Business and Production Optimization

In any type of production, one must strive to reduce the cost of manufacturing a product or providing a service. This approach is equally important for large companies and small businesses. The optimization of production is often a forced measure. The commodity market in modern conditions is characterized by fierce competition. The struggle for the client is conducted in a variety of ways. If you look at the situation in an abstract way, it becomes clear that each enterprise seeks to produce its product with minimal costs, and sell it at the highest possible price. This is a general rule, you can even say, the basic law of doing business.

In the conditions of global changes in the world economy, every sane person sees that enterprises for the production of goods are efficiently operating in the southern latitudes, more precisely, in China. For example, in order to produce cars, adequate rooms with heating and ventilation are required. In Russia it is impossible to do without heating. And any optimization of production begins with measures to save thermal energy. It is obvious that the cost of fuel, be it coal, gas or wood, constitutes a significant share of the costs. Observational analysts have long noticed another point.

In countries of South-East Asia, the climate, let's say, is hot. And there is no need to heat the factory enclosures. Investors and entrepreneurs are well aware and appreciate this fact. If you build a plant in Siberia, you will have to spend a lot of money on fuel. At the same time, with all other equal conditions, such costs when placing an enterprise in Vietnam or in China are not required. Thus, the optimization of production begins already at the stage of choosing the region in which the plant will be built. Taking into account only this parameter one can immediately conclude that where production will be more profitable.

In this regard, it must be said that the optimization of production is the carrying out of certain activities that are aimed at increasing efficiency and generating additional profit. Each activity is designed to improve the specific production factor. For example, the main and auxiliary equipment is constantly being modernized. New, more economical and productive machines appear on the market. So, for example, in furniture production, one can observe the process of how one universal machine replaces four simple operating machines.

In other words, you can use one instead of four pieces of equipment. The next production factor is qualified specialists. As practice shows, very often the optimization of production begins with the fact that the staff is reduced. In this case, the main thing is to carry out reduction without damage to the enterprise. It happens that they cut leading specialists, and the remaining employees simply can not cope with the functions assigned to them. But if you focus on the above example with a universal machine, then the reduction of three workers will be fully justified.

Another production factor that affects the profitability of the enterprise is consumables and components. Business and production always require a reduction in the cost of purchasing materials. The most effective way is to acquire them directly from the manufacturer, bypassing all intermediate links. Of course, you need to use consumables only of high quality. Otherwise, the market will react negatively to products that do not meet the requirements of the consumer. Thus, optimizing all the factors of production, it is possible to achieve a stable position in its sector of the market.