Almost every production process generates process waste: material, products, offcuts, rejects, by-products, wastewater, packaging, or other outputs that leave the process without creating value for your customer. Improving how you manage waste can save you money, while reducing emissions and pollution.

The direct cost is the visible one: segregation, handling, storage, collection, transport, treatment, and disposal. The wider, often hidden, cost is what you have already invested in the wasted material: raw materials and components, energy and water, labour time, machine time, consumables, and overheads added at each production step. As a result, the true cost of waste can be many times higher than the disposal invoice alone.

This is also why waste is closely linked to your carbon footprint: when you generate waste that must be processed, you also discard the greenhouse-gas emissions associated with producing and moving the materials in the first place, plus the emissions from treating or disposing of the waste.

This guide aims to help you identify the true cost and impact of your waste, and to start reducing it.

This guide is relevant to all businesses that generate process waste, for example offcuts from trimming operations (e.g. metal offcuts from sheet cutting, or plastic sprues and runners from moulding), or rejects from quality failures (e.g. parts that fail inspection and are scrapped, or batches that must be reprocessed because they are out of specification).

It will be less useful if your business produces minimal waste, or if you are able to recycle internally within the process. However, even for these businesses, the process of mapping waste generation can still result in opportunities for improvement.

Note:

All waste should be managed using the “waste hierarchy,” which is described below. Where possible, treat waste according to the first step on the hierarchy, and only go on to subsequent steps if you have to.

The most effective way to manage waste is to avoid its creation altogether.

How you go about preventing waste will depend on your business and production processes. In general, a good way is to create a process flow diagram , showing all the inputs (raw materials, inputs from preceding step, employee time, energy, water etc.) and all the outputs (material for next step, waste heat, effluent, waste material etc.). Putting costs on these inputs and outputs helps to put the cost of waste into context: it shows how much more costly it is to damage a finished product, as all the embodied costs of every step required to make that product are also wasted. By comparison, wasting a little raw material for the first step is cheaper. This process helps to model not only where waste is generated, but also how much it costs. You can do the same thing for other impacts, such as greenhouse gas emissions.

Where prevention is not possible, reducing the amount of waste generated is the next best option.

As with prevention, the key to this is also data. Before you can understand how to reduce waste, you need to know where it is generated, and how much; and you need good enough data to be able to spot trends in the quantity of waste produced. This means measuring your process in much more detail than just “number of skips.” Keep tabs on production hours and output, as you will need them for a baseline.

This process will usually result in an obvious increase in the value of waste, the further down the production process it is generated. If a finished product is damaged in storage or transit, all the costs and impacts of the production process have been incurred for nothing. So a good example of how to reduce waste is to ensure that finished product storage is carefully managed, and that packaging is up to the job of protecting product. Moving back up the process, how and where waste is generated depends on your process. It can be as simple as careless spillage, unusable out of specification intermediate product caused by a poorly managed process, excessive trimming, contamination; really anything that prevents all of the output from one process step from being used in the next.

Giving products and materials a second life through reuse helps cut down on waste.

The trick here is to treat waste with respect. It may no longer be a useful resource for you, but it will be for someone, although only if you ensure that it is carefully segregated and kept free from contamination. A skip full of mixed waste and rainwater is unlikely to have any value. The same skip full of clean, dry, segregated waste has value, so you can be paid for it, rather than paying to dispose of it.

Recycling turns waste into new products, conserving resources and reducing environmental impact.

Where possible, ensure that as much of your waste as possible is recycled. But also, where possible, use raw materials with high recycled content. Everything you can use again reduces the amount of new raw materials that need to be created, reducing cost and environmental impact.

When waste cannot be prevented, reduced, reused, or recycled, it should be disposed of responsibly. This means using methods that minimise harm to the environment and comply with legal requirements.

Even if you are disposing of waste, it is still helpful to segregate it and store it carefully, as mixed and contaminated waste are harder to treat.

❌Thinking that the cost of waste disposal is the true cost of waste. The real cost is much higher.

❌Treating waste as an unavoidable cost. In reality, it is almost always possible to reduce the cost and impact of waste, and to improve process efficiency while you do.

❌Mixing waste streams. This reduces their value to recyclers and makes them more difficult to dispose of.

❌Storing waste carelessly. This leads to contamination and a degradation in quality, making it harder to recycle and less valuable.

Analysing where waste is generated, and how it is managed and treated, typically results in both direct waste management savings, and higher indirect savings through process efficiency improvements.

It can be time-consuming to model your production processes, gather relevant input and output data, and analyse trends and hotspots. It is worth it, though.

Waste is a cost for most businesses, but in addition to the direct cost of waste management, there is a much higher hidden cost from the embodied value added to waste. It also represents and identifies inefficiency in the production process, which can result in significant savings and reduced environmental impact when addressed.

Recognising the value embedded in waste and actively seeking ways to improve processes can offer substantial savings and achieve meaningful reductions in environmental impact. Start by identifying where waste is generated and what it is really worth, then use this knowledge to implement a programme of waste reduction: the savings will quickly mount up.

Find out more in Sage University's Reducing Carbon Emissions courses:
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