Consumer electronics and hardware are staples of everyday domestic life. As such, the companies behind these products need to be performing at the top of their game. If this is you, you need to analyze whether or not your business is as efficient as possible, in order to provide the best value to customers.
The fact that electrical items are so common means that it’s also a viable business option for newcomers. But, it goes without saying that standards have to be impeccable, so it’s not for those looking for a quick buck. If you’re in charge of an electronics business, this article will help you understand if your company is running as efficiently as it could be.
It’s an expensive industry, so you have to cut costs and manage processes wherever possible!
The manufacturing process
This is the bread and butter of your existence, and must be streamlined to perfection. Caring for your resources and using them wisely is essential.
You’ll be manufacturing in bulk to produce more products to ship. So, if there’s one fault in the process, the whole operation could crumble and a lot of products could prove faulty.
Firstly, assess the quality of your components. If they’re cheap, this will be reflected in the finished product. It may be worth buying higher quality materials then hiking up the price for the consumer. You get what you pay for!
Implementation of material traceability will help you track the materials and products you produce. You have to keep track of every part you use, after all. This allows you to look for areas where you could cut down or improve. Knowing which materials are used where ensures that you’re getting the most out of your components.
A better organization of components can also reduce waste, which saves time. Waste needs disposing of, which takes up man hours. It also costs money to dispose of, so eliminating the source is vital.
Cutting down costs
Let’s say you build a product that consists of 10 parts. Those parts cost $2 each, for a rough production cost of $20. You’d have to sell thousands of these items to even make anything worth shouting home about. You’d also have to buy in thousands of parts, and if you find that the product doesn’t work, you’ve wasted cash.
Instead, focus on higher-quality items. Your initial costs will be higher, but so will your profit margins. Think 10 parts at $10, for a cost of $100. It’s a quality item, and you can sell it at three times the build cost.
Elsewhere, you can cut down maintenance costs by using software to track the temperature and pressure of machinery. Knowing how well a piece of equipment is working is vital, especially in manufacturing. You’re utterly reliant on your equipment, and literally can’t afford for it to fail.
Lastly, consider importing inventory parts from a different source. If you pull something in from China, weigh up the shipping costs and the cost of the part itself. You may be able to get it cheaper elsewhere. In fact, China is known for its electrical equipment, so this would be a good source to start with.