Defective units that fail inspection. Setup pieces produced during changeover before the process stabilizes. Trimmings, offcuts and residues from the manufacturing process. Damaged parts from handling. Expired material from over-purchasing. Each source is a specific opportunity for improvement.
The obvious cost is the material. The hidden costs are much larger: labor and machine time consumed producing the scrapped units, the same time consumed producing the replacements, disposal cost, storage of scrap-in-progress, and the lead-time impact of extra work-in-progress needed to compensate for expected scrap. A 5% scrap rate typically inflates total cost by significantly more than 5%.
SMED to reduce setup scrap. Poka-Yoke to prevent defects at source. First-piece inspection with quick correction. Standard work to reduce process variation. Root cause analysis on every recurring scrap event. Design for manufacturability to reduce trim and residue. Each intervention targets a specific category of scrap with a specific countermeasure.
Scrap is one of the most visible and one of the most attackable wastes. Measured by category and reduced systematically, it delivers both cost savings and quality improvement, and it usually reveals process capability issues that would otherwise stay hidden behind reworked-good yields.
