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lowering_costsMaintaining margins in the wake of rising costs is one of the most important challenges faced by businesses today. Increases to the cost of raw materials, fuel, transportation and labor present an unending challenge to a company’s profitability. Passing these expenses on to your customers is certainly one strategy for offsetting rising costs, but this may not be the best choice in a competitive marketplace. Another option is taking a closer look at the processes you employ in manufacturing your products or providing your services. In the wake of the recent economic recession, however, most companies have analyzed and cut their process-related costs, and yours may already be running as lean as possible. Regardless of how diligently a company streamlines processes and employs lean practices, a wall will eventually be reached based on the limitations of their existing equipment and physical infrastructure. This is where technological innovation can be introduced as a solution for managing constantly rising operating expenses.

Innovation is usually at the core of effective processes analysis. The goal in analyzing a process should be to find better, more productive and efficient ways to achieve the desired result, which is another way of saying innovation. This often takes the form of changes to operating procedures. Once these procedural options have been exhausted, the next logical step is to change the physical nature of the process itself. Almost always, innovation in the process involves improvements in technology that make the process easier, faster or less wasteful than before. With increased speed comes the real benefit: less time and cost required to produce the same product. The question then becomes: “What does the new technology cost and what is the return on investment?” Given the unpredictable nature of increasing costs, perhaps the better question might be: “What will be the long-term cost of failing to invest in new production technologies?”

By Frank Arteaga, Head of Product Marketing, NAFTA Region
Bystronic Inc., Elgin, IL – Voice.bystronic@bystronic.com