Not everything production touches comes out good. Some material is scrap, and some needs rework. Handling that material properly is part of running a manufacturing operation. This piece is about handling scrap and rework inventory in Odoo.
Scrap and rework: the two kinds of not-good material
When production produces material that is not good, there are broadly two possibilities. Scrap is material that cannot be made good: it is defective or unusable, and it will not become a sellable product. Rework is material that is not good as it is but can be made good: it has a defect that can be corrected, and after the corrective work, it can become usable. Distinguishing the two is the first step in handling not-good material: is this scrap, to be written off, or rework, to be corrected?
Handling scrap
Scrap has to be handled so it is recognised as scrap and removed from usable stock. Odoo handles scrap as a deliberate recorded event, with dedicated scrap locations: when material is scrapped, it is recorded as scrap and moved to a scrap location, which takes it out of the usable inventory. This matters for two reasons. First, it keeps the usable inventory honest, scrapped material is no longer counted as good stock, so the stock figures reflect what is genuinely usable. Second, recording scrap is what lets the cost of scrap be known and analysed, which is the basis for reducing it. Handling scrap properly means always recording it as scrap rather than letting defective material just vanish or, worse, sit unrecognised among good stock.
Handling rework
Rework is more involved than scrap, because rework material is not written off; it is going to be corrected and then used. So handling rework inventory means handling material that is in an intermediate state: not good yet, not scrap, awaiting corrective work. The handling has to keep this material separate from genuinely good stock, so it is not mistakenly used or shipped as if it were fine, and it has to recognise the corrective work that rework involves. Rework is, in effect, additional production: it consumes effort, and possibly materials, to turn the not-good item into a good one. Handling rework properly means managing both the rework material itself and the corrective work done on it.
The cost of scrap and rework
An important part of handling scrap and rework is recognising their cost. Scrap is a loss: the material, and any work already done on it, is gone. Rework is a cost: the corrective work, and any materials it uses, is extra cost that the product would not have incurred if it had been made right the first time. Handling scrap and rework in the system, recording them properly, is what makes these costs visible. A manufacturer that records its scrap and its rework can see what they cost, and that cost is often a surprisingly large, and surprisingly reducible, number. Handling them only informally, with no record, hides the cost and removes the basis for reducing it.
From handling to reducing
The honest deeper point. Handling scrap and rework inventory properly, separating it, recording it, recognising its cost, is necessary, but it is handling a problem, not solving it. The genuinely valuable response is to reduce the scrap and rework: to ask why material is coming out not good, and to address the causes, so there is less to handle. Handling scrap and rework keeps the operation honest and the inventory clean; recording them and analysing the cost gives the data; and using that data to attack the causes is what reduces the waste over time. A manufacturer should handle scrap and rework properly and use what that reveals to make there be less of it.
The takeaway
Handling scrap and rework inventory in Odoo means, first, distinguishing scrap, material that cannot be made good, from rework, material that can be corrected. Scrap is recorded as scrap and moved to scrap locations, keeping usable inventory honest and making the cost of scrap visible. Rework material is kept separate from good stock and its corrective work managed. Recording both makes their cost visible, and that cost is the basis for the real goal: reducing scrap and rework by addressing why material comes out not good. For how we approach Odoo for manufacturers, see our manufacturing work.