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Slack / Variable Quantities in Production
Slack / Variable Quantities in Production
Spiridoula Karkani avatar
Written by Spiridoula Karkani
Updated over a week ago

Slack is a feature that enables the consideration of wastage or deviations in quantity allocation during production. It is particularly useful when dealing with materials or finished goods stocked in bulk quantities instead of individual items.

In production, Slack refers to the allowance for variations or deviations in the consumption of raw materials or the yield of finished goods. It accounts for the fact that production work may not always be accurate, leading to differences in the quantities used or produced rather than rigidly adhering to fixed quantities. Basically, it acknowledges and accommodates the inherent variability in production processes.

Applying Slack in Raw Materials Quantities

Using slack in raw materials quantities can result in above or below-expected consumption levels. With this feature of Megaventory, users can define their own percentage to allocate additional quantities of raw materials to production orders, and the materials' stock is adjusted accordingly to account for the wastage. Similarly, users have the flexibility to allocate a reduced quantity of material that is consumed before they can receive one unit of the finished good, with the deviation from the Bill of Materials (BoM) table as indicated

Above Expected Quantities:

Applying slack above the expected consumption level allows for the use of more raw material in a given production run than typically utilized. For example, below 0.05 kgs more than the expected 1 kg are to be consumed.

Below Expected Quantities:

On the other hand, slack below the expected consumption level provides companies with the flexibility to use less quantity if this proves to be adequate while in the process of the production run. In the example above, less than the expected quantity is allocated (1.9 vs 2) - but still within the 10% or 0.2 ml (ie in the 1.8 to 2.2 range).

Note that if the raw material allocated quantity is less than what is allowed by the relevant raw material slack (for example, if the allocated quantity was 1.7 in the above image ie outside the allowed range), then the finished good quantity that can be received in the following step would be limited.

Applying Slack in Finished Goods Quantities

When expecting slack (ie a varying yield) in finished goods quantities, companies typically need to enter the actual finished good quantity that resulted from the production run. If more finished good quantity is actually produced compared to the default BoM, then this can be recorded. Conversely, if a smaller finished good quantity is produced, that stock level can also be entered deviating from the default BoM.

Above Expected Quantities:

When expecting higher production yields than originally planned, companies can record the actual quantity of finished goods produced, which surpasses the default BoM. This approach reflects a more efficient production process and may result in cost savings.

Below Expected Quantities:

Conversely, if the production yield falls below the default BoM, companies can record the actual quantity of finished goods produced, reflecting the lower-than-expected output.

Close Production Order

When closing the production run and no further changes to the quantities are expected, the user is prompted regarding the quantity within the slack range.

This allows for the option of any deviating raw material quantity to be returned (ie be made available for future consumption) or to be considered as consumed.

Impact on Finished Good Cost

Applying slack in raw material and finished goods quantities can also have an impact on the cost of finished goods. If a larger-than-expected quantity of finished goods is produced, then the cost per unit will decrease compared to the default BoM. Conversely, if a smaller quantity of finished goods is produced, the cost per unit will increase compared to the default BoM.

Of course, variability can be introduced in raw materials and finished goods in a single production run. The adjustments above apply simultaneously at the relevant step (when consuming raw materials or creating finished goods).

Note: This feature is more relevant for non-discrete production, ie bulk materials, rather than itemized production like clothing items.

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