In the metals industry, internal scrap is an unavoidable byproduct of processing raw materials into finished goods. However, excessive scrap can lead to higher production costs, wasted resources, and lower profitability. Identifying and minimizing common sources of internal scrap helps businesses improve efficiency and reduce material waste.
In this blog, we’ll explore the most common causes of internal scrap in metal processing and how to prevent unnecessary material loss.
What is Internal Scrap?
Internal scrap refers to metal waste generated during manufacturing and processing. Unlike external scrap (which comes from end-users or post-consumer recycling), internal scrap is produced within the facility and can often be recycled or reused.
Why Managing Internal Scrap Matters:
✔ Reduces material waste and production costs
✔ Improves operational efficiency
✔ Lowers environmental impact
✔ Enhances profit margins by maximizing usable material
Now, let’s break down the common sources of internal scrap and how to address them.
1. Offcuts & Trim Waste
❌ The Problem:
During cutting, shearing, and stamping, excess material is removed to create the final shape. These offcuts and edge trims contribute to scrap, especially if nesting or cutting layouts are not optimized.
✅ How to Avoid It:
✔ Use optimized nesting software to reduce leftover material.
✔ Plan cuts efficiently to maximize sheet or coil usage.
✔ Implement a scrap recovery program to repurpose trim waste.
💡 Example: A metal fabrication shop producing stainless steel panels reduced trim scrap by 6% by optimizing its laser cutting layouts.
2. Incorrect Material Selection
❌ The Problem:
Using the wrong metal grade, thickness, or finish can result in rejected parts that must be scrapped or reworked.
✅ How to Avoid It:
✔ Double-check material specifications before processing.
✔ Train employees on reading and verifying mill certifications.
✔ Use automated tracking systems to match the correct materials to each job.
💡 Example: A manufacturer accidentally used mild steel instead of high-strength steel for structural components, leading to a 20% material loss due to rework and scrap.
3. Processing Errors (Cutting, Bending, Welding)
❌ The Problem:
Errors in cutting, bending, stamping, or welding can create defective parts, leading to internal scrap. Common mistakes include:
Misaligned cuts from laser, plasma, or waterjet machines
Over-bending or under-bending due to incorrect die selection
Welding defects such as porosity, cracks, or incomplete fusion
✅ How to Avoid It:
✔ Use calibrated, well-maintained equipment for precise processing.
✔ Train operators to set correct machine parameters.
✔ Implement quality control checks at each processing stage.
💡 Example: A metal fabricator reduced bending scrap by 15% by switching to CNC press brakes with real-time angle correction sensors.
4. Poor Tooling Maintenance
❌ The Problem:
Dull, misaligned, or worn-out tools can result in:
Jagged cuts and burrs requiring rework
Distorted parts due to improper forming pressure
Inconsistent hole sizes from worn-out drill bits or punches
✅ How to Avoid It:
✔ Regularly inspect and replace cutting tools, dies, and blades.
✔ Use high-quality tooling to extend tool life and improve precision.
✔ Keep a preventive maintenance schedule to reduce unplanned downtime.
💡 Example: A stamping plant extended die life by 30% by implementing a scheduled sharpening and replacement program.
5. Operator Errors & Manual Handling Issues
❌ The Problem:
Human error is a significant contributor to internal scrap, often caused by:
Misreading blueprints or specs
Inconsistent part alignment
Damage during transport or stacking
✅ How to Avoid It:
✔ Provide detailed work instructions and process training.
✔ Implement standardized work procedures to minimize mistakes.
✔ Use material-handling equipment (forklifts, conveyors) to reduce manual handling damage.
💡 Example: A coil processing facility reduced scrap by 10% by training operators to use laser-guided material handling systems instead of manual lifting.
6. Overproduction & Excess Inventory
❌ The Problem:
Producing more than required leads to excess stock, which may:
Become obsolete if design changes occur
Develop corrosion or defects over time
Take up valuable storage space
✅ How to Avoid It:
✔ Implement lean manufacturing to match production with demand.
✔ Use real-time inventory tracking to prevent overstocking.
✔ Review production schedules to minimize unnecessary runs.
💡 Example: A metal parts supplier reduced excess inventory by 25% by shifting to a just-in-time (JIT) production system.
7. Poor Quality Control & Inspections
❌ The Problem:
If defects are not caught early, entire production runs may be scrapped. This can result from:
Inadequate in-process inspections
Failure to follow quality standards
Inconsistent measuring tools
✅ How to Avoid It:
✔ Conduct in-process inspections to catch defects before full production.
✔ Use precision measurement tools to ensure compliance with tolerances.
✔ Establish clear reject criteria to prevent defective parts from moving forward.
💡 Example: A stainless steel manufacturer reduced reject rates by 40% by introducing real-time laser measurement tools for thickness control.
8. Improper Scrap Management & Recycling
❌ The Problem:
If internal scrap isn’t properly sorted and recycled, valuable material is wasted.
Mixing different alloys makes recycling inefficient.
Unorganized scrap collection can lead to contamination.
Lost revenue from not selling or reusing scrap.
✅ How to Avoid It:
✔ Separate scrap by material type (carbon steel, aluminum, stainless steel, etc.).
✔ Implement a recycling program to reduce waste costs.
✔ Work with scrap buyers to recover material value.
💡 Example: A metal processing plant cut scrap disposal costs by 35% by implementing a segregated recycling system for different metal grades.
Final Thoughts
Internal scrap is a hidden cost in the metals industry, but it can be minimized with better planning, training, and process optimization.
📌 Key Takeaways:
✅ Optimize cutting layouts and nesting to reduce offcuts.
✅ Train operators to prevent material selection and processing errors.
✅ Maintain tools and machinery to ensure precision.
✅ Use quality control checks to catch defects early.
✅ Implement a scrap recycling program to recover lost material value.
By addressing these common sources of internal scrap, companies can boost efficiency, lower costs, and maximize material utilization.
🚀 Need help reducing scrap in your facility? Let’s discuss in the comments!
