5 Ways to Increase Efficiency in Manufacturing

  • Huyett Marketing Department
  • 12/30/2021
Efficiency in Manufacturing Blog Hero Image
Efficiency in manufacturing is achieved through the elimination of waste, which takes many forms: wasted materials, time, energy, or material handling. Essentially, waste is anything in the manufacturing process that does not add value for the customer. For example, inefficient manufacturing eats into profit and degrades a manufacturer's ability to challenge more efficient competitors.
This article explores five techniques for increasing efficiency in manufacturing with enhanced part sourcing, manufacturing, and technology. But first, let's consider how businesses calculate manufacturing efficiency.

How Do You Calculate Manufacturing Efficiency?

Efficiency is a measure of the cost to manufacture a certain number of products compared to a standard benchmark rate. The standard rate might be an industry standard, a competitor's output, a target output, or a historical measure.
As a simplified example, a business might make an average of 1,000 widgets per hour with a manufacturing cost of $5,000. The manufacturing cost per widget is $5. During the same period last year, the company produced 800 widgets per hour with $5,600 in manufacturing costs. The manufacturing cost was $7 per widget.
To compare the manufacturing efficiency change, we use the following formula:
standard output / actual output * 100
$7 / $5 * 100 = 140
Based on these figures, the company is 40% more efficient than at the same period last year. Many factors may have contributed to this increase in manufacturing efficiency, including reducing manufacturing costs, accelerating the production line, reducing manufacturing complexity, reducing component lead times, and more.

Manufacturing Efficiency vs Productivity

Efficiency and productivity are often used interchangeably, but they are not the same. Productivity is a measure of total output over a period of time. For example, last month a company made 300 widgets and this month made 400. They increased productivity by 33%.
However, productivity alone tells us little about manufacturing efficiency. It is only one component of efficiency. The company may have increased productivity by hiring more workers. If manufacturing costs increased by 50% while productivity increased by 33%, the operation is less efficient.
In contrast, the company may have raised productivity without increasing costs by introducing faster assembly techniques. In that case, they have increased efficiency and productivity.

5 Strategies to Increase Efficiency in Manufacturing

Your business's goals and operating environment determine manufacturing efficiency best practices. No solution applies to every company. However, here are five strategies that reliably increase productivity while keeping costs under control.

1. Source Components from a Master Distributor

Fast, reliable component sourcing increases manufacturing efficiency. In our explanation of efficiency, we focused on the outputs. Increased outputs or reduced costs boost efficiency. However, outputs depend on inputs — the materials and components used in the manufacturing process. Extra time spent sourcing from multiple vendors or unreliable suppliers often increases cost without adding any value to the customer.
Master distributors are wholesale distributors who sell primarily to resellers. They work directly with major brands, often as exclusive distributors. A master distributor can help your business source the components it needs when it needs them, which reduces investment in inventory. This allows manufacturers to deploy resources to value‑added activities to drive efficiencies.
Additionally, brand owners may offer inflexible ordering options. They're focused on manufacturing rather than sales and distribution, so they expect large orders and prefer to work with a small number of distributors. In contrast, master distributors support orders of varying sizes, from samples and prototypes to production runs of any magnitude.
Efficient manufacturers leverage a mix of sourcing options to ensure they have the parts they need, when they need them. A master distributor can help some businesses achieve greater efficiency, but in other scenarios, buying direct from brands or from other channels may be a better option. Manufacturers should decide which is right for their supply chain on a case‑by‑case basis.

2. Coordinate Component Delivery Lead Times

Manufacturing lead times measure the time from when an order is placed to when it is delivered to your production line. Ordering components is a multi-step process, and it's vital that order preparation, setup, manufacturing, quality control, inspection, and delivery are aligned to maximize the throughput of the manufacturing process. This prevents production line shut downs as a result of a missing component or warehouse space filling up with raw material inventory while other components are in transit.
Agile sourcing is one of the keys to keeping production consistent with demand. Ideally, your business should be able to increase or decrease production in line with product demand. Businesses risk losing orders or annoying customers if they can't source parts quickly enough. On the other hand, if they have to commit to large orders too far in advance, they risk over‑ordering and the associated cash flow issues and warehousing costs.
A master distributor can help improve lead times by providing convenient access to multiple components to provide greater supply chain visibility. Since they keep a large selection of parts in stock, they can serve as an inventory buffer. And, you won't have to deal directly with manufacturers' long lead times, high minimum order quantities, or extended shipping windows.

3. Outsource Custom Parts Manufacturing

Outsourcing the manufacturing of custom parts can reduce costs, free up factory and warehouse space, and decrease manufacturing complexity. It's one of the most reliable ways to reduce manufacturing costs and increase efficiency.
By outsourcing parts manufacturing, businesses:
  • Reduce staffing overheads
  • Focus resources where they generate the most value
  • Reduce machinery capital and maintenance costs
  • Benefit from the expertise and engineering capabilities of a specialist in parts customization and manufacturing
  • Source parts designed and manufactured for their use‑case
Learn more about sourcing custom parts and custom parts manufacturing.

4. Reduce Rework and Rejects with High-Quality Components

Rework or scrapping occurs when manufactured parts fail to meet expectations for quality or industry standards. Most parts are rejected because of inconsistent production processes that result in damaged parts or parts that do not conform to agreed standards and tolerances.
Low‑quality parts can't be delivered to the customer, so they must be discarded or returned to the production line for rework. Rework is a significant cause of reduced efficiency; it slows production and increases costs.
Rework can have many root causes, each with its own solution. Common causes include:
  • Low‑quality components
  • Inadequate training leading to human error
  • Complex, error‑prone manufacturing and assembly operations
  • Damage during manufacturing and transport
Possible solutions include:
  • Sourcing high‑quality parts from a reputable distributor or manufacturer
  • Improved training and documentation
  • Reduced manufacturing complexity
  • Statistical process control

5. Use Engineered Fasteners to Simplify Assembly

The previous section identifies manufacturing complexity as a leading cause of rework. By eliminating complexity, efficiency can be improved in other ways too. For example, redesigning manufacturing workflows to reduce the number of operations, the skill required, or the need for specialist tools can lower costs while increasing productivity.
Utilizing engineered fasteners is just one of the many ways manufacturers can design more efficient workflows. Engineered fasteners do the work of nuts, screws, and rivets, but they are designed to be installed more easily without tools to simplify assembly.
For example, self-retaining U‑nuts can be installed by hand when a worker has access to only one side of a workpiece. Panel and trim clips are tool‑free fasteners that can be pushed into holes or onto studs to join panels.
Engineered fasteners can be installed faster, with less training, and/or with fewer tools than traditional fasteners. They significantly accelerate assembly, which helps manufacturers build more efficient production lines.

How Huyett Helps

Huyett is a master distributor and manufacturer of high‑quality components. We stock a vast range of parts, including:
  • Engineered Fasteners
  • Power Transmission, Bearing, and Shaft Retention Parts
  • Nuts, Bolts, and Screws
  • Key Stock and Machine Keys
  • Grease Fittings and Accessories
To learn more, contact our expert Sales team today.

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