Scrap Expense as a Percentage of Plant Revenue

Benchmarking Report

Scrap Expense as a Percentage of Plant Revenue

This PDF report includes benchmarking data (in a visual, chart-based format), an comprehensive KPI definition, characteristics of high performers and technical details on measuring Scrap Expense as a Percentage of Plant Revenue. Purchase and download this easy-to-understand, presentation-ready report immediately to compare performance levels, set attainable performance targets, and push towards best-in-class performance for this KPI.


What is Scrap Expense as a Percentage of Plant Revenue?

The dollar value of scrap produced during the manufacturing process (e.g., units that are scrapped due to errors or defects as well as excess materials that cannot be used) divided by the total dollar amount of revenue generated by the plant, or production facility, over the same period of time, as a percentage.

Why should Scrap Expense as a Percentage of Plant Revenue be measured?

Scrap Expense as a Percentage of Plant Revenue measures the dollar value of scrap produced during the manufacturing process (e.g., units that are scrapped due to errors or defects as well as excess materials that cannot be used) in relation to the total dollar amount of revenue generated by the plant, or production facility, over the same period of time. Excessive expenses incurred by scrapped units is indicative of high rework rates, low quality of raw materials purchased (such low quality materials can cause in increase in rework due or scrap rate due to a high number of defects), poor preventative maintenance practices for plant equipment and machinery, and sub-par production employee training and performance. A high value for this metric not only reduces the opportunity to sell and deliver products to customers on-time, but it also has the potential to expose the company to reputational risks if an item meant to be scrapped is inappropriately sold. This can result in fines, item recalls and customer attrition.


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