The industrial waste and scrap consists of spoiled raw-materials, rejected components, defective parts, waste from production departments etc. involves some commercial values. They should be disposed of periodically and proper credit of the amount should be taken in the books of accounts.
Hence, waste management places an important role in managing operations. Wastes can be categorised into obsolete, surplus and scrap items.
1. Obsolete items: These are those materials and equipment which are not damaged and which have economic worth but which are no longer useful for the Company‘s operation owing to many reason such as, changes in product line, process, materials, and so on.
2. Surplus items: These are those materials and equipment‘s which have no immediate use but have accumulated due to faulty planning, forecasting and purchasing. However, they have ausage value in future.
3. Scrap: It is defined as process wastage, such as, turnings, borings, sprues and flashes. They may have an end-use within the plant having commercial values. Hence, should be disposed of periodically.