When a manufacturer produces a run of custom products it is common for the number of units you receive to be higher or lower than you ordered by 5% to 10% depending on the product. This difference in the number of units is called overs and unders.
When you place an order for custom products, your production run is scheduled for a dedicated time slot on the factory's manufacturing equipment. This time slot includes the time necessary for setup which uses extra material for testing purposes. Most custom manufacturing requires tooling such as printing plates and cutting dies that need to be installed, tested and adjusted.
During the setup process for a production run, the supplier will carefully watch the production line, pulling rejects, and pausing production to dial in the equipment so that it performs best for your project. The setup phase is pivotal for a successful production run.
There are two reasons that you may receive fewer units than you ordered. The first is if the setup phase uses more material than expected and the supplier runs out of that material. The second is if the setup requires more time than anticipated, and the supplier needs to cut your production run short.
Note: Unders happe rarely, but if you need to hit a minimum quantity, you may want to order up to 10% more to account for unders.
To account for rejects in setup, a supplier will buy more material than is required for your exact order quantity. When time allows, the supplier will use all of the material they've allotted for your project. That means, if there are only a few rejects in setup, you will receive a higher quantity than what you ordered and end up with overs.
Note: You will receive an invoice to cover overs after they've been delivered. This makes it easier to compensate for any defective units that may need to be subtracted from your invoice.
