Scrap Rate
Percentage of raw material or finished product discarded due to defects or non-conformance
What is Scrap Rate?
Scrap rate is the percentage of input material that ends up as scrap rather than saleable product. It shows how much material is wasted in production.
Scrap wastes material, labour and energy, so reducing it improves margin and sustainability.
How this KPI is measured
- Function
- Operations & Supply Chain
- Sub-function
- Quality Control
- Industry
- Manufacturing
- Type
- Lagging
- Impact
- Quality
- Unit
- %
- Measurement frequency
- Daily / Weekly
- Formula
- (Volume or value of scrap / Total material input) × 100
How to calculate it
Divide the volume or value of scrap by total material input, and multiply by 100.
For example, if 20,000 kg of scrap was produced from 400,000 kg of material, the scrap rate is 5%.
Use the same measure, volume or value, each time, and record causes such as set-up losses, defects and cutting waste.
Where it is used
Cutting material cost
Reduce waste.
Improving processes
Find causes of loss.
Supporting sustainability
Use resources well.
How to improve it
Tips and common mistakes
- Include both value and volume where useful.
- Compare like products and lines.
- Do not hide scrap as rework.
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