The efficiency of the production cost

The importance of controlling production costs into the price of the dead that cannot be bargained again.

Employee wage increases, the increase in the cost of electricity, as well as raw material products each year which could not be avoided forcing the industry should do efficiency.

What are the components of the cost of production?

1. Raw material cost (direct material Cost). Is the material directly use in production in order to realize a range of finish products ready to be market?


2. direct labor costs (direct labor cost). Are the costs for the direct labor is place and harness in addressing activities process the finish product directly in activities accompanying. The production of handles all business and production equipment can be realize?


3. Overhead costs of the factory (factory overhead cost). Generally define as the indirect materials, indirect labor and factory costs other. That are not easily define or charge to a job.

Elements of Factory Overhead costs including:

• Material cost helper


• indirect labor costs


• The costs of depreciation and amortization fixed assets


• The cost of repairs and maintenance of the machine


• The cost of electricity and water plant


• Insurance costs the factory


• Miscellaneous Operations

With the increasing cost of production each year while the demand and market competition asking sale price-competitive, then it is of course the company should improve cost efficiency by implementing a program of Kaizen & TPM.

On one side of the life of the production depends on the reliability of the machine. If the machine is often broken, then it will not yield the maximum for that importance of TPM program.

To improve employee morale in improvisation, then program Kaizen is extremely helpful to invite employees have the mindset & it to resolve any of the problems facing the works respectively.

So with TPM

On one side of the life of the production depends on the reliability of the machine. If the machine is often broken, then it will not yield the maximum for that importance of TPM program.

To improve employee morale in improvisation, then program Kaizen is extremely helpful to invite employees have the mindset & it to resolve any of the problems facing the works respectively.

So with TPM & Kaizen is the company would be able to suppress the production costs and boost corporate profits.