More margin from the plants you have.
Input prices can change by the day, while most production plans change by the week. Vadar Alpha helps you decide what to make, with which inputs and on which line, checked against today's input prices.
Many production plans use a standard cost set at budget time. When input prices move, the real cost drifts away from that standard, and some orders ship at little real margin. The cheapest way to make a product may have changed too.
A cost set at budget time can hide what a unit costs to make this week.
An hour on your busiest line is worth more than an hour anywhere else. Plans rarely show how much more, so low margin products can fill it.
Product shipped well above spec uses input and margin that the customer is not paying for.
Each week, Vadar Alpha checks input prices against your recipes and plant limits. When a cheaper input, another line or a different mix makes the same product for less, your team gets an instruction: the saving in dollars, and the price at which it stops paying.
| Plan | Without | With Vadar Alpha | Tolerance (low) | Tolerance (high) | |
|---|---|---|---|---|---|
| Jan | 100 | 100 | 100 | 98 | 102 |
| Feb | 100 | 102 | 101 | 98 | 102 |
| Mar | 100 | 105 | 101 | 98 | 102 |
| Apr | 100 | 108 | 102 | 98 | 102 |
| May | 100 | 106 | 101 | 98 | 102 |
| Jun | 100 | 103 | 100 | 98 | 102 |
| Jul | 100 | 99 | 98 | 98 | 102 |
| Aug | 100 | 101 | 99 | 98 | 102 |
| Sep | 100 | 106 | 101 | 98 | 102 |
| Oct | 100 | 110 | 102 | 98 | 102 |
| Nov | 100 | 108 | 101 | 98 | 102 |
| Dec | 100 | 104 | 100 | 98 | 102 |
We read your recipes, plant capacity and input contracts from the systems you already use.
Each input gets today's price. Each run gets a target cost and a range it should stay within.
Your team gets each instruction. We track the result and score it against a baseline your finance team agrees on.
| Step | Plant margin, $M per year |
|---|---|
| Budget margin | $4.00M |
| Input switches | +$0.62M |
| Plant and line | +$0.28M |
| Yield recovery | +$0.24M |
| Input prices | −$0.48M |
| Year end margin | $4.66M |
Each gain is tied to the instruction that produced it and measured against a baseline your finance team agrees on. When input prices take margin away, you see that too, in the same view.
Good production decisions make each product at the lowest real cost the market allows this week, not the cost assumed at budget time. It starts with an honest cost per unit.
Cost per unit is the total cost of a production run divided by the number of units it makes. Total cost includes raw materials, labor and overhead. If a run costs $52,000 and makes 40,000 units, the cost per unit is $1.30. Vadar Alpha recalculates it with today's input prices, so the number reflects what a unit costs this week.
Standard costs make planning and comparison easy, which is why most manufacturers use them. The catch is timing. A standard set at budget time assumes input prices hold still for a year. When a key raw material moves 10%, every unit made at standard is costed wrong, and orders quoted on that cost can ship at little or no real margin. Vadar Alpha keeps the standard for control and adds a live actual cost for every run, so planners see both numbers side by side.
Many products can be made from more than one approved input. Recipe and formulation tools record the alternatives, but the switch is usually made by habit, not by price. Vadar Alpha prices each approved alternative against the live market every week, allows for yield and plant limits, and recommends a switch only when it clears the cost of changing over. Each recommendation comes with the price at which it stops paying.
When a product can run on more than one line or plant, the cheapest place to make it changes as energy, labor and input prices move. Vadar Alpha compares the full cost to make and deliver from each option, so the weekly plan puts each run where it earns the most.
Small yield losses rarely show up as a line on the P&L, but across thousands of runs they add up. Vadar Alpha values yield and recovery at today's input prices, so a one point loss shows up in dollars, not just in percentages.
Every decision arrives as a plain instruction, with the dollars at stake, the reason, and the point at which it stops paying.
Measured asStandard cost is the planned cost per unit, set at budget time. Actual cost is what the unit really cost, at today's input prices. When input prices move, the gap between them grows. Vadar Alpha costs each run at today's prices, so the plan shows what a unit costs this week.
Divide the total cost of a production run by the number of units it makes. Total cost includes materials, labor and overhead. A run that costs $52,000 and makes 40,000 units costs $1.30 a unit. Vadar Alpha recalculates this with today's input prices.
When an approved input does the same job for less, switching to it lowers cost per unit without changing the product. Vadar Alpha checks each switch against your recipes and plant limits, and shows the saving in dollars and the price at which it stops paying.
No. Vadar Alpha reads from the systems you already use, such as your ERP, plant systems and contract files, and sends instructions to the people who run the plan.
A 30 minute conversation to see where your margin leaks and whether we can help.
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