Showing posts with label cost reduction strategies for bakeries. Show all posts
Showing posts with label cost reduction strategies for bakeries. Show all posts
Low Cost Strategies For Bakery Manufacturers
With cost spiralling upwards for most of the components Options for bakery manufacturers are listed below for reducing cost of production and increase the profitability of bakery unit
Raw material availability
To start or move to area where raw materials like Flour , Sugar and Fat are available at low rates or areas where these material are processed in abundance.
Labour Cost
Putting or running plants away from metros or suburbans areas can reduce the overheads cost as living costs in these areas are very low . Governments have setup industrial zones in such areas to help local populations with jobs and help in industrialization of that areas sops like tax and duty exemptions are also given to the investors.
Fuel Availability
Check out for areas where one can source fuel at lower rates for fuel such as Lpg , Ldo , Rfo or CNG .With proper source of electricity .
Logistics Infrastructure
Area to be well connected with rail and road network as to get raw material easily and transship finished good in shorter time .
Market proximity
Not to ignore the market proximity near by as it would reduce the logistic cost of transportation and distribution channels .
Competition
Areas where there are fewer competitors or no competitors can enhance the sales and in turn increase the profitability
Cost Reduction Strategies for Bakeries
With economic slow down and low spending by consumer has forced big bakery manufacturer to implement cost reduction strategies in their plants and operations . Cost reduction programs should be ongoing program rather than Knee jerk program. One should continuous strive for innovation , modification or automation for savings in factory operations .
We can get substantial cost savings in following areas .
Procurement or purchase
Around 60 - 65% cost of product is raw material . Hence savings in raw material purchase can add on to profits.Main raw material s are flour , fat , sugar,Additives .Apart from raw material other materials are engineering items and packaging. Few of the ideas are
Bulk purchasing
Forward buying
Buying from sales tax,excise duty free area
E procurement
Reverse Auctions
Imports or sourcing from across the globe eg Palm oil ,Sugar ,flour etc
Logistics
Cost of transportation inbound and outbound are very high to have efficient logistics management definitely helps reducing cost. Few are listed below
Freight or transport management
Inventory management
Warehouse design and location
Type of transportation
Energy
Energy also contributes to cost of manufacturing hence to reduce cost of energy should be a priority for manufacturers . Few Ideas are mentioned below.
Get an Energy Audit done . Implement their suggestions
Fuel savings through energy efficient burners
Power energy savings through energy efficient motors
Install screw compressors
Alternate fuels -Sourcing cheaper fuel like CNG , LPG , RFO ,LDO etc
Heat recovery from ovens
FRP fans for cooling tower
Packaging
Packaging material also a major factor in cost of manufacturing hence selection of packaging material should be done with care . Few ideas are
Reducing or Modifying shape and size of product.
Reducing Packaging waste through thickness or gauge reduction .
Automation to increase productivity and reduce manpower
Automating bakery processes can result in substantial savings in cost .Areas where we can go autoamtion are
Raw material and finished product handling and storage.
Add Radio frequency dryer to increase the oven productivity .
Packaging processes can be automated from feeding to cartoning and palletizing .
Outsourcing
Few of the processes can be outsourced like
Biscuit Grinding
Sugar Grinding
Promotion packing
We can get substantial cost savings in following areas .
Procurement or purchase
Around 60 - 65% cost of product is raw material . Hence savings in raw material purchase can add on to profits.Main raw material s are flour , fat , sugar,Additives .Apart from raw material other materials are engineering items and packaging. Few of the ideas are
Bulk purchasing
Forward buying
Buying from sales tax,excise duty free area
E procurement
Reverse Auctions
Imports or sourcing from across the globe eg Palm oil ,Sugar ,flour etc
Logistics
Cost of transportation inbound and outbound are very high to have efficient logistics management definitely helps reducing cost. Few are listed below
Freight or transport management
Inventory management
Warehouse design and location
Type of transportation
Energy
Energy also contributes to cost of manufacturing hence to reduce cost of energy should be a priority for manufacturers . Few Ideas are mentioned below.
Get an Energy Audit done . Implement their suggestions
Fuel savings through energy efficient burners
Power energy savings through energy efficient motors
Install screw compressors
Alternate fuels -Sourcing cheaper fuel like CNG , LPG , RFO ,LDO etc
Heat recovery from ovens
FRP fans for cooling tower
Packaging
Packaging material also a major factor in cost of manufacturing hence selection of packaging material should be done with care . Few ideas are
Reducing or Modifying shape and size of product.
Reducing Packaging waste through thickness or gauge reduction .
Automation to increase productivity and reduce manpower
Automating bakery processes can result in substantial savings in cost .Areas where we can go autoamtion are
Raw material and finished product handling and storage.
Add Radio frequency dryer to increase the oven productivity .
Packaging processes can be automated from feeding to cartoning and palletizing .
Outsourcing
Few of the processes can be outsourced like
Biscuit Grinding
Sugar Grinding
Promotion packing
baking oven mixers packaging machines learn more on bakery business
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