Tracking and Reducing Scrap with GoSmarter

This guide is designed for production managers, shop supervisors, and continuous improvement teams focusing on minimising scrap and waste in the manufacturing process. Learn how to use GoSmarter’s Scrap Calculator and Scrap Logger, and how to manage reusable offcuts through Inventory, to reduce costs, improve sustainability, and drive data-driven process improvements.

For a step-by-step walkthrough of the Scrap Management screen itself, see the Scrap Management tool guide — this guide focuses on the strategy and workflow around it.

Overview

Why Scrap Reduction Matters

Every bit of scrap represents:

• Lost money - Wasted material cost plus labor spent processing it
• Environmental impact - Unnecessary production, energy use, and CO2 emissions
• Inefficiency - Opportunities for process improvement
• Competitive disadvantage - Higher costs vs. competitors with lower waste

Real Results: In a trial, Midland Steel reduced scrap rates by 50% using GoSmarter’s planning optimisation tools. This directly improved profitability and sustainability.

How GoSmarter Helps

GoSmarter provides comprehensive scrap management tools:

• Scrap Logger - Record and categorise all waste
• Scrap Calculator - Assess the financial impact of improving scrap rates
• Offcut tracking in Inventory - Reusable remnants are first-class citizens to prevent waste
• Production Planning Integration - Optimise cuts to minimise scrap automatically

This guide shows you how to log scrap, analyse it, and use that data to take action that reduces waste.

Logging Scrap and Offcuts

Recording Scrap After Production

At the end of each production run or cutting session, log the scrap produced. Navigate to Production Planning → Scrap and select Add Entry — see the Scrap Management tool guide for the full step-by-step walkthrough of the entry form, editing, and record history.

Managing offcuts in inventory

Not all remnants are waste - many can be reused. Tracking offcuts in inventory helps you track reusable pieces:

1. After a cutting operation, identify usable offcuts (pieces long/large enough for future use)
2. Navigate to Production Planning → Inventory
3. Identify the relevant inventory item the offcut is from
4. If the offcut is the remainder of the inventory, edit the item and chane the type to “Offcut” and update the new dimensions
5. If only part of the inventory item was used to make an offcut, Split the original item and say what quantity or weight was originally picked to make the cut. This discounts the original inventory item and creates a new offcut item with the remaining quantity or weight. You can then edit the properties to reflect the new dimensions of the offcut.

The offcut is now available in your inventory for future orders requiring shorter lengths.

Example: Managing Rebar Offcuts

You cut 10 x 12m rebar bars into 10m pieces for an order:

• Ordered: 10 pieces @ 10m
• Source: 10 bars @ 12m
• Result: 10 offcuts @ 2m each

Instead of scrapping the 2m pieces:

1. Add the offcut to Inventory: 10 pieces, 2m long, grade B500C, 12mm diameter
2. Link to original heat’s certificate
3. Store in designated offcut area
4. Later, when an order needs 1.5m pieces, these offcuts can be used

Result: What would have been 20m of scrap becomes useful inventory, reducing both waste and future material costs.

For estimating scrap and cost before you start cutting, see the Scrap Rate Calculator guide.

Best Practices to Reduce Waste

1. Use Production Planning Optimisation

GoSmarter’s Production Planning tool (see Optimised Production Plans Guide) drafts optimised cutting patterns by:

• Analysing orders and available stock
• Generating plans that minimise scrap
• Proven results: 50% scrap reduction in trials

Action: Always run the Cutting Plans for long product cutting jobs rather than planning manually to save time and reduce waste.

2. Maintain Accurate Offcut Inventory

Reusable offcuts can’t help if you don’t know you have them:

• Log all offcuts immediately after cutting
• Store offcuts in organised, labelled areas
• Include offcut inventory in planning (Planner can suggest using offcuts)
• Regularly review and use older offcuts before they get damaged or lost

3. Optimise Stock Length Procurement

Use scrap data to inform purchasing decisions:

• Review which stock lengths generate most scrap
• Consider ordering different standard lengths that better match your typical orders
• Example: If you frequently cut 3.5m pieces, stocking 10.5m bars (3 x 3.5m) instead of 12m bars eliminates scrap

Action: Run a quarterly analysis of most common order lengths vs. most common stock lengths. Adjust stock inventory to minimise mismatch.

4. Regular Logging Drives Improvement

The act of measuring scrap makes people more conscious of it:

• Make scrap logging part of the job completion process
• Review scrap data in production meetings
• Set scrap reduction goals and track progress
• Celebrate improvements

Example KPI: “Reduce scrap rate from 15% to 10% over next quarter”

5. Investigate Scrap Spikes Immediately

When scrap suddenly increases:

• Use GoSmarter reports to identify when/where it happened
• Investigate the cause (machine issue, material quality, operator change, etc.)
• Fix the root cause quickly before it becomes normal
• Document learnings for future reference

6. Balance Speed vs. Waste

Sometimes rushing causes waste:

• Rushed jobs may skip optimisation to save planning time
• Result: Higher scrap from suboptimal cutting patterns
• Better approach: Invest 10 minutes in planning to save material worth hundreds of dollars

Sustainability Angle: Scrap and Carbon Footprint

Environmental Impact of Scrap

Scrap represents wasted resources and environmental impact:

• Energy - Energy used to produce steel that becomes waste
• CO2 Emissions - Carbon footprint of that wasted production
• Raw materials - Iron ore, coal, etc. that went into wasted steel
• Transportation - Emissions from shipping material that becomes scrap

Reducing scrap directly reduces your environmental footprint.

Using the Emissions Calculator

GoSmarter includes an Emissions Calculator (see Customising GoSmarter Guide for details):

1. Navigate to Utilities → Emissions Calculator
2. Enter parameters:
   • Material type (different steel grades have different carbon footprints)
   • Weight or tonnage
3. Click Calculate
4. View estimated CO2 emissions

Example: If you scrap 2 tons of steel per month:

• Input: 2 tons, Steel Grade 500
• Calculator shows: ~4 tons CO2 equivalent
• Annual scrap: 24 tons steel = ~48 tons CO2

If you reduce scrap by 50% (to 1 ton/month):

• Save 12 tons steel/year
• Reduce CO2 by ~24 tons/year

This data can support:

• Sustainability reporting
• Carbon reduction initiatives
• ESG (Environmental, Social, Governance) commitments
• Marketing claims about environmental responsibility

FAQ / Troubleshooting

Common Questions

Q: How do I edit a scrap entry if I made a mistake?

A:

1. Go to the Scrap page
2. Find the entry you need to change
3. Click Edit
4. Make corrections
5. Click Save

All edits are logged in the audit trail.

Q: What if scrap was reused immediately (not stored as offcut)?

A:

• If material was used in the same job, don’t log it as scrap
• If it will be used very soon, you can either:
  • Not log it (if it’s immediate reuse)
  • Log it as an offcut with a note “reused on Job #XYZ”

The goal is accurate tracking, so use whichever approach makes sense for your workflow.

Q: Does GoSmarter track scrap sales?

A:

• GoSmarter primarily tracks scrap generation and reduction
• For full scrap sales/revenue tracking, you may need to integrate with your finance system or ERP
• Contact support if scrap revenue tracking is a requirement

Q: Can I set scrap targets or goals?

A: Not at present, but you can monitor scrap trends over time in reports. Use this data to set manual targets for your team.

Q: How do I categorise different types of scrap?

A:

• You can customise the Inventory Types to track different types of scrap in inventory
• Common categories: Offcuts (reusable remnants), Trim waste, Defective material, Setup waste, etc.
• Alternatively, you can have different scrap bins/skips for different types of scrap and log accordingly in the Scrap tracker

Q: What if we have multiple production lines or locations?

A:

• Tag scrap entries with Line/Machine/Location
• Reports can filter by these tags
• This shows which areas have highest scrap rates
• Helps focus improvement efforts where they’ll have most impact

Integration with Production Planning

The Scrap Reduction Cycle

1. Plan optimally - Use Cutting Plans to minimise expected scrap
2. Execute - Follow the optimised cutting plan
3. Log actual scrap - Record what actually happened
4. Compare - Did actual match planned? If not, why?
5. Analyse - Use reports to find patterns and opportunities
6. Improve - Make changes based on insights
7. Repeat - Continuous improvement cycle

Using Both Tools Together

Production Planning Guide (see Optimised Production Plans) shows how to:

• Generate optimal cutting plans that minimise waste
• The Planner suggests which stock to use and how to cut it

This Scrap Guide shows how to:

• Track actual scrap vs. planned scrap
• Analyse trends and identify issues
• Manage offcuts for reuse

Together: Plan optimally, execute, measure, improve. This creates a data-driven scrap reduction program.