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Accounting for Dumped/Lost SMT Parts

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Accounting for Dumped/Lost SMT Parts | 21 November, 2014

Everyone deals with a number of loose SMT parts during production. These usually come from machine attrition (dumped parts), a few parts that are lost during feeder tape changeover, dropped inside the machine, etc. I will categorize them as:

A. Identifiable parts over a certain cost.

B. Non-identifiable parts over a certain cost.

C. Identifiable parts under a certain cost.

D. Non-identifiable parts under a certain cost.

The goal is to maintain accurate inventory counts to eliminate running out prematurely and to avoid unnecessary cost, whether it is raw part cost due to overbuying and/or cost of sorting and hand placement.

How do most companies out there account for these dumped/lost parts (A, B, C and D) and what do you do with them?

Thank you in advance.

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Accounting for Dumped/Lost SMT Parts | 21 November, 2014

99% of the time the effort to try and track, count and update inventory takes more cost in labor than the parts are worth.

We plan 2% scrap rate and move on with life. Simplifying the concept can actually save a lot of money in the long run.

Can be difficult if your company is run by accountants because they often do not understand the costs associated with labor, opportunity for error or not having the parts.

We never count any of our C parts, we only count full reels.

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Accounting for Dumped/Lost SMT Parts | 21 November, 2014

If there are parts "non-identifiable" then you don't know their cost.

Parts under a certain cost you don't worry about.

That leaves only category "A" parts to concern yourself with.

Know your attrition rates especially for parts over a certain cost and continuously try to reduce it.

Implement a reel ID tracking system to continuously update your MRP/ERP system. This way when you have 100,000 components P/N XYZ you actually know what reel ID's they are on (for example you may have 20 reels with 5,000 components each). So every reel that empties completely is deleted from your inventory (and hence 5,000 parts). This in turn updates your inventory level for that P/N and accounts automatically for attrition rates for that reel. A system that keeps track of quantity of components per each unique reel ID is best if you have a lot of reels of the same P/N in play at any given time.

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Accounting for Dumped/Lost SMT Parts | 23 November, 2014


We have clients who developed a similar model and even some of them turn it on for some time. The problem is the high cost of ongoing maintenance. What is true, the system allows to study weak places of pre-production and our customers were able to locate the places you need to improve. Some of the problems were due to the preparation of program placement, or planning work. We have developed our customers various software tools that improved processes. This improvement led to a system, you describe, is irrelevant. But they still use it only for the most critical projects with a very high cost (which is a small percentage of total production).

You can read about our products on the website:

Best Regards, Alexei

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Accounting for Dumped/Lost SMT Parts | 25 November, 2014

We're attempting to seriously address this problem now. For us it is not the cost of the lost components as much as the loss of SMT efficiency holding a job waiting for a $5.00 reel of components and the cost of $20.00 to overnight ship.

Our IT group is developing a system to utilize management data from our P&P machines via network to keep our inventory system up to date. Sounds good but we'll se how it goes.

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Accounting for Dumped/Lost SMT Parts | 25 November, 2014

That is the optimal solution. Most placement equipment have very accurate methods to count the fall off per part/nozzle/feeder.

Tie that together and you would be golden.

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Accounting for Dumped/Lost SMT Parts | 26 November, 2014

Reckon on around 2% of wasted parts for each and every component used, and you won't be too far off.

Decide on a value below which you don't care, and for parts that cost more than that, you need to keep a closer eye on them to see if they are indeed wasted at the 2% rate.

Some employess don't appreciate just how much some components can cost. We have resistors that cost more than some IC's, simply because they are bespoke parts.

Hope that helps...

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