The true cost of scrap within the metalcasting industry

Synchro ERP, a complete integrated production control and management information system developer specifically designed for the foundry and cast metal industry, embarks on scrap study.

Imagine a high volume automated foundry running an overall 21% scrap rate with suspect castings making it to the customer’s production line. A new general manager takes the helm and mandates that scrap will be no higher than 4%. Within two weeks and without any tooling changes, production changes, or scrap analysis, the new scrap target was achieved.

How was this possible? As it turns out, the solution was to “remelt and not report our mistakes”. WIP and material inventory numbers become skewed when castings are remelted without being reported. Once the remelt bins were monitored to prevent unreported scrap from being remelted, the motto became “we bury our mistakes”.

Material inventory, WIP, and Finished Goods continued to spiral out of control and the computer department was told that the software could not add and subtract and that a bug must exist. The financial controller of the company and the production supervisor stopped and inspected a dump truck leaving the facility with spent moulding and core sand. Upon further examination, buried in the sand were scrap castings. The landfill was dug up and hundreds of tons of scrapped castings were located. The moral to the story: scrap reduction can only be achieved through analysis and changes and that a modern ERP software solution is required.

Synchro ERP embarks on a technical scrap reduction study
There are different types of scrap and a cause and effect relationship between the scrap reasons. In order to understand scrap, root cause analysis is paramount. With root cause analysis through a modern ERP-MRP software solution, the cost of the analysis can be minimised. Data entry of the production WIP and scrap is required and should be able to be achieved with a minimum of time and effort. Modern software solutions provide cost effective methods of data input through shop floor data collection terminals and tablet applications. Before embarking upon a scrap analysis reduction programme, goals should be established such as reduction in PPM, identifying scrap or suspect castings at the earliest possible process step, and ability to identify the true cost savings.

Synchro ERP, a specific software ERP system developer for the cast metal industry, has embarked on a technical scrap reduction study and associated cost analysis with a large USA customer.

The study will be published in a multi-part series in which the company will define, control and analyse the results. The authors maintain that all scrap reduction improves the bottom financial line. There is an economic opportunity cost associated with scrap in that the money, time, and materials could have been expended on other profitable endeavours. There is a real cost and a hidden cost associated with scrap. The real costs are easily derived while the hidden costs must be dug out of the landfill.

Since 1975 Synchro ERP have been providing industry specific focused solutions for the cast metal industry, covering every aspect of the foundries. Synchro ERP is dedicated to specific software ERP systems within the sector.

These include:

• Iron foundry ERP software
• Steel sand foundry ERP software
• Centrifugal casters ERP software
• Aluminium sand foundry ERP software
• Diecasting (pressure diecaster) ERP software
• Gravity diecasting (permanent moulder) ERP software
• Precision moulder (precision moulder) ERP software
• Investment Casting ERP software
• Loss wax & lost foam casting ERP software

Synchro ERP’s software is a fully integrated system that facilitates extensive control of your business. The software offers depth and breadth of function with a wide range of flexible facilities designed to meet the unique requirements of your company. Features of the software include production and scheduling, costing and estimating, pattern and tooling, shop floor data collection, sales and marketing and much more

Synchro ERP also have an app for Android and Apple tablets that will allow foundries, in real time, to enter information accurately into the software system.

Metal Casting Conference 2017
Synchro ERP will be exhibiting at the Metal Casting Conference 2017. Visit them at stand 24.

The company welcomes your input into this study. However, the first report of the multi-part study is available at: Email

For further details contact Max Morgan and Associates on 082 920 3081 or email or visit