizes and +/- ship quantities (higher +/- quantities = lower cost driver) | Results: Customer agreed to +/-10% ship quantities due to the natural occurrence of component defects that happen during extrusion, handling and fabricating processes. | |
| Think about inventory costs | ||
If you consider at least one thing from this list of 10 ways to lower your manufacturing costs, we believe you will be happy with the results. Then we hope you will make time to consider the other nine ways. We wish you the best success with your product development. Remember, Alexandria Industries is here to take the journey with you.