Technical question ten, Why does the production cost of water cups increase with the smaller production quantity?

Many customers have a subjective understanding that the processing procedures of water cups are the same. The production cost of water cups should be the same regardless of how many water cups are produced in each batch, and the unit price of the product does not change much. This understanding is actually wrong, let's make an analysis.

As we all know, the production of a water cup, especially the production of a stainless steel water cup, needs to go through many processes, including dozens of processes from the drawing of raw materials to the finished product.

Each process must be reserved for adjustment loss during production, and the proportion of loss will vary with the difficulty of the product. But on the same cup shape, regardless of the size of the order, the loss of the adjustment machine is basically the same.

If the same amount of loss and loss costs are evenly amortized on the order, the unit price cost of the product will be higher. The smaller the number of orders, the higher the single cost. Conversely, the larger the number of orders, the smaller the loss cost evenly spread on the product. The individual cost will be reduced.

In addition to the loss cost that needs to be shared during production, labor costs are also a block. When producing stainless steel water cups or other products, a lot of labor costs are often incurred in the early adjustment and debugging. On the contrary, after the production and debugging are stabilized, the labor costs will be reduced. This is mainly due to the increase in production efficiency.

Regardless of the number of orders, the time for adjusting the machine in the early stage is similar, so the smaller the order, the greater the labor cost in the early stage will be spread on the product.

In addition to the above two reasons, there are equipment loss costs, material preparation waste costs, and so on. The smaller the order, the less automation can be used in production. In this way, the yield rate of a special process will be significantly different.

For example, when the number of spraying is large, the automatic process will be adopted, but when the number is low, considering the cost of adjustment, manual spraying is often used. At this time, the effect of product spraying cannot be guaranteed, and the defective product rate will also be greatly increased. So whether it is for factory or customer procurement, the more the order quantity, the lower the cost of procurement or production. The opposite is true if the number is small.

Dongguan Zhanyi Commodity Technology Co., Ltd. mainly produces various types of drinking utensils such as stainless steel water cups, plastic water cups and kettles. Our company has a complete automatic paint spraying and powder coating production line, which can be processed in customized colors according to customer requirements. As of December 2020, we have provided product innovation services to more than 200 customers around the world. Global buyers are welcome to visit our official website, and we will have professional customer service staff online to provide you with services.