Hello fellow Jewelers, Has anyone ever had to try and assign
projected scrap totals for their shop or shops. Say you have somebody
else running your shop or shops and they are responsible to manage
the controllables, scrap being one of them. How can you as the owner
feel comfortable that the scrap produced by your shop ( shops) is
accounted for? If you assign a percentage of billings what would the
percentage be? 10% ? Ex. $10,000.00 x.10 $1000,00 divided by current
scrap price per Dwt. Dwt. needed. If not a percentage of billing then
what? What do you Veteran jewelers think or know that you could share
with me? Thank You… in advance. Bruce
$1000,00 divided by current scrap price per Dwt. Dwt. needed. If not a per centage of billing then what?
Bruce you just can’t do that - not that way, anyway. That’s because
it all depends on what the shop is doing and how they are doing it.
And by scrap do you mean scrap or metal loss - that indefinable 3%
(more realistic) that somehow just vanishes but is there in the
sweeps somewhere? Back when I made turquoise jewelry we’d often
solder the design on a plate and then trim the plate off with shears
- more like 30% scrap but all recycleable and recoverable. Filing
and polishing cast engagement rings is more like under 10%, I’d
guess. Findings makers get into 50% at times with press work. Wedding
band lathes have a lot, too. But it’s all recoverable. The real loss
is only the 10% the refiners ding you when they buy it, vs what you
pay when you buy from them. For that reason findings manufacturers
often do in-house refining.
All you can do - and all the majors definately do it - is monitor
YOUR shop for a time and get some average numbers. Then you’ll know
the figures and if and when the numbers go haywire you’ll know
something’s up. Employee shrinkage…
Hi Bruce,
I have worked in and ran centralized shops for two large chain
stores that had anywhere from four to seven shop personnel. While i
myself could not really come up with a formula to calculate what
scrap weights i should have dependent on shop volume i took relief in
the fact that the bean counters couldn’t either and therefore force
some sort of scrap goal upon the shops. Here is how i approached the
scrap issue. #1 In my last shop.
We had 1 admin, 4 jewelers, 1 polisher, and the shop manager (me) The
best we could do is gather data, that meant recording monthly
totals. In this case dust, clean karat scrap, and sweeps went
directly to the refiner from the shop each month, so at the end of
the month me and only me gathered, weighed, shipped, recorded and
reported weights to corporate every month for the life of the shop.
Which in some instances would mean you would have to wait a whole
year to see if someone in our shop had sticky hands. But you can see
the fruits of your data earlier if you study the weights of your
scrap vs the volume of the shop. Example like during the spring and
summer the shop will have fairly flat or even volumes for consecutive
months (we always had the exact number of jobs and types of jobs for
every week in the form of spreadsheets.) So if one month we produced
1400 repairs and aprox. 60dwt of karat scrap and the next month we
had 1600 repairs and a number of dwt suspiciously lower or even then
we knew we had a problem.
How i tried to control this was by monitoring who was going threw
sizing stock vs there personal shop productivity, and all scrap and
bench dust had to be deposited in the open shop at the end of the
night and as manager i was always the last one out and the jars of
scrap were locked in the safe until the next morning.
#2 The single man shop.
All scrap was sent directly to corporate instead of going to the
refiner from the shop. From there the bean counters could make
observations about the weight of the scrap vs the stores outside
repair retail sales and volume from out of case transactions (selling
bridal etc,) Now with this company we had probably 40 satellite
jewelers all over the country so it was easy to see who was light on
their scrap vs the volume of the stores they were doing work for. So
it was a dead giveaway if you did work for a 3 million dollar store
and were turning in scrap weights less than the jeweler at the 1
million dollar store.
The short,short of it is there wont be a solid way to calculate it.
It just takes lots of data and a trust worthy crew. Only after all
the data has been collected can we make “strong assumptions” as to
what those totals should be.
Hope this helps, but if your in charge of a large group of shops i
have a feeling you already knew all this and was just curios what the
old timers thought.