Reducing Scrap to Drive Profits

Costs wasted on scrap parts could very well be the difference in a manufacturer being profitable or losing money. Reducing scarp to zero may seem like a pipe dream but nearing this number could have positive implications on business. Scrap rates, as a percentage of sales, in the US vary from 0.6% to 2.2%. That is, 2.2% of total revenues for some manufacturers in the US are wasted due to inefficiencies in the manufacturing process, creating scrap. Increasing manufacturing efficiency and reducing scrap costs are key in driving a profitable manufacturing operation.

In this day and age, data is king and that is no different when it comes to scrap reduction. Collecting and analyzing data draw awareness to the true cause of scrap in the manufacturing process. Without data, manufactures often fall into the trap of fixing what they perceive is driving inefficiencies, when there is no validation of the true cause. This can lead to manufacturers spending valuable time, resources, and money to fix an issue they don’t have. Using this data will allow manufacturers to make informed decisions and to address their true inefficiencies throughout the manufacturing process, reducing waste and saving money.

Utilizing data allows companies to determine which processes are working and which are not. It is imperative to maintain consistency on the working processes in order to not increase waste. Kaizen is the Japanese word for improvement. Kaizen is the process of continuously making small changes that drive improvement, reducing inefficiencies that are driving waste. Kaizen is just one of many quality management techniques that can be used to reduce waste. Regardless of the technique chosen, it is near impossible to get to 0 scrap, however driving toward this number is the key toward an efficient manufacturing process, leading to less waste and increased profits.


What new technologies can help to reduce scrap?

What is the best way to collect and analyze data around the manufacturing process?

How do we get to 0 scrap in the future?