In the realm of production, the concept of slack plays a pivotal role in accommodating wastage or deviations in quantity allocation. Specifically, it proves invaluable when dealing with materials or finished goods stocked in bulk quantities rather than individual items. Slack encompasses the allowance for variations in raw material consumption or finished goods yield during production, acknowledging that perfect accuracy may not always be attainable. Rather than adhering strictly to fixed quantities, slack acknowledges and accommodates the inherent variability within production processes. This article delves into the significance of slack, its benefits, and its practical implications for optimizing production outcomes.
Understanding Slack in Raw Materials Quantities
One aspect of slack involves entering quantities of raw materials above or below the expected quantities defined in the BoM. This flexibility proves beneficial in various scenarios. On one hand, there may be instances where you consume less raw material than expected but still achieve the intended quantity of finished goods. On the other hand, there might be situations where you need to consume more raw materials to reach the desired level of finished goods.
Applying Slack in Finished Goods Quantities
Similarly, when dealing with finished goods quantities, you can enter quantities above or below the BoM’s amounts expected. This capability proves valuable in different scenarios. Sometimes you may receive either more (eg if a baking process happens to be more efficient and more food servings are produced) or less than the expected amount (eg if there is spillage).
Example: In a bakery, slack may be needed to be introduced when it comes to finished goods quantities. For example, despite the recipe dictating 100 loaves of bread are expected to be made, the automated process may occasionally yield 110 loaves due to a more effective yeast batch or more air being included in the resulting loaves. This surplus needs to be accommodated on the fly by applying slack that way preventing inventory discrepancies.
Closing Production Order and Considerations
When closing a production order, it is important to consider the impact of slack on the cost of finished goods. Properly accounting for slack ensures accurate cost calculations and helps maintain financial transparency within the production process.
It is worth noting that the responsibility for defining the percentage limits within the BoM lies with one designated user, typically the administrator. Other users involved in production are then restricted to deviating within those predetermined limits, ensuring control and adherence to defined standards.
Example: In a hardware assembly line, closing a production order may also involve considering slack. If a component’s paint application results in a slightly thicker coat due to variations in the painting process, accounting for this increased quantity helps have a more precise cost calculation. Such a variability of course needs to stay within a certain range – so the administrator needs to set ahead of time what the acceptable slack limits are in the Bill of Materials. That way he can ensure both that the additional paint quantity is accounted for and at the same time that no more than a fixed extra amount has been used up.
Note: This feature is more relevant for non-discrete production, ie bulk materials, rather than itemized production like clothing items.
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In conclusion, this article offers valuable insights into the concept of slack in production, emphasizing its importance in effectively managing bulk quantities of materials and finished goods. It discusses the application of slack in both raw materials and finished goods quantities, underscores the considerations involved in closing production orders, and acknowledges the impact of variability in the production environment.
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Spiridoula Karkani is a Digital Marketer for Megaventory the online inventory management system that can assist medium-sized businesses in coordinating supplies across multiple stores. She is navigating the ever-shifting world of marketing and social media.