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How do you manage/value your manufacturing supplies inventory?
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Shiloh Templeton
Cheyenne HET Co
#1 - 2014-09-05 14:25:21 UTC
Do you purchase your supplies as you need them for JIT manufacturing, or do maintain a stockpile that you draw against as you manufacture?

If you maintain a stockpile, how do you value the inventory when determining whether an item is profitable?

For example a great number of T2 modules are selling for a lower price than 2 months ago, but they are still profitable because the component prices are also lower -- unless your inventory of supplies were purchased when the prices were higher.

Charlie Nonoke
Blue Republic
RvB - BLUE Republic
#2 - 2014-09-05 15:27:28 UTC  |  Edited by: Charlie Nonoke
I personally use JIT.

It might be more troublesome hauling your goods, but as prices fluctuate all the time, having a stockpile of materials can be a curse, rather than a blessing.

Not to mention, I value my ISK "working" hard, and that means putting it to other uses rather than having it sit there in the assembly array gathering dust.

Another point worth noting is that your product which is worth producing today, might not be worth producing tomorrow, or next week.
That's materials "wasted" by sitting there doing nothing.
Kenneth Feld
Habitual Euthanasia
Pandemic Legion
#3 - 2014-09-05 15:34:08 UTC
High sec, I use JIT, hauling mins is easy to do and that way my prices reflect current conditions and determining profit is easier

nullsec, I stockpile, with the changes to compression, I try and keep 100-150 bil in minerals around in case something happens
Vartan Sarkisian
Tannhauser C-Beam
Lux Collective
#4 - 2014-09-05 15:35:11 UTC  |  Edited by: Vartan Sarkisian
I have started having a small stockpile because I am currently going through the mishmash of T2 BPC that I have and was getting fed up of running to a trade hub with every job.

Once all these BPCs are done though and I concentrate on a couple of items ill probably buy as I need.

Ive not heard the term JIT before, what does it mean?
Tinu Moorhsum
Random Events
#5 - 2014-09-05 16:07:37 UTC
Shiloh Templeton wrote:
Do you purchase your supplies as you need them for JIT manufacturing, or do maintain a stockpile that you draw against as you manufacture?

If you maintain a stockpile, how do you value the inventory when determining whether an item is profitable?

For example a great number of T2 modules are selling for a lower price than 2 months ago, but they are still profitable because the component prices are also lower -- unless your inventory of supplies were purchased when the prices were higher.




There are two questions here.

1) how do you deal with the production side logistics?
and
2) how to deal with variations in selling price?

You really need to see these as separate issues, and you can because (a) draw-pull inflation in EVE is limited but also draw-push deflation is likewise limited.

what serious manufacturers do is this

1) make siht. a LOT of it. In my case, a "run" of a T2 module is not a week or a month. I run 4-5 months of something at one time. I can do this because I know that inflation and deflation balance out. I may need to wait until after the summer vacation to sell it, but it will sell. In 10 years of playing EVE I've *literally* never made a T2 module that I couldn't sell for a profit.

1b) when i make a "run" of something, I buy all the input materials I need for 4-5 months. I don't do *anything* on the scale of a week or a month. You need to see the market in terms of seasons. I only chose 4 months because it's ... well... 4 months. In my day job we plan in blocks of 4 months and it just made sense. Planning this far ahead also means that your isk per hour of REAL LIFE effort goes WAY down. I mentioned in another thread today that I can reach productivity levels on the order of 400mil isk per hour with manufacturing. This is possible, but ONLY if you're well organized.

So that's the thing about logistics. A friend of mine takes it to another level. My horizon is 4-5 months. His is 2-3 years. In general terms he's been right. For him, buying a titan was "chump change". For me, buying a titan is a major expense. On the other hand, he was stuck holding a galactic fucton of ferrogel when the mechanic changed. I was not......

Point being that within the context of one patch/release, you can manufacture your brains out. If a patch changes teh mechanic then you need to wake up and think.

T-
Ranamar
Nobody in Local
Of Sound Mind
#6 - 2014-09-05 20:39:50 UTC
Vartan Sarkisian wrote:
Ive not heard the term JIT before, what does it mean?


Just In Time [manufacturing]
Essentially, you acquire the materials as you need them to feed into your factories.

When I did hisec rig manufacturing, I did something sort of halfway in between: I set stockpile targets which were generally around two days' buffer, and I ran nightly builds. After I put a set of BPOs into the oven, I would put up buy orders to top off the stacks I had used. So, effectively, it was JIT: the stockpiles were a sunk startup cost, as they tended to stay approximately even, and I calculated production costs off of how much it would cost to replenish the stocks.
JAF Anders
Adenosine Inhibition
#7 - 2014-09-05 20:41:08 UTC
Vartan Sarkisian wrote:

Ive not heard the term JIT before, what does it mean?


I believe they're referring to "just in time"

The pursuit of excellence and stabbed plexing alts.
Gilbaron
The Scope
Gallente Federation
#8 - 2014-09-06 03:38:56 UTC
I can easily make 10 percent per week from manufacturing.

10 percent from speculation is highly unlikely (exception: patches)

Therefore I hardly ever stockpile anything
SJ Astralana
Syncore
#9 - 2014-09-06 04:55:00 UTC
With apologies to Jeff Foxworthy.

If you log in and you can't fill all of your factory slots with materials on hand,
You just may be doing it wrong.

If you have never sold a full day's production of an item while sleeping,
You just may be doing it wrong.

If you undock,
You just may be doing it wrong.

If you think your time is free,
You just may be doing it wrong.


Hyperdrive your production business: Eve Production Manager

Vartan Sarkisian
Tannhauser C-Beam
Lux Collective
#10 - 2014-09-06 07:13:24 UTC
Tinu Moorhsum wrote:
There are two questions here.

1) how do you deal with the production side logistics?
and
2) how to deal with variations in selling price?

You really need to see these as separate issues, and you can because (a) draw-pull inflation in EVE is limited but also draw-push deflation is likewise limited.

what serious manufacturers do is this

1) make siht. a LOT of it. In my case, a "run" of a T2 module is not a week or a month. I run 4-5 months of something at one time. I can do this because I know that inflation and deflation balance out. I may need to wait until after the summer vacation to sell it, but it will sell. In 10 years of playing EVE I've *literally* never made a T2 module that I couldn't sell for a profit.

1b) when i make a "run" of something, I buy all the input materials I need for 4-5 months. I don't do *anything* on the scale of a week or a month. You need to see the market in terms of seasons. I only chose 4 months because it's ... well... 4 months. In my day job we plan in blocks of 4 months and it just made sense. Planning this far ahead also means that your isk per hour of REAL LIFE effort goes WAY down. I mentioned in another thread today that I can reach productivity levels on the order of 400mil isk per hour with manufacturing. This is possible, but ONLY if you're well organized.

So that's the thing about logistics. A friend of mine takes it to another level. My horizon is 4-5 months. His is 2-3 years. In general terms he's been right. For him, buying a titan was "chump change". For me, buying a titan is a major expense. On the other hand, he was stuck holding a galactic fucton of ferrogel when the mechanic changed. I was not......

Point being that within the context of one patch/release, you can manufacture your brains out. If a patch changes teh mechanic then you need to wake up and think.

T-



This must involve a hell of a lot of ISK and/or a hell of a lot of accounts/toons.

Even with the realtively small number of BPCs that I am working from at the moment, the materials to build the components etc was about 1.2b, which for a major industrialist may be chicken feed but for me is a decent % chunk of my disposible ISK.
Tinu Moorhsum
Random Events
#11 - 2014-09-06 09:53:36 UTC
Vartan Sarkisian wrote:



This must involve a hell of a lot of ISK and/or a hell of a lot of accounts/toons.

Even with the realtively small number of BPCs that I am working from at the moment, the materials to build the components etc was about 1.2b, which for a major industrialist may be chicken feed but for me is a decent % chunk of my disposible ISK.


I think the question of how much isk it costs is relative. The idea I'm trying to get across here is to think as far ahead as you can.

So yeah, it's possible that I'll have 10 or 20 billion isk worth of input materials in a hangar. If you can't work on that scale, then use the same thinking and scale it down to whatever you can manage. The main idea being to save RL time by not having to move stuff around very often.

As for toons. I have 5 toons that I use for manufacturing. This is the only real way to scale up in manufacturing. It's not like ratting where you can just put in more time if you want to have more isk. You need to duplicate.

T-
SJ Astralana
Syncore
#12 - 2014-09-06 10:09:16 UTC
Tinu Moorhsum wrote:

As for toons. I have 5 toons that I use for manufacturing. This is the only real way to scale up in manufacturing. It's not like ratting where you can just put in more time if you want to have more isk. You need to duplicate.


I've only ever had this toon, 11 factory slots. It is so trivial to profit 20% of available capital per month as a starter and just scale. I won't pretend I turn over 20% anymore as it's closer to 11% these days, as I just can't be bothered to log into a 2nd toon to fire up more slots.

Hyperdrive your production business: Eve Production Manager

Tinu Moorhsum
Random Events
#13 - 2014-09-06 10:25:23 UTC
SJ Astralana wrote:
Tinu Moorhsum wrote:

As for toons. I have 5 toons that I use for manufacturing. This is the only real way to scale up in manufacturing. It's not like ratting where you can just put in more time if you want to have more isk. You need to duplicate.


I've only ever had this toon, 11 factory slots. It is so trivial to profit 20% of available capital per month as a starter and just scale. I won't pretend I turn over 20% anymore as it's closer to 11% these days, as I just can't be bothered to log into a 2nd toon to fire up more slots.


I understand. In my case it's the way I make about 99% of my isk in EVE. Mission running, ratting, plexing, etc is offensively boring to me. I've tried it before but it starts feeling like a horrible grind after about an hour. Even when I lived in a wormhole I think in 2 years I went ratting in there about 1/2 dozen times.

To each his/her own, I guess but I manage to make a decent income like this and I really like the fact that it costs relatively little time as compared to other EVE occupations.

T-