Save on your cost price with these five tips
In a market where your competitive position is important, the (cost) price is always under pressure. Nobody wants to compromise on quality, so you have to develop and produce smartly to stay competitive. That’s why we’re giving you five tips to save on your cost price.
It is not always popular to ask about the (structure of the) cost price, but openness can lead to greater understanding, better cooperation and perhaps even lower costs. Discussing the (desired) price of your product in good time gives us a better overview of the entire process.
After all, cost savings are not only to be found in the purchasing phase (purchase of materials), but also in devising creative (and cheaper) solutions for production. We are happy to list the five best tips for you:
- Clear specifications and requirements
- Choose the right materials
- Optimise the design for production
- Order in large quantities
- Flexible timelines
The more specific the drawings, specifications and requirements are, the easier it is for our engineers and work planners to get started. That saves time. But above all, it gives us the opportunity to contribute ideas about the most suitable materials, formats and production methods. Sometimes this input goes beyond technical details alone: for example, it can also cover pre- and post-treatment, assembly and transport. This can also have a significant impact on the cost price.
Material selection
As mentioned earlier, we work independently of materials. When we receive an order, we always look at the materials specified. Stainless steel is not always necessary, and aluminium or a 3D-printed item can also be a good substitute. Only if this fits within the set requirements and objectives, of course. Sometimes it can be worthwhile to make a prototype with a new type of material. This may seem to increase costs in the short term, but it can certainly save a lot of money in the longer term when purchasing large quantities.
Optimisation
There is no single specific design principle that can contribute to cost savings, but we are happy to help you explore the possibilities. For one customer, we recently switched from manufacturing an aluminium component from a solid block to an extrusion profile. This resulted in less milling time, faster turnaround times and less material waste. The relatively small investment in an extrusion mould and the creation of a stock of base material (extrusion profile) resulted in significant time savings and a reduction in costs in this case.
Thinking along with the customer starts with the drawing. Some drawings are on the edge of manufacturability. By looking at the feasibility of the drawing and additional requirements in advance, you can avoid getting stuck in your production process or encountering (more expensive) adjustments.
Think big
Whether we need to purchase materials or set up machines for small orders or for larger (repetitive) orders certainly affects our cost price. Purchasing larger quantities of base material and adjusting our stock management accordingly results in cost savings that we are happy to pass on.
Thinking big is not only about the number of products, but also about investing in a long-term customer relationship. Guaranteed recurring product series ensure that we can purchase materials at the right (cheapest) time.
The cost price is also positively influenced by bulk purchasing. Large bulk purchases reduce the number of transport movements and packaging units, which is also reflected in the prices of the materials.
This long-term customer relationship is also reflected in (framework) contracts in which we fix prices for a longer period of time. In addition to certainty, this also provides purchasing advantages. Such a contract is of course not drawn up unilaterally, but is discussed in detail with the customer and our sales team. Wishes and questions are first inventoried in order to arrive at a good solution together.
Flexible
If you are flexible in your planning, this can also lead to a reduction in costs. We can plan better for requests that are made well in advance. If the delivery date is not fixed and we have the option of being flexible with the planning, this also has advantages. By planning our machines as efficiently as possible, we achieve cost savings.
Rush orders are still possible, but may result in a number of additional costs. Sometimes we have to pass on changeover costs, which in turn drives up the cost price.
Transparency and cooperation
In short, if you want to save on costs, transparency and cooperation are key. If the wishes and requirements are clear and there is open communication about what is needed and what is possible, we can work together to achieve the best price. We are happy to use our knowledge and experience to help you with your request and requirements. By working smarter with other materials, better planning and different processes, we can work together to create a better product at a good price.
Challenge
Do you have any questions about our tips? Or would you like to discuss your product? Please contact us to make an appointment.