How are you measuring scrap as a KPI in your warehouses?  Can you provide me with some guidance on what the results are based on how you measure it?  Trying to determine if our locations are "typical".

Hi, In simple terms you should measure Net vs Gross inventory on FG or RAW level in Warehouses depending of what purposes your warehouse acts as. S&OP measures IOS (Inactive, Surplus and Obsolete) inventory where the accountability lies with Product Management and Inventory management. When you break down the "O" as in Obsolete there's several sub-categories such as damaged inventory through Warehouse operations, Transport Damaged, Customer Damages upon receipt if your commercial contracts are constructed as such. The most important is the Supply Chain Leaders are highly involved in provisions/reserves together with finance, understand the sub-categories and does Root Cause Analysis of the key categories. In summary, KPI's: Gross vs Net inventory and changes month-on-month, Sub-Category analysis in terms of the "I", the "O" and the "S", and do A3PS for each Sub-Category to define the most important KPI's for your individual business. No KPI will every look the same for different industries and even businesses within Industries, depending on your P&L or Balance Sheets measurement. And if you're not included in either P&L or Balance Sheet dissection as an SCM professional, get in there now to define measurable KPI's. 

Can't share results, but you should measure scrap by cause, i.e., excess / obsolete vs. damaged in-transit (carrier claims) vs. damaged in handling. Attach accountability accordingly (planning for obsolescence, transportation for  damage by carriers, warehouse for damage from handling.  In my experience, the % can vary widely by industry so try and find industry peers to benchmark against