High scrap ratios and low production rates adds substantially to the production costs.

Scrap Ratio affects the Production costs – a definition

One way to keep your production costs low – and your profitability high – is to take care about your scrap rate. Scrap rates measure the failed assemblies or production of an output product which cannot be restored in relation to the total. Reasons for scrapping can be exemplary poor raw or input materials, careless set up procedures, faulty machinery or ineffective production operators.

As a consequence, you might not produce enough goods to fulfill all customer orders and lose sales volume. Through checking on high scrap rates certain product or production group production managers can try to find the root causes for it and take the respective measures to overcome the negative impact. (Iris Zimmermann)

What Causes Scrap and Rework in Manufacturing?

Scrap is a byproduct of an inefficient process. Causes can vary, including:

Machine malfunction
Can be caused by failing rollers
Poor quality materials
Low rubber quality on rollers
Human error
Design changes not communicated
Design changes not implemented
Lack of a quality assurance program

These items are controllable and in most cases, preventable with the right processes, systems, and training. 
The costs associated with poor quality products are high.
Every time that you produce scrap or have to rework parts, you’re increasing the cost of production.

Investing in improving your performance to reduce scrap can significantly lower the cost of producing parts and increase your profit margin. (Bluestreak)

To be continued ….