Managing Component Scrappage Rates in Customer Supplied Assembly Kits
Provide clear overage buffers and factory reels to prevent line starvation, setup material waste, and downtime charges during surface-mount assembly.
Assembly Line Downtime Charges
Financial Penalty
Contractual penalties apply when a production stop occurs due to supplier-related issues such as defective boards or late deliveries. These assembly line downtime charges represent the recovered cost of idle labor and lost capacity during a manufacturing halt. Lines stop completely.
Triggering Event
Stoppages typically occur when a surface mount technology machine detects a repeatable defect in incoming bare boards or when components fail to meet solderability standards during the first production run. While assembly line downtime charges are negotiated as part of a master service agreement, they are usually triggered by a failure to meet IPC Class 2 or Class 3 workmanship requirements. The buyer issues a debit memo based on the hourly rate of the specific line affected.
Cost Recovery
Calculation methods for these fees vary between contract manufacturers but generally hinge on a pre-determined hourly rate multiplied by the duration of the halt. A line producing high-density interconnect boards carries a higher rate than a simple single-sided assembly due to the complexity and capital investment involved. If a lot of fifty boards fails inspection and stops the line for two hours, the resulting assembly line downtime charges account for the fixed overhead that continued to accumulate during the delay.
This ensures accountability.