How to Improve Production Efficiency: The James Moore Guide

If you run a $25 million manufacturing business, a 1% gain in production efficiency could mean an extra $250,000 in net revenue — without a single new customer. That’s the kind of impact we’re talking about.

In our work with mid-size manufacturers, we’ve seen firsthand how the right changes at the right time can tighten operations, reduce rework and sharpen your competitive edge. Improving production efficiency isn’t just about new equipment or flashy tech. It’s about refining the way your manufacturing operation works day in and day out.

Let’s talk about what real efficiency looks like, where manufacturers are losing money, and how to shift the focus from short-term fixes to long-term value creation.

Understanding the Cost of Inefficiency in Production

Every minute of downtime and every unit of scrap product eats into your margins. Yet these losses often go unnoticed until they show up as profit shortfalls. In our work with manufacturing clients, we’ve identified some common culprits:

• Excess inventory buildup due to inaccurate demand forecasting
• Unplanned equipment downtime from skipped preventive maintenance
• Workflows that rely too heavily on key personnel (i.e., “tribal knowledge” bottlenecks)

These operational leaks may seem minor on their own. But compounded across departments, they drag down throughput and delay growth opportunities. Manufacturers also often miss strategic gains, like quicker time to market or the ability to take on additional contracts, because they’re stuck reacting instead of improving.

Lean Principles: Simple Fixes That Drive Results

Lean thinking is a mind shift that applies to billion-dollar plants and growing manufacturers with regional operations. At its core, lean production is about eliminating waste in all forms: motion, material, time and process.

We’ve seen manufacturers save hundreds of labor hours by implementing the 5S methodology at their workstations. Others cut changeover time in half with low-cost tweaks to tooling and part sequencing. These changes work because they’re driven by structure: clear processes, consistent feedback and accountability.

For example, imagine you’re running five different versions of the same job, with variations tied to different shifts and operators. While each version may work in isolation, inconsistencies can creep in, and the lack of a unified process leads to siloed knowledge. This can create serious downstream issues: rework, quality defects, communication breakdowns and unnecessary downtime.

A manufacturing CPA well versed in process improvement can analyze the workflow across all shifts, identify the points of variation and lead a structured standardization effort. Actions they can take include:

• Designing a consistent, optimized process flow
• Documenting it clearly and accessibly
• Training all teams to follow the same procedure regardless of shift

If your team is constantly asking repeat questions like “Where’s that form?” or “What’s the setup for this part?” or “Who handled it last?”, you’re likely facing hidden inefficiencies that cost both time and money every day. These friction points often go unnoticed because they’ve become normalized. But solving them can unlock measurable performance gains.

At James Moore, we often recommend a business process improvement review to help manufacturing companies identify where their systems are breaking down and how to fix them with minimal disruption.

Investing in Smart Tech Moves, Not Flashy Fads

Technology can absolutely help you improve production efficiency, but not every digital tool is worth the cost. The best results come from aligning the solution with the problem, not chasing the latest trend.

Enterprise resource planning (ERP) systems, for example, can improve visibility across purchasing, inventory and scheduling. But for some manufacturing teams still using spreadsheets and handwritten logs, even modest steps like basic workflow automation can lead to major productivity gains.

We’ve also seen tech investments become strategic enablers. If your data is siloed or inaccurate, your team may lack confidence in production metrics, leading to delays in decision-making, misaligned planning and missed opportunities.

Before upgrading, ask yourself:

• Are we missing data needed for accurate scheduling or maintenance?
• Are tribal processes preventing consistent system use?
• Are reporting delays hiding deeper issues in performance?

You don’t need the newest system on the market. You need one that fits your manufacturing workflow and helps your people work better.

Tax Strategy: A Tool for Production Efficiency Gains

Production efficiency improvements aren’t limited to your plant floor. They also live in your tax strategy.

Tax incentives can fund the equipment and process changes that make your facility more efficient. For example, the Section 179 deduction allows you to write off up to $1.22 million in equipment purchases in 2024, as long as the assets are placed in service by year-end. That’s real support for investments that improve throughput.

Another often-overlooked opportunity is the R&D tax credit, a benefit many manufacturers mistakenly believe doesn’t apply to them. In reality, if you’re experimenting with new materials, enhancing automation or improving production processes, you may be eligible.

Let’s say you redesign a key product line to reduce cycle time by 18%. The initiative involved iterative testing, documentation and process refinement. These are all qualifying activities under the R&D credit guidelines, which means you could claim valuable tax credits that significantly offset the cost of your improvements.

At James Moore, our Manufacturing Services team looks for opportunities like these in every engagement. From cost segregation and energy-efficiency deductions to credits for workforce development, we help our clients use the tax code to support smarter production operations. We also have CPAs specializing in R&D tax credits to help  you leverage that strategy.

The tax code is full of tools designed to help businesses grow efficiently. But unless you know where to look, they often go unused. And in manufacturing, that’s a missed opportunity you can’t afford.

Empowering Your People to Drive Process Improvements

If your systems and workflows are the structure of your business, your people are the power source. That’s why sustainable improvements in manufacturing efficiency always involve the workforce.

Too often, changes are dictated by leadership without input from those doing the work. This lack of frontline engagement can lead to poor buy-in, stalled implementation, and missed opportunities for practical improvement.

Structured team programs give your staff ownership over improvement initiatives. For example, weekly “waste walks” — 20-minute reviews of different production areas to identify inefficiencies — provide opportunities for quick, consistent observations. These enable employee-driven changes that can generate significant savings.

Tying quarterly incentives to both quality and throughput metrics also encourages accountability across teams. This leads to better production numbers and improved cross-department collaboration.

At James Moore, we believe that process improvement should reflect the values of empowered individuals and fostering support and camaraderie. You can’t automate passion or standardize creativity. But when your people are trained, trusted and included in the conversation, you’ll unlock gains that no software can deliver on its own.

Improve Production Efficiency With Confidence

Improving production efficiency is one of the most powerful steps a manufacturing business can take. Whether you’re tightening up workflows, eliminating downtime, modernizing reporting or accessing overlooked tax benefits, each change compounds to build a stronger, more responsive operation.

At James Moore, our business advisory professionals partner with manufacturers to uncover these opportunities and help implement them with confidence and clarity. From process reviews to tax planning, we’re here to support your long-term success.

Contact a James Moore professional to talk through what’s working, what’s holding you back and where we can help you improve.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.