WASTE MANAGEMENT Following aspects are covered under waste management.

Waste ControlScrap ControlSpoilage ControlControl of DefectivesWaste Control :- Waste is a material loss during production or storage due toevaporation, chemical reaction, unrecoverable residue, shrinkage etc.Wastage may be visible at times or invisible. It may be a normal wasteincidental to manufacturing activities or abnormal waste which is in excessover the normal and invites a corrective action. Control on waste can beexercised achieved in the following aspects. Quantity Control :- It involves maintenance of detailed records of quantities with an object to detect shrinkage, breakage, loss etc.Establishment of output ratios are much helpful in framing strategies for waste control. Normal allowances of waste can be fixed with technicalassessment and past experience along with due consideration to thespecial features of material and processes. A systematic procedure for feedback of achievements against standards laid down for wastage will improve the quality control aspect of the production. Study of thecauses of abnormal wastage helps in fixing the responsibility. Better material handling systems will also help control of waste. Quality Control:Wastage may also occur from loss of control on processor poor quality of material. Fixing the responsibilities for purchase, stores,production and maintenance departments to ensure achievement onstandards will provide a strategic advantage.Scrap Control :- Scrap control is the residue material that has a recovery value.It is incidental residue from the materials used in manufacturing operationswhich is recoverable and measurable without processing. For control purposescrap may be classified into the following: Legitimate Scrap:Predetermined or anticipated in advance due to experiencein manufacturing operations. Administrative Scrap:Results from administrative decision e.g. change indesign or withdrawal from saleable lots or for some other reasons. Defective Scrap:Resulting from poor quality of raw material, negligienthandling of material etc. Scrap can be controlled in the following ways:Material specification at the product design stage.Selection of right material and equipment.Selection of right type of personnel with proper training andexperience.Determination of acceptable limits of scrap.Reporting the source of waste, quantum of waste.Specific areas of responsibility.Spoilage Control:- Spoilage is the production that fails to meet quality or dimensional requirements and these are so damaged inmanufacturing operations that they are not capable of rectificationeconomically and hence taken out of the process and disposed off without further processing. If spoilage is well within the limits, it isregarded as normal spoilage. The limits of spoilage are laid downafter thorough study of material, men, processing and operatingconditions. If spoilage exceeds the normal limits, it is required to takeprompt action.

Control of spoilage can be achieved in the following ways. Control through predetermined standards.Control through fixation of individual responsibility.Prompt & systematic reporting of spoilage.Defectives Control :- Defectives represent the part of production that does notmeet dimensional or quality specifications of a product but which can bereworked by additional application of material , labour and processing andmade into saleable condition either on first or seconds depending oncharacteristics of the product. Causes:Poor quality of materialLack of skill or trainingInadequate supervisionDamage in material handlingDefective or improper tooling and equipmentDeficiencies in product designInadequate inspection Defective work can be classified into the following Defective in the raw material stageDefective after some stage of processing after spending some labour & overhead.Defective finished goods due to storage for too long time.Defective finished goods returned by purchaser, not being upto specification or sample.For control of defective requires a basis for evaluation of performance. Standards may befixed for occurrence of defective work, giving proper weightage to different conditionsi.e. nature of material used, workmanship required etc. Accounting Treatment of Waste :Normal wastage is regarded as part of the production cost and distributed over goodunits.Cost of abnormal wastage is excluded from total cost and charged to costing profit &loss account.Any value realised from the waste is credited to process account. Accounting of Scrap :- If value of scrap is negligible, the good unitsshould bear the cost of scrap and any income realised will be treatedas other income.When the value of scrap is considerable and identifiable with theprocess or job, the cost of the scrap will be transferred to scrapaccount and any realisation from sale of such scrap will be credited tothe job or process account and any unrecovered balance in the scrapaccount will be transferred to costing profit & loss account.If the scrap value is significant and it cannot be identified with particular job or process, then the net sales realisation after deducting the sellingcost is transferred to either material or factory overhead account. Thiswill have an effect in reducing the factory cost. Accounting of Spoilage :- If the cost of spoilage is normal and inherentin the process or operation, then the cost is charged to the specificorder or treated as production overheads.Cost of abnormal spoilage is charged to costing P&L a/c .If spoilt units are reused as raw materials in the same process, noseparate accounting is required. If spoilage is used for any other process or job, a proper credit should be given to relevant processaccount or job account. Accounting of Defectives :- If defectives are normal & within thestandard limit any of the following methods are followed --i ) C o s t o f r e c t i f i c a t i o n o f n o r m a l d e f e c t i v e s i s c h a r g e d t o good units.ii)If the department is identifiable, the rework c o s t s a r e c h a r g e d t o that department.i i i ) I f t h e d e f e c t i s n o t i d e n t i f i a b l e t o t h e p a r t i c u l a r d e p a r t m e n t , t h e rework costs are treated as general overheads.If normal defectives are easily identifiable with specific jobs, therework costs are charged to that job.Abnormal defectives costs are charged to the costing P&L a/c. http://www.scribd.com/doc/24495252/Strategic-Cost-Management