Lowering Costs Through Efficiency with a Scalpel, Not an Axe

Sean Hart, Chief Executive Officer And Managing Partner, POWERS

Lowering costs can feel overwhelming, but it’s a chance to make your operation leaner and stronger.

Done incorrectly, slashing expenses can hurt quality, slow production, or undermine morale. Done right, efficiency gains boost your bottom line without missing a beat. For large-scale manufacturers, the key is knowing where to start and how to make the savings sustainable. Let’s walk through practical steps to find waste, streamline what matters, and keep your plant running at its best. You’ve got this—here’s how to do it.

Why Efficient Savings Win

Chopping costs blindly is a trap. Slash too deep, and you lose skilled workers or delay critical maintenance, costing more in the long run—sometimes 125% more than you save.

Efficient savings come from streamlining waste, such as excess overtime, overstocked inventory, or emergency repairs that don’t add value for your customers.

Studies show that focusing on efficiency in these areas can lower costs by 15-20% while maintaining high quality. It’s about working smarter to keep your operation sharp and profitable.

Start by Looking Closely

Get out on the floor with a Gemba walk. Watch how work happens—shift changes, material flows, machine setups. Are workers standing around waiting for parts to arrive? Are machines idle too long? One plant spotted 2 hours of daily downtime from slow handoffs, eating up thousands weekly. Next, time your processes—measure how long tasks like assembly or inspections take. A fabricator found that 20% of inspection time was wasted, an easy fix. Use a stopwatch or simple spreadsheet to track labor, inventory, or maintenance inefficiencies. These steps show you where costs hide.

Focus on What Costs Most

Not every cost needs trimming. Zoom in on three big areas: labor, inventory, and maintenance. For labor, overtime, and poor schedules drive up expenses—streamlined scheduling can lower overtime by 15%. For inventory, excess stock ties up capital. Industry data shows that 20% of working capital can be stuck in overstock. Just-in-time delivery frees it up.

For maintenance, unplanned breakdowns are costly, hitting manufacturers for $1 trillion a year. Predictive maintenance catches problems early.

Rank these by biggest savings versus impact on output or quality to decide where to act first.

Make Savings Work

Once you know where to save, streamline carefully. For labor, adjust schedules to match demand, stagger shifts, or cross-train workers to eliminate idle time. For inventory management, set tighter reorder points and work with suppliers for smaller, more frequent deliveries to boost efficiency. For maintenance, add sensors to monitor equipment health; many plants use automation to spot issues before they become costly. Test changes on one line or shift first to limit risks. Check results weekly to ensure savings don’t slow production or compromise quality. Precision makes efficiency pay off.

Keep Savings Going

Savings won’t stick unless you track them. Use a real-time data tool, like DPS, our Digital Production System, to monitor critical KPIs like startup scores, production output, downtime percentage, units per labor hour, and total capacity utilization. One plant lowered expedited shipping costs by 10% by checking inventory daily. Review your savings monthly to adjust for changes in demand or workflow.

Industry benchmarks show sustained efficiency gains can save 15-20% over time.

Stay on top of the numbers, and your savings will build a stronger, leaner operation.

About POWERS

At POWERS, we guide manufacturers to operational excellence with tailored strategies and real-time insights. DPS, our Digital Production System, provides tools for tracking KPIs to sustain cost savings and performance improvements. Ready to lower costs through efficiency? Let’s talk.