Title: How to Handle Scrap in Production URL: https://zudoworks.com/answers/how-to-handle-scrap-in-production/ Description: How to handle scrap in production: planned scrap in the BOM, unplanned scrap with a reason code, scrap cost kept on the job, a weekly review by cause. Updated: 2026-11-03 # How to handle scrap in production Handle scrap by recording it at the step where it happens, with the quantity, a reason code and whether the part can be reworked. Expected scrap goes into the bill of materials as a scrap percentage so material plans and costs include it. Unexpected scrap is posted as a stock movement with a reason and reviewed weekly by cause. The cost stays on the job that produced it. By Arunkumar V, CTO · 03 November 2026 · 2 min read [Try ZMOS free](https://app.zudoworks.com/signup) [Book a 20-minute demo](https://zudoworks.com/contact/) - how to handle scrap in production - scrap percentage in BOM - recording scrap on a work order - scrap reason codes ## Planned versus unplanned scrap Planned scrap is the loss you know will happen: offcuts from nesting a sheet, the first part used to prove a setup, a casting that loses weight in machining. It belongs in the BOM as a scrap percentage on the component or the operation, so the planner orders enough material and the cost roll-up includes it. Unplanned scrap is a part made wrong: a bend at the wrong angle, a hole off position, a weld that failed inspection. It is recorded on the work order at the step where it was found, with a reason, and should raise a non-conformance report if it repeats. Keeping the two apart is what makes the scrap report useful. ## Putting planned scrap in the BOM If an operation scraps a known percentage, the quantity to start is the quantity needed divided by one minus the scrap fraction. Say you need 100 good blanks and 2.5 per cent are normally lost in first-off and nesting: start quantity = 100 ÷ (1 − 0.025) = 102.56, so start 103 blanks. These are example figures. Put the percentage on the BOM line or routing step where the loss occurs, not as a blanket figure on the whole product. A blanket figure overstates material on steps with no loss and understates it where the loss is concentrated. Review the percentages twice a year against actual scrap recorded on jobs. ## Recording and reviewing scrap on the job Scrap is recorded when a step completes, alongside the good quantity, with a short reason code list that fits on one screen. Review scrap weekly by reason code, work centre and supplier: if most of it comes from one press brake on a new part, the routing instructions need work; if the top cause is a material defect from one supplier, purchasing has evidence for the conversation. - Material defect, with the supplier and lot if known. - Setup or first-off, which is often planned scrap. - Operator error at this step. - Machine or tooling fault. - Drawing or BOM error. - Damage in handling or storage. ## How to record and review scrap 1. **Step 1** Add a scrap percentage to each BOM line or routing step that has a known, repeatable loss. 2. **Step 2** Agree a short list of scrap reason codes and put it on the job card or the step completion screen. 3. **Step 3** When a step completes, record good quantity and scrapped quantity with a reason code, and post the scrapped material as a stock movement. 4. **Step 4** Raise a non-conformance report when scrap at a step exceeds a small tolerance or repeats. 5. **Step 5** Review scrap by reason code, work centre and supplier each week and fix the top cause. ## Where ZMOS fits ZMOS bills of materials carry scrap allowances in the cost roll-up, work orders record quantities per routing step, and scrapped material posts to an immutable stock ledger so the job cost includes it. Quality inspections with photos and signatures, NCRs and CAPA are linked to items and jobs. It fits sheet-metal, machining and fabrication shops of 10 to 50 people. If you need statistical process control charts or automatic machine fault capture, that is a specialist quality system rather than a small-shop ERP. See quality in ZMOS. [What ZMOS does](https://zudoworks.com/zmos/) - [BOM scrap and cost roll-up](https://zudoworks.com/zmos/production-and-bom/) - [quality in ZMOS](https://zudoworks.com/zmos/quality/) - [the immutable stock ledger](https://zudoworks.com/zmos/stock-ledger/) ## People also ask Short answers, each one complete on its own. ### Related answers - [How do I calculate job cost in a small manufacturing shop?](https://zudoworks.com/answers/how-to-calculate-job-cost/) - [What is a bill of materials?](https://zudoworks.com/answers/what-is-a-bill-of-materials/) - [What is an NCR and CAPA?](https://zudoworks.com/answers/what-is-an-ncr-and-capa/) - [How do I run quality inspections in a small shop?](https://zudoworks.com/answers/how-to-run-quality-inspections/) - [What is OEE?](https://zudoworks.com/answers/what-is-oee/) - [How do I measure on-time delivery?](https://zudoworks.com/answers/how-to-measure-on-time-delivery/) - [Can AI run a manufacturing ERP safely?](https://zudoworks.com/answers/can-ai-run-a-manufacturing-erp-safely/) - [All 54 answers](https://zudoworks.com/answers/) ### Inside ZMOS [Zudo AI](https://zudoworks.com/zudo-ai/)[Stock ledger](https://zudoworks.com/zmos/stock-ledger/)[Low-code forms and rules](https://zudoworks.com/zmos/low-code/)[Barcode job cards](https://zudoworks.com/zmos/barcode-job-cards/)[Roles, audit log, API](https://zudoworks.com/zmos/roles-audit-api/)[Security](https://zudoworks.com/zmos/security/)[Free trial](https://zudoworks.com/zmos/free-trial/)[Why Zudo Works](https://zudoworks.com/why-zudo-works/) Should scrap be included in the cost of the job? Yes. Material and labour spent on a scrapped part were spent on that job, so they stay in the job cost. Dividing total job cost by good quantity only, not by the quantity started, shows the true cost per unit including the loss. What is a reasonable scrap percentage? There is no single right figure; it depends on the process, the material and the part. The useful number is your own: record scrap for a few months, calculate the percentage per operation, and use that in the BOM. How do I handle parts that can be reworked instead of scrapped? Record them as rework, not scrap, and book the rework hours as a separate time type on the job. The part still counts as good output once it passes. Keeping rework hours visible shows which steps cause the most. Does scrap need a stock movement? Yes. Scrapped material left on the job in the ledger makes the job look like it still holds it and leaves the stock balance wrong. Post a scrap movement with the reason so the ledger and the job cost agree.