Scrap and yield
The proportion of what you made that could not be sold.
01 What it is
Why anyone looks at this number
The proportion of what you made that could not be sold.
Scrap is paid for twice: the material and the capacity used to make it. It is usually the cheapest margin available, because nothing has to be sold to capture it.
02 The formula
How it is worked out
Scrap and yield = scrapped_quantity ÷ total_produced (yield is the inverse) grain : shift × line × product unit : percentage source : MES and production confirmations
Rework is not scrap, but it is not free either. Track both, with the labour cost of rework attached, or the true cost of quality stays hidden.
03 Worked example
The same number, with real inputs
| Produced | 4,120,000 units |
| Scrapped | 120,000 units |
| Direct cost per unit | €8.00 |
| Calculation | 120,000 ÷ 4,120,000, at €8.00 |
| Result | 2.9%, or €960k |
Nearly a million euros, and the capacity that made it. Halving it is worth more than a 1% price rise, and needs no customer conversation.
04 What moves it
Four things that actually change this number
Start-up losses
Waste at the beginning of every run, which makes short runs expensive.
Material quality
Inbound variation that the process cannot absorb.
Process control
How tightly the line is held to specification.
Skill and shift pattern
Scrap that differs by shift is a training or staffing signal.
05 Where the number lives
The system, the record and the fields
| System of record | Key record | Fields you need |
|---|---|---|
| MES and production confirmations | Work order joined to Material movement | good_qty, scrap_qty, rework_qty, scrap_reason, batch |
Rework is not scrap, but it is not free either. Track both, with the labour cost of rework attached, or the true cost of quality stays hidden.
06 How it goes wrong
Three ways this metric misleads people
Counting rework as good
The units ship, so the cost of doing it twice never appears.
Fix: Track rework hours and cost separately.Aggregating reasons into "other"
The largest reason code becomes meaningless within a year.
Fix: Keep a short, audited reason list and review it quarterly.Ignoring start-up waste
It is treated as unavoidable, which makes short runs look cheaper than they are.
Fix: Attribute start-up scrap to the changeover, so run-length decisions see the real cost.08 Questions
Frequently asked
Is scrap a quality metric or a cost metric?
Both, and that is why it gets under-managed. Quality owns the cause, finance sees the effect, and neither sees the whole number unless the two systems are joined.
What about material that can be reprocessed?
Count it separately from true scrap, with the reprocessing cost attached. Recoverable does not mean free.
One definition, everywhere it is used
SCIKIQ stores this metric once and serves it to every dashboard, board pack and agent that asks.