Reducing Indirect Labor Costs in Manufacturing

By Maria Mosto

Complexity drives the impact of hidden costs

Even though electronics manufacturing is already highly automated, humans still orchestrate the operations and provide resource and material management, production planning and process modeling. It’s critical to identify the many individualized automations still used throughout manufacturing today because transitioning to an ever-increasing mix of products and variants creates bottlenecks. In the end, it’s the manual processes and disconnected systems in manufacturing that dramatically increase overhead costs and mask the time, cost and effort invested in making these processes work. We know that hidden costs that go unchecked accumulate, and if the root causes go unresolved, they will multiply exponentially as product complexity increases.

Initiatives like lean manufacturing, for example, can dramatically reduce costs. To be successful, engineers must quickly identify areas for improvements, such as supply inputs, noncontributing processes, and worker errors. But suppose they don’t have the right data and real-time visibility into production. In that case, they can’t determine the root causes of problems, preventing them from creating intelligent and timely corrective action plans.

A faster time to market (TTM) relies on accurately assessing your production resources

The trick for all manufacturers is to know what you can build, where and how you can make it, and if you’re a contract manufacturer (CM) what you can realistically charge for the service to win the contract.

Watch our webinar and learn how to:

  • Optimize to get more from processes in production that you already have
  • Accurately and quickly assess production resources to meet your business goals
  • Quickly check for bottlenecks, validate transported materials, and view resource utilization over time for multiple process alternatives
  • Assess and improve factory logistics and material flow prior to production

Learn how to accurately assess production resources to deliver on time and on budget, while avoiding costly penalties, or passing up bids, and under or overestimating labor and equipment costs.

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This article first appeared on the Siemens Digital Industries Software blog at