Scrap rate

What is scrap rate?

Scrap rate is the percentage of goods or materials that can be recycled. Scrap rate is calculated by dividing the amount of scrap produced in a given time period by the total amount of output in that same time period. Scrap rate is important because it helps organizations evaluate their recycling efforts and determine if they're doing enough to reduce waste and conserve natural resources.

Who calculates scrap rate?

The industry that calculates scrap rates the most is manufacturing. There are also scrap metal dealers and businesses that buy and sell scrap metal, and they often need to be licensed in the United States. Depending on your location, some of these dealers must follow environmental regulations, safety regulations, and other laws.

How do you calculate scrap rate?

To calculate the scrap rate, divide the total scrap amount by the total product produced. You can use the following formula:

You can multiply your result by 100% to get the scrap rate as a percentage.

For example, let’s say your factory produces 1,000 bottle caps in a day. The number of bottle caps made that can’t be used (perhaps because of defects) is considered the total amount of scrap. That day 100 bottle caps are the total scrap left over. In this case, you would take 100 and divide it by 1,000 and get 0.1. You take 0.1 and multiply it by 100%, and get 10%.

Scrape rate % = 10%

Therefore, your scrap rate as a percentage for that workday is 10% (which is considerably high).

What is an acceptable scrap rate?

When calculating the scrap rate, it's important to remember that there are different types of scrap: plastic, metal, etc. Each industry has other criteria for an acceptable measure. Generally, anything under 5% is considered a reasonable scrap rate in manufacturing. If your scrap rate is over 5%, then there needs to be some investigation into the causes for such a high scrap rate.

What are some causes of a poor scrap rate?

Scrap occurs when there may be an issue in the production process. The most common reasons for a poor scrap rate are:

1. Poor quality materials are being put into the production process. For example, raw materials like metal may have impurities causing an increase in scrap.
2. There are machine or operating issues on the factory floor. For example, a machine may need corrective maintenance done to produce the product efficiently.
3. Production procedures need updating. For example, a new machine or process may have been added to a production facility, and team members still need to be trained on the latest production procedures.

What is the highest paying scrap?

Scrap is a valuable resource, and the price of scrap varies based on its composition. The highest-valued scrap items contain copper, gold, and silver. Another valuable type of scrap is aluminum. Aluminum scrap is a type of metal that can be recycled and used for various purposes. By melting aluminum, you can make new products (which is why it's high value).