Find out how a small reduction in production costs can dramatically increase your net profit
We have been overwhelmed by the enthusiastic responses and the immense interest generated during the PPMA event . Many attendees expressed a keen desire for additional information on wastage reduction and cost-saving strategies in manufacturing . It ’ s great to witness the industry ’ s resolute commitment to enhancing performance .
Throughout the event , we had the privilege of listening to numerous manufacturers share their unique stories and challenges . During the event , we saw three types of visitors :
1 . Some manufacturers recognised that they were lagging behind and were eager to initiate comprehensive improvements in their production processes immediately . adapting their supply chains and restructuring operations . Additionally , 49 % of respondents are planning to increase their capital investment expenditure over the next 12 months . These statistics underscore the majority of manufacturers ’ commitment to growth , alongside their aspirations to reduce internal costs and enhance the bottom line .
In the words of Charles Darwin , “ It is not the most intellectual of the species that survives ; it is not the strongest that survives ; but the species that survives is the one that is best able to adapt and adjust to the changing environment in which it finds itself .”
From the survey , we can see many manufacturers are awakening to the need for proactive adaptation in response to the evolving industrial landscape .
Unlock the Opportunities for Financial Growth
Building on this backdrop of industry dynamics and the drive for excellence , our encounter with a vegetable manufacturer at the event stands as a potent example . The manufacturer was seeking a holistic MIS / MES solution to enhance their production process and reduce costs . To gain a deeper insight into their business , we delved into their annual accounts at Companies House .
What we uncovered was truly eyeopening . This company ’ s impressive turnover stood at £ 400 million . However , a glance at their cost of sales justified a deeper look . The cost of sales had escalated to £ 390 million , leaving the gross profit at a mere £ 10 million . When factoring in other operational and administrative expenses , their net profit ( before tax ) was just £ 5 million .
Imagine this scenario : even a mere 1 % reduction in the Cost of Sales , as illustrated here , would result in a remarkable addition of £ 3.9 million to the bottom-line profit . That ’ s an almost 80 % boost in the bottom line , all from a 1 % reduction in the Cost of Sales . Such a transformation is not only realistic , but also a recurring reality that we ’ ve witnessed in numerous production sites . We ’ re fully geared up to help many more manufacturers achieve similar improvements .
2 . Others believed it was premature to take action and were not yet ready to invest capital in performance enhancements .
3 . A few manufacturers preferred to maintain the status quo in their production processes , opting not to pursue improvements .
Drawing from insights gleaned through the FDF State of Industry Survey , we observed that 54 % of manufacturers prioritise innovation , while 41 % focus on
8 FDPP - www . fdpp . co . uk