How to reduce manufacturing costs in the construction industry

Posted on 17 May 2016 by The Manufacturer

Do you believe your construction-related manufacturing business is wasting money? If this is the case, you may need to re-evaluate the way your organisation is set up and how it spends money.

Below are some of the simplest and most effective ways to reduce manufacturing costs in order to ensure your company remains competitive and profitable.

Invest in the proper equipment

It can be tempting to cut corners and keep using older equipment to manufacture your construction products. Many manufacturing company owners think they are reducing costs by not spending money on newer systems and machines.

However, newer equipment is more efficient and versatile, while older manufacturing equipment has to be maintained more often and can cause disruptions to production, which all costs money. For example, the products such as garage doors have to be manufactured using specialised equipment that is reliable and produces high quality products on a consistent basis.

Reduce the amount of waste

The amount of waste produced in a manufacturing business should be closely monitored. If it reaches unacceptable levels, the appropriate action needs to be taken. Waste in a manufacturing company takes many forms. In some cases, the manufacturing processes used may lead to large amounts of materials being discarded. In other situations, time, energy and money may be wasted on activities that don’t benefit the business.

Reduce the cost of materials

The less a business spends on materials, the healthier their bottom line will be. You may be currently paying too much for materials, so it’s always wise to look at ways to reduce this cost and keep updated about the latest prices available from different suppliers.

Buying in bulk and negotiating more favourable terms has the potential to dramatically reduce the cost of construction materials. However, always make sure the quality of the materials you source remains high when you decide to reduce this expense.

Invest in staff

The quality of your workforce will often determine how productive and successful a manufacturing organisation will be. This is why it’s vital to invest heavily in your employees. Every staff member should know what their role is in the business and what’s expected of them. The main ways this can be achieved is through comprehensive training and proper guidance when they start work.

Many business owners shy away from this or don’t understand the true value of their employees. However, spending some financial resources on the development of employees is an investment that will reap huge financial rewards for many years to come.

Offer related services

In some situations, it may be possible to reduce your overall costs by expanding into related business areas such as distribution and warehousing, so that you don’t have to depend on more expensive providers for these services.

The practice of providing new services related to your existing product offerings is commonly referred to as servitization. For advice or inspiration on ways in which your business could generate new service-based revenue streams, register to join the Manufacturing Services Thought Leadership Network ( The online network allows you to network with experts in the field and to hear from other companies currently expanding into new areas.


It can be easy to lose track of business costs. This is why it’s vital to identify areas where you can become more efficient and also invest in the aspects of your business that can potentially reduce the costs associated with a construction related manufacturing business.