Rising labor costs, tight margins, and unpredictable supply chains are putting pressure on operations leaders. For mid-sized manufacturers in Minnesota and Wisconsin, trimming overhead without sacrificing quality has become a business imperative. The good news? Proven strategies exist that cut costs while keeping your floor running smoothly.

MDI works with operations executives every day to reduce overhead through smarter outsourcing, tighter processes, and scalable solutions. Here are three ways you can do the same in 2025.

1. Outsource Non-Core, Labor-Heavy Tasks

Instead of stretching your in-house team thin, more manufacturers are outsourcing packaging, kitting, and labeling. These non-core but essential tasks often drain resources and distract from core production goals.

How it works:

  • Shift repetitive, labor-intensive work (like hand assembly or rework) to an ISO-certified partner

  • Consolidate multiple vendors under one roof to cut administrative costs

  • Free your team to focus on production, automation, and value-added tasks

Proof Point: One Midwest manufacturer reduced overtime costs by 18% and improved on-time delivery after outsourcing kitting and assembly to MDI.

Reduce Expenses. Increase Efficiency. Protect Margins.

2. Consolidate Vendors to Simplify Supply Chains

Managing multiple suppliers means more contracts, invoices, and coordination headaches. Vendor consolidation eliminates that complexity and cuts hidden costs.

Benefits include:

  • Lower freight and warehousing costs through bundled services

  • Streamlined communication that reduces delays and errors

  • Better data visibility across packaging, labeling, and fulfillment

Example: By consolidating vendors, one MDI client cut supply chain costs by 15% while improving delivery reliability.

3. Leverage Technology and Process Efficiency

You do not always need more people. What you need are smarter systems. Lean principles, preventive maintenance, and tech-enabled workflows help you run more with less.

Where to start:

  • Use statistical process control (SPC) to detect issues before they trigger costly rework

  • Implement just-in-time (JIT) warehousing to reduce storage costs and keep production flexible

  • Invest in automation for repetitive tasks, from barcode scanning to sealing, while retraining staff to oversee new systems

Result: Operations leaders who combine outsourcing with lean practices typically see margin improvements of 10 percent or more.

Why It Matters

Reducing overhead is not just about trimming costs. It is about resilience. With labor shortages expected to persist for the next decade, manufacturers who adapt now will protect profitability and stay competitive.

Partnering with a trusted, ISO-certified provider like MDI means you do not sacrifice quality for savings. You gain scalable support designed to flex with your business needs.

FAQs

What is the fastest way to reduce manufacturing overhead?
Outsourcing non-core tasks such as kitting, packaging, and labeling provides immediate relief. It shifts repetitive work off your team’s plate while lowering overtime costs. Learn if MDI is the right solution for you. 

Can outsourcing kitting really save labor costs?
Outsourcing reduces the need for temporary staff or overtime while keeping production schedules on track. Partners like MDI also bring ISO-certified processes that improve quality and minimize rework.

How does vendor consolidation cut supply chain costs?
Every supplier adds administrative time and cost. By consolidating services under one partner, you reduce shipping expenses, simplify invoicing, and improve communication.

What role does technology play in lowering overhead?
Lean processes, SPC tools, and automation improve efficiency and reduce costly rework. Many manufacturers see double-digit margin improvements when combining these tools with outsourcing.

Why should I consider MDI as a partner?
MDI offers scalable, ISO-certified kitting and assembly services with proven cost savings. Beyond efficiency, every project supports our mission of creating jobs for people with disabilities. This helps you achieve both business and social impact.