Difference Between Scrap and Salvage

“I do not mind the difference of opinion. I do mind hate.” ― Unknown

Introduction

In India, when a student purchases a book to study, once the student graduates to the next class, the same book is used by their younger siblings. Once they use it and it cannot be further used in the family, it is sold to the bookseller. The bookseller again sells the same book to someone who cannot afford the new book. After the book is used, it is sold to the ragpicker. From the ragpicker, it goes back to the roadside shops, which use the pages of the book to serve any food product. After that, the pages go back for recycling.

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Content: Scrap / Salvage

What is Scrap
What is Salvage
What is the key difference
Conclusion

Objective

In the manufacturing industry, both scrap and salvage are an integral part of the disposition process. When any component or product does not meet the requirement of the customer/organization, it is either scrapped or salvaged where possible.

Once you read this blog, you will understand, what is Scrap, what is Salvage, what is purpose of it and what are the key differences.

Definition: ISO 9000: 2015

Regrade (Cl 3.12.4): Alteration of the grade of a nonconforming product or service in order to make it conform to the requirements differing from the initial requirements

Scrap (Cl 3.12.10): Action on a non-conforming product or service to preclude its originally intended use.

Detailed Information

The disposition of non-conforming products is the most pertinent process in a manufacturing industry. From the first production process to the last – due to job set-up, in-process inspection, final PDI (Pre-Despatch Inspection), laboratory testing and third-party inspection; the non-conforming product can be produced/identified in any process. Based on the decision by the competent authority, the non-conforming product can be scrapped or salvaged.

For Example, A salvage vehicle has the potential to be repaired and return to the road and go on to be bought and sold, whereas a scrap vehicle cannot. It has reached its potential and will be crushed and sold for materials.

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What is Scrap?

When a non-conforming product cannot be used in any way, to ensure that it is not mixed with a good quality product or it cannot be misused, the non-conforming product is rendered as non-usable by cutting, breaking into pieces or identifying with red paint.

Example:

A Semi-conductor chip cannot be repaired/reworked and is scraped
A fused bulb cannot be corrected and is scraped
The fungus-infected pastry is not good for the stomach and is scraped
When a vehicle is damaged beyond repair or has reached the end of its life, ultimately there is nothing worth saving. It will be taken off the market and out of circulation and will go on to be broken down and crushed, it will then be sold based on the weight of the materials.

What is Salvage?

When a non-conforming product is identified and it cannot be despatched to the customer in its present condition, to minimize the losses, the product can be salvaged by doing repair, rework, segregation and regrading.

Example:

When a finished headlamp is rejected due to fitment issues, the different components and subassemblies can be salvaged like bulbs, wiring harnesses, clips, coupler etc.
When a painted component is rejected due to variation in painting thickness, the painted components can be salvaged by segregating low-thickness painted components or by removing the paint and repainting it.
In the steel mill, when a particular Heat (melted steel) cannot meet the specification of the customer, it can be salvaged by either degrading it for low-end purposes or the Heat can be shifted to another customer whose specification can be met.
When vehicles still have some value but may not be economical to repair. It means that the vehicle has been damaged in some way, either in an accident or over time which has made fixing the car cost more than the vehicle is worth. At this point, the owner of the car could decide that the car is not cost-effective to repair and would be looking to sell it as salvage (Components that are in could condition can be sold).

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What are the Key Differences?

Although the terminology of scrap and salvage is quite similar, still there are a few differences between them.

S.No.	Scrap	Salvage
1	Something which cannot be used at any cost	Something which can be used but not in its original form
2	Example: Accidental Car	Example: Different components of cars which can be reused like Tyres, Steering, Seats, Lights, Engine, Battery
3	Low returns	Reasonable returns
4	Not meeting the customer/organization specification	Although not meeting the specification but still it can be partially reused with a concession
5	The decision is taken by the top management only	The decision can be taken in consultation with the customer

Conclusion

Both scrap and salvage are losses for the organization. The priority for the company is to produce good quality products only. When a non-conforming product is produced, judiciously a decision has to be taken to either scrap it or salvage it as much as possible.

References:

ISO 9001: 2015

ISO 9002: 2016

ISO 9004: 2018

IATF 16949: 2016

Industry Experts

This is the 188^th article of this Quality Management series. Every weekend, you will find useful information that will make your Management System journey Productive. Please share it with your colleagues too.

In the words of Albert Einstein, “The important thing is never to stop questioning.” I invite you to ask anything about the above subject. Questions and answers are the lifeblood of learning, and we are all learning. I will answer all questions to the best of my ability and promise to keep personal information confidential.

Your genuine feedback and response are extremely valuable. Please suggest topics for the coming weeks.

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Difference Between Scrap and Salvage

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