What scrap and wastage is
Scrap is raw material that is consumed during production but does not end up in the finished product — off-cuts, spillage, rejects, or material lost during processing. Wastage is the difference between what your BOM says you should use and what you actually used to produce the same quantity of finished goods.
Recording scrap and wastage accurately is important for two reasons: it keeps your raw material inventory correct, and it helps you identify where your production process is losing value.
How to record scrap during a production order
- Open the active production order
- Click Record scrap
- Select the material that was scrapped
- Enter the quantity scrapped
- Select a scrap reason: Processing loss, Quality rejection, Spillage, Machine fault, or Other
- Click Save
The scrapped quantity is deducted from your allocated raw materials and recorded as a production loss. It does not return to available inventory.
How scrap affects your cost calculation
Scrap cost is included in your total production cost — the material that was scrapped still cost money, even though it did not produce finished goods. This is why your actual cost per unit may be higher than your BOM predicts — the BOM assumes zero waste. Real production always has some.
Tracking wastage trends
Go to Reports → Production efficiency report. The wastage section shows your scrap rate per production run and per product over time. A rising scrap rate is an early warning sign of equipment wear, operator error, or a raw material quality problem.