Manufacturing Surplus: A Beginners Guide
Manufacturing surplus is one of the most exciting aspects of manufacturing. It refers to the amount a manufacturing company can produce above and beyond what they need to complete their manufacturing process. For example, if you have a manufacturing plant that produces ten widgets every day but only needs 8 to meet demand, your manufacturing surplus would be two widgets per day.
This might seem like a minor detail at first glance – after all, it’s just two extra pieces of factory equipment or raw materials each day – but when you take into account how much these things cost (and how long it takes for them to get used up) than manufacturing surpluses become a precious commodity!
When we think of manufacturing surplus, the first thing that comes to mind is manufacturing equipment. For example, suppose your manufacturing company makes car parts and has a manufacturing excess of $50 thousand per month in production machinery. In that case, you could spend this money on something else – like marketing or product development.
Manufacturing surpluses are not limited to physical assets, however. Manufacturing surpluses are also made up of manufacturing deficiencies or the manufacturing work that is not needed for a particular production period.
Manufacturing surpluses can be a valuable commodity, and manufacturing companies should consider spending this surplus money.