How to Set Up Manufacturing Scrap Reporting in Business Central for Food Production

Estimated reading time: 9 minutes

Every production line generates waste. The question is whether you track it as data or absorb it as a cost you never quantify.

In food manufacturing, production scrap carries extra weight. Dough trim on a bakery line, overruns on a filling machine, product that fails QC for allergen contamination, broken packaging during automated packing. Each type of scrap has a different root cause and a different cost implication. Without proper scrap tracking, yield loss is a gut feeling, not a number.

Business Central handles scrap at three levels: component consumption (Production BOM), operation output (Routing), and actual production posting (Output Journal). Setting up all three gives your plant manager scrap trends by line, your CFO the cost impact on batch profitability, and your quality team the data to drive root cause analysis.

I’ve set up scrap tracking across multiple manufacturing environments. What follows is the configuration I recommend for food production.

1. Scrap % on Production BOM Component Lines

The Scrap % field on Production BOM lines tells BC to plan for extra component consumption to account for expected material waste.

Where to find it: Search for Production BOMs, open the BOM, and look at the Scrap % column on the component lines.

How it works: When you enter a Scrap % on a component line, BC adds that percentage on top of the net requirement when you release a production order. If your BOM calls for 100 kg of flour and you set Scrap % to 5%, BC calculates expected consumption as 100 x 1.05 = 105 kg. The scrap percentage is added to the net requirement, so BC plans for 5 kg of material waste on that component line. The calculated quantity appears in the Consumption Quantity field in the production journal.

Important distinction: BOM scrap represents components consumed beyond the net requirement during production. This is input-side waste: flour that spills during weighing, sugar lost during transfer, ingredients that fall outside spec during batching.

Food production examples:

• Flour on a bakery line: 2-5% spillage and residual waste during bulk handling and weighing.
• Liquid ingredients: 1-3% loss from tank residuals and line priming.
• Packaging materials: 3-8% for automated packaging lines where setup waste and jams destroy packaging stock.

Tip: Set the Rounding Precision on your Item Card planning parameters appropriately. For expensive ingredients, Microsoft recommends setting it to 0.00001 or finer. Large rounding quantities on scrap calculations compound across hundreds of production orders.

2. Scrap Factor % and Fixed Scrap Quantity on Routing Operations

Routing-level scrap tracks output lost during processing. Where BOM scrap covers input materials, routing scrap covers finished or semi-finished output that doesn’t make it to inventory.

Where to find it: Search for Routings, open the routing, and look at the operation lines. The fields are Scrap Factor % and Fixed Scrap Quantity.

Scrap Factor % is a percentage of expected output lost during that operation. If Operation 2 has a 10% scrap factor, and you need 100 good units out of it, BC calculates that you need to start Operation 2 with approximately 111 units to account for the loss.

Fixed Scrap Quantity is a flat number of units lost regardless of batch size. This fits food production scenarios where a fixed amount of product is always lost to line setup, priming, or first-run quality checks. Whether you run 100 units or 1,000 units, you lose the same initial quantity to line startup.

Accumulated scrap: BC calculates scrap cumulatively across operations. If Operation 1 has 5% scrap and Operation 2 has 10% scrap, the total accumulated scrap is higher than 15% because each operation’s loss compounds on the previous one.

Food production examples:

• Scrap Factor %: Dough trim waste on a bakery sheeting line. A consistent percentage of dough is trimmed at the edges during shaping, typically 5-12% depending on the product geometry.
• Fixed Scrap Quantity: First-run product on a filling line. The first 20-30 units off a filling machine after changeover are typically out of spec (fill level, seal integrity, label placement) regardless of batch size.

3. Posting Scrap in the Output Journal

BOM and routing scrap are planning tools. They tell BC how much material and capacity to plan for. Actual scrap recording happens during production posting.

Where to find it: Search for Output Journal, or use the Production Journal (which combines consumption and output in a single view, accessible directly from a released production order).

Key fields:

• Scrapped Quantity: The number of units your team scrapped during this operation. This does NOT increase the output quantity. If you produce 95 good units and scrap 5, your output quantity is 95 and your scrapped quantity is 5.
• Scrap Code: A code that categorizes why the scrap occurred. This is the field that makes scrap data actionable.

How to post: Open the Output Journal, enter the production order number, use the Explode Routing action to populate the operation lines, then fill in the Quantity (good output), Scrapped Quantity, and Scrap Code for each operation. Choose Post.

When you post, BC updates the Capacity Ledger Entries with both the good output and scrap information. This feeds into costing, production order statistics, and reporting.

The Production Journal from within the released production order combines consumption and output posting in one view. Many food manufacturers prefer this because they can see component consumption and output (including scrap) side by side for the same production order.

4. Expected vs. Actual Scrap

BC tracks both dimensions.

Expected scrap comes from your BOM Scrap % and Routing Scrap Factor %/Fixed Scrap Quantity settings. When you create and refresh a production order, BC calculates the expected scrap quantity for each component and operation.

Actual scrap comes from what your operators post in the Output Journal (the Scrapped Quantity field).

The Production Order Statistics page (accessible from the production order via Statistics) shows expected versus actual costs broken down by material, capacity, subcontracting, and overhead. The cost deviation between expected and actual reveals the financial impact of scrap. A consistent cost overrun in material categories often points to scrap percentages that need recalibrating.

For a direct comparison of expected scrap quantity versus actual scrap quantity by item, the Power BI Production Scrap report (covered in section 6) is the more precise tool. It includes a dedicated “Scrap Quantity vs. Expected Scrap Quantity by Source No.” visual built for exactly this analysis.

5. Scrap Codes: Categorizing Why Waste Happens

Knowing that you scrapped 50 kg is informative. Knowing that 30 kg went to allergen contamination, 15 kg to equipment failure, and 5 kg to ingredient defects gives your quality team something to act on.

BC supports Scrap Codes in the Output Journal. Each scrap entry carries a code that categorizes the reason.

Setting up Scrap Codes: Search for Scrap Codes in BC. Create codes that match your food production scrap categories. Recommended codes for food plants:

When operators post scrap in the Output Journal, they select the appropriate Scrap Code. This data accumulates over time and feeds directly into scrap analysis reporting.

6. Reporting: Analysing Scrap Data

BC provides scrap analysis through the built-in Power BI Manufacturing app, available from BC 2024 release wave 2 (version 26+).

The Production Scrap report (Page 37055) includes:

• Production Order Scrap %: Relationship between finished quantity and scrap quantity per order.
• Scrap Quantity Over Time: Trend chart showing how scrap levels change over weeks or months. Useful for spotting the impact of process changes, new suppliers, or equipment maintenance.
• Scrap % by Production Order: Compare scrap rates across orders to identify outliers.
• Scrap Quantity by Scrap Code: See which scrap categories drive the most waste. If ALLERGEN codes spike after a new product launch, that tells your quality team exactly where to focus.
• Scrap Quantity vs. Expected Scrap Quantity by Source No.: Compare planned scrap against actual scrap by item. Persistent overages mean your BOM and routing scrap settings need updating.
• Work Center Scrap % and Machine Center Scrap %: Track which production facilities generate the most waste.

The report pulls from the Capacity Ledger Entry, Production Order, Machine Center, and Work Center tables.

The Detailed Calculation report (Report 99000756) also accounts for scrap costs in its cost breakdown, showing material, capacity, and overhead costs including scrap. Use this for standard cost analysis at the item level.

For food manufacturers who need scrap analysis beyond what the Power BI report offers (scrap by allergen type, by shift, or by supplier lot), the underlying data in the Capacity Ledger Entry table is available for custom Power BI reports or AL-based reporting.

Putting It All Together

Set up scrap at all three levels:

1. BOM level: Set Scrap % on every component line where material waste is predictable. Start with conservative estimates and refine based on actual posting data.
2. Routing level: Set Scrap Factor % on operations where output loss is proportional to batch size, and Fixed Scrap Quantity where loss is constant regardless of volume.
3. Production posting: Train operators to enter Scrapped Quantity and Scrap Code on every output posting. No code, no posting. This is the discipline that turns scrap tracking from a box-checking exercise into actionable manufacturing intelligence.

The payoff: your planning accounts for realistic waste, your costing reflects actual production costs, and your quality team has the data to drive continuous improvement.

What scrap percentage do you typically see on food production BOMs? I have seen anywhere from 2% on simple packaging lines to 15% on multi-allergen bakery changeover runs. The range is wider than most people expect.

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