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 for small enterprises. Optimization of production is often a forced measure. The commodity market in modern conditions is fiercely competitive. The fight for the client is conducted in a variety of ways. If you look at the situation abstractly, it will become clear that each company seeks to manufacture its product at the lowest possible cost, and to sell it at the highest possible price. This is a general rule, one might even say the basic law of doing business.
In the context of global changes in the world economy, every sane person sees that enterprises producing goods efficiently operate in the southern latitudes, more precisely, in China. For example, in order to produce cars, appropriate 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. Obviously, fuel costs, whether coal, gas or firewood, make up a significant proportion of the cost. Observational analysts have long noticed another point.
In Southeast Asia, the climate is, let's say, hot. And there is no need to heat the factory buildings. Investors and entrepreneurs are well aware and value this fact. If you build a plant in Siberia, you will have to spend a lot of money on fuel. At the same time, ceteris paribus, 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. Given only this one parameter, we can immediately conclude where production will be more profitable.
In this regard, it must be said that production optimization is the implementation of certain measures that are aimed at improving efficiency and generating additional profit. Each event is designed to improve a specific production factor. For example, the main and auxiliary equipment is constantly being upgraded. New, more economical and productive machines appear on the market. for example, in furniture manufacturing, one can observe the process of how one universal machine replaces four simple operating machines.
In other words, instead of four pieces of equipment you can use one. The next production factor is qualified specialists. As practice shows, very often the optimization of production begins with the reduction of staff. In this case, the main thing is to carry out the reduction without prejudice to the enterprise. It happens that the leading specialists are being reduced, and the remaining employees simply cannot 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 entirely justified.
Another production factor that affects the profitability of the enterprise is consumables and components. Business and manufacturing always require lower material acquisition costs. The most effective way is to purchase them directly from the manufacturer, bypassing all the intermediate links. Of course, consumables should be used only in high quality. Otherwise, the market will react negatively to products that do not meet the requirements of the consumer. Thus, optimizing all factors of production, you can achieve a stable position in your market sector.