Cost Continues to Increase Door and Window Enterprises Should Be Thrifty

- Apr 02, 2019-

The common problems faced by domestic door and window enterprises are one low and one high, i.e. low production efficiency, low plate utilization rate and machining efficiency, high error rate at the same time, devouring seemingly high gross profit.  With the intensification of market competition, how to improve the production efficiency of factories has become one of the most urgent problems that door and window enterprises hope to solve.

The amount of enterprise costs continues to rise.

In a labor-intensive industry such as the door and window industry, cost accounts for a large part of production. Cost reduction is equivalent to profit for a long time. With the rise of wages and the price of raw materials, the development of the door and window industry needs to pay more attention to cost control than in the past. Only by starting from the root and focusing on strategy can door and window enterprises attract the bitter battle of cost.

 The "quantity" of costs continues to rise, but the "quality" effect of costs has not diminished at all.  Cost is still the main line of operation and the leading role of marketing. To maintain competitive advantage, it is still necessary to continue to reduce costs, which will increase efficiency.  The leading role in market competition is price, the driving force behind it is cost, and the important connection is profit.  Prices based on costs still have absolutely fatal effects in market competition.  Doors and Windows enterprises need to spare no effort to do their homework to reduce costs, whether they are transforming and upgrading on the basis of innovation-driven, or adapting to the new normal and creating an upgraded version, and must be in the sunshine of positive energy.  For example, ways to reduce costs include innovation, application of new materials, improvement of production efficiency and improvement of product quality.

The cost advantage of the door and window industry in China once made it the "world's first" honor, but it also left many wounds and old scores.  The game of cost is how to effectively reduce the rising cost, maintain the corresponding profit level and strong profitability, and ensure the sustainable development of the enterprise.

 Doors and Windows Enterprises Focus on Strategic Cost Control

 Facing the new normal, door and window enterprises urgently need to transform and upgrade their cost advantages.  Low cost, which was once the main advantage of Chinese manufacturing, should evolve into an engine advantage created by China.  Counting the causes of low cost in door and window industry, one is the non-standard employment, the other is the non-compliance in operation.  In addition, labor costs have increased due to the shortage of labor due to the gradual loss of labor dividends.  Price adjustments in other areas have triggered a continuous "price boom" in the entire industrial chain.

Cost reduction is a job that door and window enterprises need to stick to for a long time. It is not only the demand of competition, the demand of sustainable development of enterprises, but also the demand of innovation drive and the demand of adapting to the new normal.  For example, improving production efficiency is not only a requirement for transformation and upgrading of door and window enterprises, but also an effective measure to reduce costs.  Improving the quality level is an obvious method to reduce costs and increase efficiency.  The hardware guarantee for cost reduction is to innovate technologies and techniques to realize product reduction and thinning, to comprehensively reduce cost through innovative technologies, to improve equipment level, and to promote mechanization, automation and intelligence.  Promoting energy conservation and emission reduction, circular economy, cleaner production and comprehensive utilization, and improving energy utilization efficiency;  Innovating management to improve management ability and level, managing benefits and refusing waste are actually to reduce costs.  One of the ways to increase benefits is to reduce the cost of production and operation in order to do a good job in the "cost reduction and efficiency improvement" article, and the innovation and rationalization proposal activities involving all employees are one of the important contents, i.e. watermelon and sesame.

The change of cost advantage is also an important turning point to promote transformation and upgrading.  Especially in export, due to rising costs, the export advantages of the former products are no longer the same as before, and the door and window industry in countries and regions with lower cost advantages is developing rapidly. Upgrading to middle and high grade has become a necessary choice for the domestic door and window industry.  However, the introduction of the domestic environmental protection law has increased the possibility that the illegal cost of environmental protection for enterprises will soar abruptly, which is difficult to measure. It has also forced door and window enterprises to speed up innovation and promote transformation.

The contest of costs is to compete with costs, snatch profits from the "tiger's mouth" of costs, save expenses from wasteful behavior, and expand profits from innovation-driven.  Facing the dilemma of rising costs, Tao Wei enterprises should accumulate positive energy driven by innovation, push forward the initiative of transformation and upgrading, and not give up the pursuit and demanding of reducing costs.  Looking at the international big-name companies and the world's top 500 companies, we all have a special love for cost reduction.

 In short, only by strictly controlling the cost of door and window enterprises, making careful investments and not blindly expanding can more cash flow be created.