Risk Allocation
Contractual limits define the maximum amount of material waste an assembly partner is expected to absorb before the customer pays for the loss. Establishing scrap liability thresholds protects both the manufacturer and the client by setting clear expectations for process yield. These limits are typically expressed as a percentage of the total material value or a fixed number of components.
If the waste remains below this limit, the manufacturer covers the cost as a standard expense.
Yield Accountability
Complexity in the assembly process often dictates how much waste is considered acceptable for a given design. High density boards with thousands of placements per unit naturally have higher scrap liability thresholds than simple boards with a few large components. When the actual scrap exceeds the agreed limit, a reconciliation process begins to determine if the loss was caused by poor quality components or manufacturing errors.
Detailed logs from the pick and place machines provide the evidence needed to settle these claims. Negotiating these values is a standard part of the quoting process for any new electronics project.
Closing Adjustment
Financial settlements are made at the end of a production run to settle any overages. The recovery process utilizes the audit trail from the production lot reconciliation to justify the final billings. Clear thresholds prevent disputes over minor variations in machine efficiency.
