Production Cost. Subject ( Business, marketing )

List 5 reasons why reducing the number of parts in a product might reduce production costs. 

By minimizing the number of parts in a product can give huge cost savings especially in cases of large quantities. Also, this kind of approach might result in the better quality of a product. Following are some of the important reasons that show how by reducing the number of parts in a product can reduce the product costs (Devinish, 2008).

1). Less Suppliers:     If the product has less number of parts this means that there will be chances of less suppliers to deliver the parts. In this way the cost can be cut down as one becomes less dependent on others in delivery as well as in communication and documentation processes.

2). Less Inventory Management:     During the production inventory management plays a vital role. It is often observed that if any of the parts for the product is not available and is out of stock then it becomes hard to assemble the product. This also causes obstruct toward the complete production of a product.

3). Less Inspections and Associated Fixtures:   Every part of the product must be properly inspected before it is assembled. Therefore, if there are more parts then this means more work must be done on the quality inspections and thus more expenditure. On the other hand, if there are less parts then less expenditure will be on the inspection and associated fixtures.

4). Simple Production Cost:   There will be less cost on the part itself which means that if there are less parts then less production cost.      

5). Less Labor Cost :    Similarly if there are less parts then the labor cost will also be reduced as fewer parts mean less assembly and which in turn will result in less labor cost.