In this article, David Griffin, Principal Consultant in Manufacturing Innovation and Automation explains why it’s necessary to dig deeper when looking for ways to significantly reduce manufacturing costs. He recommends taking a systems approach and re-examining six hidden cost areas.
When FMCG manufacturers look to cut production costs, they often start in the wrong place.
Their instinct is to focus on quick fixes – using cheaper materials, reducing scrap or trimming supplier margins – but these moves rarely deliver significant or lasting savings. Worse, they can lock out bigger gains by treating areas such as supply chains, manufacturing process or business models as being ‘untouchable’. Effectively eliminating some of the biggest opportunities before the work even begins.
True manufacturing cost optimisation doesn’t come from trimming around the edges but from uncovering what’s embedded, normalised and probably costing much more than you realise.
Silos block savings
One of the biggest problems is cost-cutting often happens in silos where designers optimise without involving manufacturing; production assumes logistics constraints; and procurement is excluded from design. But it’s the early decisions made on product designs where most of the cost is typically locked in before moving into production.
Add cultural inertia, ‘we’ve always done it this way’, and narrowing the scope of what’s considered to be changeable and there’s usually little room left for transformational thinking.
Fresh eyes, new value
Internal ops teams often know something needs to change, but they don’t always have the authority or time to address it. They’re too busy keeping the line running.
External consultancies are frequently brought in to help suggest potential cost savings by bringing new insights and experience from outside the sector. They can challenge assumptions, spot what others might have overlooked, and can connect design, engineering and business model thinking.
They can also act as interpreters between teams (eg product owners and engineering) who may not speak the same language. But they need to have the breadth of engineering and commercial skills, and to be given the authority to interrogate the wider opportunities for change.
Going beyond marginal gains
When companies ask external consultants to help they often expect them to validate their existing cost-saving ideas: such as using cheaper inputs, fine-tuning routine processes or potentially making small operational changes. The company’s senior managers imagine a familiar cost curve, just slightly lower.
But the actual cost profile of a production system is rarely so tidy. In many cases, the biggest value savings don’t come from marginal gains but from questioning constraints that have never been challenged before.
Long daily start-up times, machines underperforming or high levels of waste can become accepted as ‘just the way the line works’. These inefficiencies are embedded in the system, they become normalised over time and typically go unchallenged until a fresh perspective brings them into focus.
Documented vs. actual practice
Internal teams assume they know how their factory runs. Yet deeper investigation and conversations with operators reveal a different story, and what’s documented diverges from what actually happens on the production line.
Standard operating procedures rarely capture hidden tweaks and workarounds that the production team uses during line startup or to keep things running smoothly. And when these undocumented behaviours vary from operator to operator, they cannot all represent the optimal way to run the line.
Quick fixes fall short
Many cost-down programme fail before they begin, not from poor execution, but because they ask the wrong questions.
Too often companies look for options to switch to cheaper suppliers, to cut their energy bills or to reduce the labour content in their products. But these are narrow, very specific areas that are likely to deliver if anything only marginal gains.
To uncover ways to significantly lower manufacturing costs, it’s necessary to dig deeper by interrogating the system not just the symptoms.
As published in: FMCG CEO magazine (November issue 2025) — Read in full