Making a good casting involves a number of costs. The major cost factor being the material cost. Material cost itself is dependent on the cost at which scrap is bought from outside to be used in our own processes. The cost of castable metal per kilogram or the unit spout cost can thus be calculated as a sum total of material cost (dependent on cost of scrap), energy cost, demand for electricity and cost of labor and cost of consumable material.
The scrap produced as a result of internal processes is a very important raw material and should not be wasted or thrown away. This internal scrap should be seen as valuable material and used to the highest possible extent. The cost or value of internal scrap can be calculated as a sum total of all components of spout cost leaving aside the cost of consumables which had been used while making molten metal. Thus, the metal cost component does not depend either on yield or proportion of scrap. This once again reiterates the high importance that should be placed on internal scrap.So much so, that the cost of internal scrap is considered even more than the furnace spout cost.
However, as scrap has already undergone the various processes, it is supposed to have consumed a high energy and labor input and cost. Also, scrap reduces the quantity of output that could have been produced from a given set of resources. Resultant of these arguments, it would not be wrong to say that scrap is another name of wastage of resources employed in processes and also in terms of revenue which could have been gained by sale of additional output had scrap been avoided.
With this view it can be said that cost of returns often exceeds the spout costs. Each organization should endeavor to reduce wastages and scrap at each step in casting operations, and thus if the scrap is reduced, the yield will automatically be maximized. This additional yield can be sold and thus revenues realized. Am effort can be made to reduce the amount of scrap by a careful study of each process and trying to find out how much scrap is generated at each step. Once this is studied carefully, it will be clear which steps result in the most wastage.
An effort should be made to see why this wastage is taking place and steps can then be taken to reduce the wastages and hence scrap. Reduction of scrap will result in an increase in yield.
HOUSEKEEPING- Incidence of scrap can be prevented by installing and following proper controls of each process. Also the best operational practices should be followed.
- All material which can be recovered and reused should be rescued. This can be done from output which has been rejected cutoffs etc. Such rescued material should be reused instead of being wasted as scrap.
- The scrap which is being sold to outside processes should be reevaluated to see if a higher value can be obtained from the same.