Besides having good resource management, manufacturing companies need to think about the production costs flow. Some people think that if the company reduce production costs, it will reduce the quality of the products that are produced by manufacturing companies. The fact is not entirely true.

You can still reduce production costs by doing the right strategy. The first thing you should do is to analyze the data for the past few years to see which parts can be reduced. Here are some tips to reduce production costs for your manufacturing company:

Internal Savings

The first way to reduce production costs is by making savings on the internal part. Furthermore, the production cost of raw materials includes labor costs and raw materials, the company is obliged to pay employee salaries and raw material expenditure. However, it does not mean that the company cannot do savings.

Ordinary manufacturing companies reduce operational costs by optimizing raw material spending, operational efficiency, and reduce waste during production.

Look for Cheaper Suppliers

The second way to reduce production costs is by finding cheaper raw material suppliers. Furthermore, you can make a list of the cheapest raw materials suppliers and you can start contacting them to elaborate.

Manufacturing companies could also ask employees whether they have a reference to cheaper and good quality raw material providers. This will certainly save a lot of time and money.

Inventory Optimization

The third way to reduce production costs is by using existing inventory optimization. You must check the inventory carefully, in order to take advantage of existing supplies. Because a lot of inventory is indeed still piled up in the office.

By doing inventory optimization, manufacturing companies can optimize goods that have started to enter the expiration date. Therefore, doing inventory optimization is very important to check the expiration date of your item.

Go Green

The other way to reduce production costs is by using eco-friendly methods or go green. Besides being good for the environment, go green movement could also save production costs. Moreover, the go green policy is also able to improve the company's brand image, employee morale, and make the environment around the factory or company healthier.

In addition, the company can implement to go green in a simple way. For example, using a light sensor that only on when there are people in the area. Furthermore, you can also reduce paper usage by making reports online, buying energy-saving equipment, and doing equipment maintenance regularly.

Using Supporting Technology

The other way to reduce production costs is by utilizing supporting technology. You can use technologies such as ERP Manufacturing to increase productivity and increase efficiency and also reduce production costs for your manufacturing company.

In addition, supporting software can also measure the performance of each employee and make efficiency. This technology can also be used to get the benefits from your business to reduce production costs.

Well, those are 5 tips to reduce the production cost in your company. If you want to reduce the production cost, you should look for it in a strategic industrial area because it is close to transportation routes.

One of the industrial areas that have a strategic location is Karawang New Industry City (KNIC). Located close to the capital city of Jakarta and has plenty of transportation access, make KNIC a suitable area for building warehouses and renting warehouses.

In addition, KNIC has 6 national infrastructure accesses such as the Jakarta-Cikampek toll road, Jabodetabek LRT, Trans Java lines, Jakarta-Bandung Railway, Kertajati International Airport, and Patimban port. KNIC is also supported by facilities such as premium electricity, natural gas, and fast internet connections to support the performance of manufacturing companies.


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