Becoming more cost effective through process optimization
In a competitive business world, businesses use process optimization in order to be more cost effective. It is important for each employee to analyze each part of the development cycle, to make sure each part is essential. In addition, eliminating waste in each employee's work helps with cost efficiency. Finally, it is necessary for the company to find control over the process, to optimize the equipment and procedures in order to become more cost effective.
Why is process optimization so important to make products cost effective?
In today's business world, competition is everything. Companies need every advantage they can get. Each day costumers are demanding better products, in order to get the best value for what they paid for. The way to get ahead in the business world is to manufacture products at the lowest cost possible, or in other words by using process optimization.
Eliminate waste from each part of the development cycle will help with cost efficiency
In the competitive business world, companies use process optimization within their own company by analyzing each phase of the development cycle. It is best to start eliminating waste right from the initial design, in order to make your product cost effective. Later on, the employee tests the next phases of development, and lastly tests the manufacturing of the product to ensure there is no waste. It is best if each employee participates in evaluating and giving recommendations on how to eliminate waste from the product. This also helps with communication within a company, and thus helps with better problem solving, which helps to know if each part of the product is essential. For example, a product being manufactured is a VCR. A company would be smart to try to analyze each part of the VCR to make sure it is essential in making the VCR work. If there is a part to the VCR that isn't contributing to the functionality of it, it must be removed; and will in turn make the VCR cheaper to manufacture.
Removing waste from products is an important part in process optimization. Similarly, removing waste in employees work will help the company be more cost effective. A company that regularly reviews how productive each employee is will be able to eliminate waste thus making their entire company more cost effective. For example, each employee should make sure what they are doing is adding value to the product. If their work isn't contributing to the value of the product, they should not work, thus eliminating waste.
Control helps with cost efficiency
Process optimization depends on how well a company can control the process. For example, if a company can find a way to manufacture a VCR for less money than other companies, it will be more cost effective. The company can control how much it costs to make 1 VCR, but it can't control how many VCR's are sold.In order to control the process, there needs to be reliable and valid measurements. Measuring is a great way to control the product, which in turn will optimize it.
Optimizing equipment and procedures aid in cost efficiency
There are 3 parts to process optimization in cost efficiency. The first is optimizing the equipment or in other words making sure the equipment being used is to its best use and without waste. The second part is to optimize procedures. For example, consider 2 round disks that need to be connected. At first, the employee makes one small hole so that a small screw can be put inside each hole to connect the 2 disks. A way to optimize the procedure and make it more cost effective would be to add tabs to the disks so the 2 disks will lock in place easily, making it easier to line up the disks together. This simple way of making a tab saves a lot of time and money for the company.