The Personal MBA

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What Is 'Slack'? (Systems)

Slack is the amount of resources present in a Stock.

For a system to operate efficiently, the Slack should be just right: not too big, not too small.

Slack is tricky: too much and you're wasting money, too little and you face the risk of running out of Stock.

Josh Kaufman Explains 'Slack'

Since Stocks are pools of resources, it pays to understand how many resources you have to work with.

Slack is the amount of resources present in a Stock. The more resources you have in a stock, the more Slack you have.

For a system to operate efficiently, Stocks should be just the right size-not too big, and not too small.

Think of our hypothetical automotive manufacturing system: it's a combination of many smaller systems, each of which is designed to create a stock of parts.

If there's no Stock of engines waiting to be installed when a car reaches that part of the assembly line, that's an issue-the car will have to wait until an engine is ready, which holds up everything in line behind it.

To avoid this issue, it's best to ensure the Stock is big enough to handle the level of outflows that are required to keep the system running.

Inflows replenish the stock as it's depleted.

Large stocks have the most Slack, but that flexibility comes at a cost. If you have 500 engines waiting around to be installed, you'll have a lot of funds tied up in inventory, which reduces your cash flow. You'll also have to pay for space to store the engines so they aren't lost or damaged, which increases your costs and decreases your profit margin.

Small Stock are more efficient, but have less Slack.

If you only have a Stock of 2-3 engines, you won't have a huge amount of resources tied up in inventory, but the probability of running out of engines is much higher if the assembly line speeds up or there's a problem with the engine manufacturing system.

Slack is tricky to manage: too much, and you're wasting time and money. Too little, and your system faces the risk of running out of the resources necessary to continue operating.

Questions About 'Slack'


"A man with a surplus can control circumstances, but a man without a surplus is controlled by them, and often has no opportunity to exercise judgment."

Harvey S. Firestone, founder of the Firestone Tire and Rubber Company


From Chapter 9:

Understanding Systems


https://personalmba.com/slack/



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The Personal MBA

Master the Art of Business

A world-class business education in a single volume. Learn the universal principles behind every successful business, then use these ideas to make more money, get more done, and have more fun in your life and work.

Buy the book:


About Josh Kaufman

Josh Kaufman is an acclaimed business, learning, and skill acquisition expert. He is the author of two international bestsellers: The Personal MBA and The First 20 Hours. Josh's research and writing have helped millions of people worldwide learn the fundamentals of modern business.

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