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98 SMT Magazine • February 2015 cal of this practice because he sees the results at test and often also as product failures in the market. exposure We met again with the plant management. We have solved the mystery. There is no one to blame here specifically, just practices that have changed through years of continued evolution of production, where machines have become faster, more materials of ever-decreasing size are required for each product, and the number of product variants and mix of different products in production has been increasing. Each of the people we talked with put forward a perfectly justified story as to how they work. The prob- lem was, however, the result was a huge loss of materials. The root cause of the problem is that SMT- related spoilage is volatile. While some of this cannot be avoided, a significant part of it can. As spoilage happens, additional materials are needed which, because of the quite impossible task of managing partly used materials on the shop floor, trigger the disappearance of mate- rials from the warehouse. Substitute materials cause increased spoilage on the machines and corrupt the material consumption records in- side ERP, because production BOM changes are not always declared. The problem stays hidden in the mass of unmanaged partly used materi- als, compounding the problem day by day until a point is reached where, even with the bloated inventory, the factory cannot cope. This results in the large amount of missing stock at the stock check. A portion is caused by SMT machine spoilage. More is from damaged parts that have been discarded, during a hectic life on the shop floor, especially MSD- or ESD- sensitive materials. Some materials will have been used as substitutes, but not accounted for, leaving the original materials misplaced, with ERP unable to reallocate them, resulting in the purchase of needless replacement stock. Although the stock-check has revealed a loss of $6 million of materials, there should also be the "discovery" of these lost materials that by now have become old, perhaps obsolete and unus - able. In the meeting, the CFO looked at his lap- top and confirmed that this was indeed the case. The CEO looked frustrated. The conspira- cy is real and ongoing, but actually there is no one to blame and no seemingly easy way to im- prove things. Everyone was working according to their priorities and goals. How then to break out of this endless cycle of needless material- related cost? The Lean Materials Solution The solution that we suggested brings a rad- ical change in the way that material logistics is performed, but it was received well because it is much less of a perceived risk when consider- ing what it replaces. We proposed keeping track of all materials on an individual reel basis, and keeping all materials in the warehouse unless actually needed on the shop floor. Connections should be made to the SMT machines and oth- er processes, to verify the materials as they are setup, and to automatically gather the actual usage and spoilage data during process execu- tion. ERP can then be informed of all material consumption, allowing timely adjustment of reordering to cover any actual spoilage. The last-minute reactions to compounded issues are avoided, reducing the majority of the material damage and loss. The necessary materials are available to keep production running, but it is simulated in software rather than materialized physically on the shop floor. Retaining an accurate stock inventory measurement between ERP and the physical stock means that the artificial internal material shortages are eliminated. Everyone involved in the "conspiracy" gets what they need, as does the business. It's time to stop the SMT conspiracies! Just because "it has always been done this way" does not mean that a radi - cal change, for example, to Lean just-in-time material management, should be overlooked. How much more compelling do the reasons for change need to be? SMT Michael Ford is senior marketing development manager with Val- or division of Mentor Graphics corporation. To read past col- umns, or to contact the author, click here. the essential pioneer's survival Guide STOP THe SMT CONSPIraCy, ParT 2: abduCTION continues