How Can We Effectively Cut Costs in HR and Production Departments of a Manufacturing Unit?

Hi, please could anyone answer this: How can we achieve cost reduction in the HR and production departments of a manufacturing unit? Thanks in advance.

Regards,
Suresh.K

Hi everyone, I would appreciate some suggestions on how to reduce costs in all aspects of the HR and production departments. Thanks in advance.

Regards,
Suresh.K

Dear Suresh,

There are many aspects of cost reduction in respect of HR.

1. The cost of hiring can be minimized. You are aware that there are several options for hiring such as advertisements, headhunters, job sites, campus recruitments, and employee referrals. You need to choose the best option and minimize the cost incurred.

2. If you are using a travel operator, you need to optimize the utilization of the cabs.

3. If printing and stationery fall under HR, then you need to control costs there too.

4. You have to control attrition because every time you hire a new employee, it will increase costs.

5. You have to optimize the cost of training.

6. If you have a canteen, you have to exercise better control over it.

7. Likewise, in HR & Administration, the list goes on endlessly.

8. In production, there are several factors like this to reduce costs:

a. The machine utilization must be maximized; no machine should lie idle.
b. Scrap should be minimal.
c. The cycle time to produce the material has to be improved continuously.
d. Running the diesel generator set should be optimized.
e. Energy conservation measures will bring about cost savings, such as options from solar lamps to conventional lamps.
f. The breakdown of machinery has to be minimized. The time taken to repair the machinery should be minimal, and the time interval between two breakdowns should be maximized.
g. Man utilization should be maximized by improving planning.
h. Work in Process should be minimized.
i. First pass yield must be maximum.
j. On-time delivery must be maximum to avoid penalties for delayed deliveries, if applicable, and to increase freight costs to look for alternate modes of dispatch (Air freight vs. lorry transport).
k. The quality of incoming material should be perfect to prevent rework.
l. Like this, the list goes on endlessly.

Each department is given objectives on factors relating to cost, time, quality, and quantity. The factors PQCDSM have to be under control to be cost-effective.

P - Productivity
Q - Quality
C - Cost
D - Delivery
S - Safety
M - Morale

In case you need any further help, please feel free to write to kannanmv@vsnl.net.

M.V. KANNAN

To provide you with specific solutions, you must clearly describe the situation. Include details such as the size of your organization and the production methods you utilize. By understanding these factors, I can tailor my recommendations to better suit your needs. Please provide as much information as possible so that I can offer you relevant and helpful advice.

I have some cost deduction points that I hope will be helpful for you.

- Reuse one-sided papers.
- Stop unnecessary use of lights.
- If you have canteen facilities, control them by preparing foods according to individuals' preferences and serving them based on demand.

Have you looked into the tools Lean manufacturing has to offer? Lean is how many companies are transforming their operations and have greatly reduced costs.

Reduction of cost cannot be attained by a single employee; it must be a collective effort of all employees, starting from the attender to the boss. Even the boss himself should switch off bulbs and air conditioning when leaving his room, instead of leaving the same task to the attender. All employees must be enlightened on the effective utilization of power, water, stationery, and its consequential benefits to the organization and the nation by erecting display cards at important places in the factory and office premises.

N. V. R. Naidu

It's a small-sized industry covering around 6,000 sq. feet. It is an electric control panel board manufacturer with a canteen facility. Contract workers are engaged, and there are no machineries; it is an assembly unit only.

Thanks & Regards,
Suresh.K