Image: Unsplash | Orange robot assembly arms in a manufacturing plant
The manufacturing sector has always strived to lower production costs while keeping quality. However, in the age of AI, machine learning, and digital “everything,” failing to modernize means facing a brick wall of inefficiency. If you still rely on spreadsheets and crossed fingers to manage your plant, it might be time for new strategies.
Understanding how to reduce manufacturing costs starts with coming to grips with where your money comes and goes. Things like direct labor, raw materials, overhead, energy, administrative, and indirect costs all creep in over time. These are the real and big drivers behind the total cost of production.
In the past, improving costs meant an old-school belt tightening. However, nowadays, many businesses are leaning more toward tech-led cost-reduction strategies. These initiatives mean you get the best of both worlds: reduce costs while improving performance.
Smart tools and remote access solutions are key in modern cost reduction. In this guide, you’ll find 10 practical ways to use them to cut costs without cutting corners in the process.
Key Terms and Concepts
To keep things clear throughout, here are a few terms you’ll see in this guide:
- HMI (Human-Machine Interface): The screen or software interface used by operators to interact with machines.
- PLC (Programmable Logic Controller): An industrial computer that controls manufacturing processes.
- PC (Personal Computer): Standard factory-floor or office computer running software for automation, monitoring, or data collection.
- EMS (Energy Management System): Software used to track and control energy use across a facility.
- DaaS (Data as a Service): A cloud-based approach to delivering real-time data insights from equipment and systems.
1. Understand What Drives Total Manufacturing Costs
Image: Unsplash | Stacked rolls of white material in a warehouse
Before you cut costs, you need to have a handle on what’s on the bill. Your total manufacturing costs generally fall into three categories:
- Direct material costs
- Labor costs
- Overhead costs
While that sounds nice and simple, manufacturing budgets unfortunately tend to be anything but.
One important distinction is between fixed and variable costs. Fixed costs stay mostly the same regardless of how much you produce. Variable costs, however, rise and fall with your output.
Knowing which is which makes understanding production costs far easier and helps target the cost-saving measures that will make a difference.
Here’s a quick breakdown of some variable vs. fixed cost examples:
| Fixed Costs | Variable Costs |
| Factory leasingEquipment depreciationSalaried production staffInsuranceERP or software licensing | Direct material costsPackaging suppliesHourly labor costsUtility usage tied to productionMaintenance parts (wear-based usage) |
Most discrete manufacturing operations find that direct material and labor costs account for over 70% of the total spend. That’s a general rule and not gospel. It’s also a useful starting point. Map out your cost structure clearly, and the smartest savings opportunities will stand out.
2. Use Real-Time Data to Spot Waste and Inefficiencies Early
Image: Unsplash | Pile of silver metal bolt nuts
If you can’t see where the waste is happening, you might be stepping right over it. Manufacturers looking to reduce manufacturing costs often focus on the big-ticket items. However, small things like scrap, excess inventory levels, and minor production delays slowly leak and drain profits. Catching these profit-draining leaks early requires real-time data capture.
Modern data-enabled factories rely on automated systems and centralized dashboards to monitor everything from machine performance to energy efficiency. A single line going slightly out of spec doesn’t seem like a big problem at the time, but with the right data, you can spot the issue quickly, saving it from turning into hours of rework and missed quotas.
But how can managers spot these issues on machines churning away on production lines across multiple sites? Remote access solutions like RealVNC Connect for manufacturing enable IT teams and engineers to remotely access factory PCs, troubleshoot control software, or monitor visual inspection feeds in real time. There’s no need to send someone across the floor (or across the country) just to confirm a blinking light.
How DaaS Helps Continuous Improvement and Cost Reductions
Data as a Service (DaaS) platforms can pull live metrics from machines, energy meters, and inventory systems into a single-view resource. You can track aspects such as:
- Scrap Rate (%) = (Scrap Units + Titan Units Produced) x 100
- Downtime Cost = Downtime Hours x Hourly Overhead Rate
- Energy Cost Per Unit = Total Energy Used / Units Produced
Smarter insights mean faster interventions. This translates to serious cost savings and reduced overhead costs before problems get a chance to snowball.
3. Cut Downtime with Predictive Maintenance and Remote Access
Image: Unsplash | A person working on a computer in a manufacturing setting.
If your maintenance strategy consists of “wait until it breaks,” you’re basically gambling with your entire operation. It’s called the run-to-fail model, and in high-stakes manufacturing, it makes about as much sense as using duct tape on a jet engine.
Reactive maintenance does seem cost-effective in the short term. In the long term, however, manufacturing expenses pile up fast. Between lost production time, emergency labor, and equipment damage, you’re burning budget and time.
Want to know the one statistic that says it all? The average automotive manufacturer loses $22,000 per minute of downtime. That isn’t a typo.
Predictive maintenance turns the tables. Manufacturers can track things like vibration, temperature, and cycle counts to spot problems before they bring you to a halt.
Basically, fewer breakdowns = longer asset life = serious cost savings.
With RealVNC Connect, engineers can securely access HMLs, PLCs, and control OCs from anywhere. This access is needed to update software, investigate a fault, or remotely control an unattended machine. It also reduces the need for travel and boots-on-the-ground intervention in labor-intensive tasks.
For OEMs and software developers, RealVNC’s OEM SDK offers embedded remote access right inside your equipment, making reducing production costs not just easier, but built into the system by design.
4. Implementing Lean Manufacturing Principles to Eliminate Waste
Image: Unsplash | A dump truck parked next to a pile of garbage
Picture manufacturing waste in your mind. Vast piles of scrap piled in bins awaiting collection outside are what most of us picture, but it doesn’t always look like that. Sometimes it’s an operator walking 40 feet back and forth for parts, or a machine waiting for a ticket that never arrives. These slow leaks are exactly what lean manufacturing is built to fix.
Lean manufacturing principles are about identifying what adds value and cutting everything that doesn’t. That includes motion waste, overproduction, idle time, over-processing, and even those extra clicks in your MES interface nobody really needed.
Simple lean manufacturing process techniques like 5S (sort, set in order, shine, standardize, sustain) or Kaizen (small, continuous improvements) give teams a practical starting point. These are easy to apply, hard to argue with, and surprisingly effective over time.
An example of these lean strategies could be a mid-sized factory reorganizing its layout based on value stream mapping and reducing transportation costs and motion waste by 10%. There’s no fancy tech involved, just smarter flow and fewer unnecessary steps.
These small adjustments, repeated regularly, form the backbone of any serious, continuous process improvement program. Done right, continuous improvement efforts like these can cut production costs by 20-30% within the first year alone.
5. Improve Inventory Management to Lower Costs
Image: Unsplash | Orange and black forklift with a load of wooden chipboard
If your warehouse feels more like a graveyard for forgotten parts, it might be time to take a look at your inventory management. Excess inventory ties up cash, takes up space, and increases the likelihood of write-offs. However, if you end up swinging too far the other way, you face stock-outs, order delays, and unsatisfied customers.
Smart manufacturers don’t rely on gut instinct to optimize inventory levels—they use hard data. Techniques like ABC analysis (ranking items by value and turnover) or Just-in-Time (JIT) systems can help restore the balance between availability and efficiency.
Modern ERP dashboards, barcode tracking, and automated procurement alerts all make this process easier than ever. No more surprises when a high-volume part is suddenly out of stock.
The shift to these tech-driven inventory solutions is happening fast. Seventy percent of retail and manufacturing businesses have launched digital transformation projects in their supply chain management operations. Why? Better inventory data means lower costs, fewer last-second orders, and more predictable production runs.
Like most things in manufacturing, visibility is power. The power to stop wasting money on shelf-sitters is one you will want in your toolkit.
6. Reevaluate Supply Chain and Procurement Costs
Image: Unsplash | Small container ship leaving port
When was the last time you looked over your supplier contracts? If you’re still accepting the same order quantities and pricing models as you did two years ago, chances are your supply chain is costing you. And you wouldn’t be the only one rethinking things. Sixty-five percent of executives are prioritizing supply chain cost management to improve operational efficiency.
Today’s supply chain management uses real data to evaluate performance, spot hidden fees, and uncover opportunities to reduce material costs.
Simulation tools like digital twins (virtual representation of a physical object or process) can even model the downstream effects of switching suppliers or rerouting logistics, all before you even commit to the change.
RealVNC Connect can support these procurement initiatives for teams working across sites (or continents). Instead of hopping on a flight to check someone’s ERP screen in person, teams can use RealVNC Connect to securely access supplier systems, dashboards, or shared workstations. This means cutting down travel time and enhancing global collaboration.
7. Reduce Energy Costs with Smarter Consumption Tactics
Image: Unsplash | HV switching yard and transformers at night
When machines run 24/7, the kWh meters keep ticking. With today’s prices, unchecked energy costs can quietly eat into profit margins faster than you realize.
Smart manufacturers tackle this head-on by installing automated systems and energy management tools that reduce idle-time usage.
Investing in energy efficiency doesn’t just reduce energy bills, but also improves the overall cost of production. In fact, manufacturers that adopt a smart factory model where machines, data, and people are all tightly connected see up to 30% lower operational costs.
Tools like EMS platforms help with energy load balancing, and with RealVNC Connect, engineers can monitor these dashboards remotely rather than having to roll out of bed at 2 a.m. to check a power spike.
The results are lower consumption, significant cost savings, and systems that only work when needed.
8. Automate Where Labor Is Least Efficient
Image: Unsplash | Automated conveyor belt in a manufacturing setting
Some tasks just aren’t worth delegating to human beings anymore, especially for repetitive, manual ones that deserve a smarter solution. These can be tasks like inspections, packing, labeling, or machine setup. Labor-intensive tasks eat up time, increase the chance of errors, and often lead to mental health issues like burnout.
This is where automation makes the most sense. Simple systems like pick-and-pack arms, conveyor sensors, or vision inspection software can dramatically cut labor costs while boosting accuracy and output. The payoff is consistent results, faster cycles, and streamlining production processes.
It’s not just the startups embracing this shift. Manufacturing industry giants like Boeing, Tesla, GE, Caterpillar, and John Deere have all invested heavily in automation by starting small and focusing on ROI instead of gimmicks.
For the teams managing the tech behind it all, RealVNC Connect allows remote monitoring and control of the PCs and HMIs that run automation software and handle firmware updates tools. This gives engineers the ability to troubleshoot and deploy changes without being physically present. That’s less downtime and reduced labor costs all around.
You don’t need a full lights-out factory to see the gains. Just replace the right tasks, and let people focus on work that needs a human touch.
9. Strengthen Quality Control to Prevent Reword and Scrap
Image: Unsplash | A person standing in a room holding a clipboard
Poor quality control doesn’t just lead to rework, it quietly drives up production costs, delays orders, and tanks customer satisfaction. More often than not, the root cause isn’t skill but visibility.
Real-time sensors, SPC charts, and traceability tools give you the data to spot quality dips before they snowball. Whether you’re tracking first pass yield or scrap rate, the key is connecting these metrics to a continuous process improvement program, not just flagging them after the fact.
With RealVNC Connect, quality teams can remotely monitor and audit systems, view inspection software, and support on-site operators without losing time on travel or coordination delays.
Better quality processes don’t just protect your margins, they also protect your brand.
10. Start Small: Pilot Cost Reduction Strategies for Real Impact
Image: Unsplash | Sticky notes placed on a wall
The most effective cost reduction strategies don’t start with a company-wide overhaul. They start small. One machine, one team, one process.
Choose a high-impact area on your production lines and run a focused test. Define success early by using measurable KPIs like:
- Scrap rate
- Cycle time
- Downtime hours
- Energy use per unit
- Cost per part produced
- Labor input per unit
Track these over time to spot trends and improve efficiency. Small wins can give a team the confidence to scale changes across operations, and failed pilots provide valuable lessons without widespread disruption.
This method gradually helps reduce manufacturing costs, without overwhelming your systems or people. Think of it as controlled evolution rather than instant revolution..
Make Cost Reduction a Core Business Strategy
Sustainable cost reduction starts with smarter operations grounded in data, strategy, and long-term thinking. A structured, technology-supported approach that combines lean manufacturing techniques with targeted automation creates lasting results.
Tools like RealVNC Connect play a key role in your cost reduction strategy. With secure, enterprise-ready remote access, your teams can solve problems faster, support systems from anywhere, and keep your operations moving.
Download RealVNC Connect today and see how remote access can fit into your manufacturing cost strategy.
Most importantly, treat cost reduction as an ongoing discipline. The most competitive manufacturers never stop improving, and neither should you.
FAQs
What’s the difference between cost cutting and cost reduction?
Cost cutting is reactive. Cost reduction is strategic, sustainable, and focused on long-term efficiency.
How does RealVNC Connect help reduce manufacturing costs?
It enables remote access to systems, helping teams cut downtime, reduce travel, and resolve issues fast.
Where should manufacturers begin?
Start with a small pilot on one production line. Track KPIs and scale what works.
