Ways to reduce production costs

Economic crises always entail grave consequences, not only for enterprises, but also for consumers themselves, because the quantity of products depends on the level of purchasing power . In connection with the transition to market relations, an important condition for the survival of an enterprise is the ability to properly and efficiently organize its production. Achieving high performance is unlikely to be achieved without controlling the cost of production and sales of products. Determining the reserves of reducing the cost of production plays an important role in all this.

The cost value reflects not only costs associated with the creation and sale of products and services by the enterprise. It has an impact on what will be the end result of the enterprise. Currently, there are a variety of ways to reduce the cost of production. This includes improving the production process, replacing expensive materials with cheaper analogs, automating workplaces, reducing the number of workers, and mutually beneficial cooperation with other enterprises that can produce certain components at lower prices.

Ways to reduce the cost of production are related to the introduction of new, more modern equipment, automation of production processes, the introduction of integrated mechanization, the introduction of advanced types of materials, technology improvement. Thanks to such methods, it is possible to significantly reduce the cost of production. Reducing the cost of production can also be achieved through increased productivity. In the case where labor productivity actually increases, there is a reduction in labor costs per unit of output. Consequently, the specific weight of wages also decreases.

Considering ways to reduce the cost of production, it should be noted, and such a reserve as compliance with the regime of savings throughout the entire operation of the enterprise. The saving mode will be manifested in the reduction of the costs of material resources, the reduction of costs for the maintenance of production and its management, the elimination of losses arising from various unproductive expenses. As you know, a large proportion of the cost of production is occupied by the material costs of production, so even if the saving of raw materials, fuel, energy and materials is negligible, the enterprise will feel a visible effect. To achieve lower costs for raw materials and materials, it is possible due to the improvement of product designs, the improvement of production technologies, the introduction of standards for the expenditure of material values, the use of progressive types of raw materials and materials.

Thus, the factors reducing the cost of production can be divided as follows:

· Increasing the technical level of production - the use of advanced technology and technology, the introduction of non-waste technologies.

· Changes in the structure and volume of products.

· Perfection of management, production and labor organization - improvement of employees' skills, observance of optimal batches of purchased products, improvement of workplace services, implementation of budgeting and management accounting.

Analyzing ways to reduce the cost of production, we can conclude that the introduction of resource-saving technologies is a sufficient effective move for producers. Consequently, the introduction of modern equipment in production and the introduction of rational methods of manufacturing products will lead to a reduction in production costs and the receipt of additional income.