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Scrap is the easiest cost to ignore because it shows up in COGS, not on its own line. This calculator pulls it out of hiding. Plug in your scrap rate and unit cost. See the full annual cost. Compare to what world-class plants achieve.
FAQ
Use the fully loaded cost: materials, direct labor, and overhead allocated to the unit. Materials alone undercount the loss because the labor and overhead time were also consumed making the bad part.
Yes. Rework counts against first-pass quality. If a part needed an extra step beyond the standard cycle to make it good, it is a quality loss, even if it eventually ships. The exception is when you have already counted the rework time inside another bucket; do not double-count.
Under 1 percent for most discrete manufacturing. Under 0.5 percent in mature lean plants and high-volume tier-one auto suppliers. Most small and mid-size manufacturers we work with sit between 2 and 5 percent on the constraint line.
Three steps. First, capture every event with reason codes. Second, run a weekly Pareto. Third, attack the top reason code with a 5-Why on the floor. The Sharpen scrap and downtime tracking guide walks through it. Pair with the OEE calculator and the 5S audit to see where your operating discipline is leaking.
BUILT BY OPERATORS, NOT CONSULTANTS