Scrap, Yield and Weight-Based Costing in Pixel ERP Steel ERP

Most steel processors quote a yield figure from memory — "about 94% on slitting" — and cost their products on that assumption. But the real number moves with every coil, every grade and every setting, and the gap between assumed and actual yield is pure margin bleeding away unseen. Scrap gets weighed only when it is sold, off-cuts pile up uncounted, and burning loss is simply written off. The ERP, built for whole units, has no way to say that this particular lot yielded 91% while that one yielded 96%.

For a steel processing business this is the costliest blind spot of all, because costing that ignores true yield and scrap over-states margin on the bad lots and under-states it on the good ones. You cannot price, plan or improve what you cannot measure — and weight-based reality is exactly what generic ERP throws away.

Pixel ERP treats every conversion — slitting, cutting, pickling, galvanising, rolling — as a weight-balanced transaction. You issue input material by weight and record the outputs by weight: finished coils or pieces, off-cuts, end-cuts, edge trim, recoverable scrap and process loss. The system then reconciles the two sides, so the true yield of that specific job is a fact the plant produced, not a norm someone remembered.

Over time this builds a real yield history by process, by grade and by machine, so you can see that a grade runs consistently tighter, or that one line is quietly losing more than the others.

What every process job captures:

• Input weight — exact tonnage issued, linked to its heat, coil and grade.
• Good output — finished coils or pieces by weight, added back as saleable stock.
• By-products — off-cuts, end-cuts and edge trim captured as real, weighed quantities.
• Scrap and recovery — recoverable scrap booked to stock, non-recoverable loss recorded honestly.
• Process loss — burning loss and invisible loss quantified as the balancing figure, not ignored.
• Actual yield — computed per job, then trended by process, grade and machine.

For how these inputs and outputs stay tied to their source coils and heats, see our guide on managing heats, coils and grades.

Scrap is inventory, and Pixel ERP treats it that way. Recoverable scrap, off-cuts and end-cuts are booked to stock by weight and grade the moment a process generates them, so they show up in the yard figure and carry a value instead of disappearing until sale. When scrap is sold or re-melted, it moves out by weighbridge like any other material, with a GST invoice on actual weight — the same disciplined flow described in our guide on weighbridge, tonnage and GST e-invoicing.

The pay-off is twofold: your scrap sales stop leaking, and your yield numbers get honest, because scrap that is booked as stock cannot be quietly confused with process loss. You finally see how much of your "loss" is actually recoverable value sitting in the yard.

This is where yield and scrap turn into money. Pixel ERP costs per tonne and per lot, rolling up material, power, consumables, labour and overhead against the actual good output of each job. Because the good output reflects true yield, the cost per tonne of a low-yield lot rises exactly as it should, and by-product and scrap recovery is credited back — so the margin you see is the margin you made, not a theoretical one.

Landed material cost is built from the real received weight and purchase value, conversion cost is absorbed on actual processed tonnage, and scrap recovery offsets it. The outcome is a cost sheet per lot and per grade that a steel plant can actually price and negotiate from.

Weight-based costing in Pixel ERP pulls together:

• Material cost per tonne — landed cost from real received weight and purchase value, by heat and grade.
• Conversion cost — power, consumables, labour and overhead absorbed on actual processed tonnage.
• Yield adjustment — cost spread over true good output, so low-yield lots cost more, correctly.
• Scrap and by-product credit — recovery value credited back against the lot's cost.
• Cost per lot and per grade — a real cost sheet to price, quote and negotiate from.

It is the depth generic tools cannot reach, and it ships as product in the steel ERP — configured to your processes, not coded from scratch.

If you want honest yield, scrap and costing numbers, put these in place:

• Weigh inputs and outputs — capture issued weight and every output stream by weighbridge or scale, not by estimate.
• Book by-products as stock — off-cuts, end-cuts and recoverable scrap into inventory the moment they are made.
• Reconcile every job — balance input against output so process loss is a measured figure.
• Trend yield — watch actual yield by process, grade and machine to spot drift.
• Cost on actuals — absorb conversion cost on real tonnage and credit scrap recovery.
• Review margin by lot — price and negotiate from real cost per tonne, not assumptions.

Every one of these is standard behaviour in Pixel ERP, switched on and configured to your plant with no code.

Because Pixel ERP is AI-native, it does not wait for month-end to tell you a line lost money. It flags a process running below its yield norm, scrap trending up on a grade, a lot whose cost per tonne has overrun, and material whose recovery value is being left on the floor. You can also ask directly — "which process ran below yield this week?", "scrap generated by grade this month", "cost per tonne on this lot" — and act while it still matters.

That is the shift: yield, scrap and costing stop being a rear-view report and become a live control on margin, lot by lot.