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Reducing CapEx and OpEx in manufacturing
Author : Stephen Hayes Managing Director Beckhoff UK
03 October 2023
Manufacturing companies face constant pressure to reduce capital expenditure (CapEx) and operational expenditures (OpEx), whilst also maintaining high productivity and quality standards. Here, Stephen Hayes, Managing Director at Beckhoff UK, explores how innovative technologies and process improvements can optimise financial performance, reduce CapEx and OpEx, and drive operational excellence.
CapEx refers to the investments made by manufacturing facilities in assets such as machinery, equipment, and infrastructure. On the other hand, OpEx encompasses the day-to-day costs incurred in running the operations, including labour, utilities, maintenance, and supplies. Both CapEx and OpEx have a significant impact on a company's profitability and competitiveness.
By effectively managing and reducing these expenditures, manufacturers can optimise their financial performance and allocate resources more efficiently.
Manufacturing facilities face various challenges in managing CapEx and OpEx. Market dynamics and cost pressures often drive the need for cost optimisation. Moreover, inefficient processes and outdated technologies can hinder productivity and increase expenses. To overcome these challenges, manufacturing companies need to embrace efficiency improvements and leverage innovative technologies.
Data analytics and AI have become indispensable tools for optimising production processes and resource allocation. By analysing large volumes of data collected from various sources, manufacturers can gain valuable insights into operational inefficiencies and make data-driven decisions.
For example, a drill press station receives requests from several upstream machines, each requiring different hole sizes and depths. The downstream components then suffer due to the time required for tool change and depth adjustment.
Manufacturers can use processes such as optimised scheduling and sequencing that minimise the tool changeover. By grouping similar jobs together and reducing necessary transitions, the overall setup time can be significantly reduced.
3D printing and additive manufacturing have emerged as cost-effective solutions for prototyping and production. This technology allows manufacturers to produce complex parts and components using less material, reducing waste and lowering production costs.
Instead of buying an additive manufacturing machine, which would have a significant upfront cost, manufacturers should consider working with a rapid prototyping company. By partnering with a reputable rapid prototyping company, businesses can harness the benefits of 3D printing and additive manufacturing in a cost-effective manner.
These companies leverage the capabilities of this advanced technology to streamline prototyping and production processes. With their expertise, manufacturers can create intricate and complex parts using minimal material consumption to not only reduce material costs but also minimise waste, contributing to a more sustainable manufacturing approach.
Moreover, working with a rapid prototyping company enables businesses to reap the benefits of their equipment and infrastructure without incurring significant upfront investments, eliminating the need for manufacturers to allocate substantial resources to set up their own 3D printing facilities.
Instead, they can use the resources of the prototyping company, benefiting from their experience, expertise, quality assurance processes and cost-efficient production methods, without expensive CapEx costs.
While technology adoption is essential, process improvements are equally crucial for reducing CapEx and OpEx. Lean manufacturing principles coupled with automation technologies focus on eliminating waste and improving operational efficiency.
By configuring and programming equipment effectively, manufacturers can establish precise tolerances that serve as indicators when the process deviates from upper or lower limits. This level of accuracy eliminates the need for reworking products and significantly reduces scrap generation — even the most proficient operators cannot match the efficiency of automation when it comes to routine processes.
Supply chain optimisation is another crucial aspect of reducing CapEx and OpEx expenditure. Manufacturers should focus on refining procurement, inventory management, and logistics to achieve timely deliveries and cost reduction. Employing automated inventory management systems and embracing just-in-time practices enable manufacturers to prevent excessive inventory levels and minimise storage expenses, thereby optimising resource allocation. This strategic approach ensures a smooth and efficient flow of materials, reduces lead times, and enhances overall operational effectiveness within the supply chain.
Asset lifecycle management is a vital strategy for improving processes, emphasising the prolongation of equipment lifespan. By conducting regular inspections, addressing potential issues promptly, and implementing preventive maintenance schedules, manufacturers can minimise unexpected breakdowns, reduce the need for costly replacements, and maximise the return on investment for their assets. This strategic approach ensures optimal equipment performance, reduces downtime, and enhances overall operational efficiency, ultimately contributing to improved productivity and cost savings.
By embracing these innovative technologies and implementing process improvements, manufacturing companies can successfully reduce CapEx and OpEx while maintaining high productivity and quality standards. This leads to improved financial performance, optimised resource allocation, and enhanced competitiveness in today's dynamic market.
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