In today’s competitive manufacturing environment, cost control and margin optimization are more critical than ever. As raw material costs rise and supply chains evolve, manufacturers are turning to new strategies to bolster profitability—one of which is smarter scrap management. With the 2025 updates to Odoo’s Manufacturing Resource Planning (MRP) module, manufacturers now have powerful tools to accurately track and reuse scrap material, turning what was once waste into a source of value.
In this guide, we’ll walk you through how to track, manage, and reintegrate scrap materials into your production process using Odoo. Business owners and operational leaders will discover how to set up scrap flows, track usable returns, and use Odoo’s MRP capabilities to enhance visibility and ultimately improve manufacturing margins.
Manufacturing scrap refers to leftover, excess, or defective material that is not part of the final product. There are two main categories of scrap:
Recognizing and categorizing scrap correctly can lead to significant cost savings, more accurate inventory management, and improved environmental sustainability—all of which are now supported in Odoo’s 2025 system updates.
Scrap is often viewed as a sunk cost. However, if tracked and reused effectively, it can become a hidden asset. According to recent industry trends in 2025, companies implementing closed-loop manufacturing—where scrap is continuously reused—have seen margin improvement of 3% to 7% annually.
Efficient scrap management in Odoo allows businesses to:
With the 2025 Odoo enhancements, tracking and reusing scrap is more streamlined than ever. Here’s how to get started:
These locations allow you to segment, measure, and assess your scrap—increasing transparency and traceability.
This ensures Odoo will automatically account for expected scrap during production orders—giving you more accurate cost tracking and planning.
During the production process, operators can record scrap in real-time. Using a tablet-friendly interface or barcode scanners, shop floor teams can:
Odoo’s 2025 UI improvements make this faster and easier through the Work Orders interface.
Once scrap is tracked, reusing it becomes the next lever for saving costs.
Odoo allows two approaches based on your production workflow:
Usable scrap can be reprocessed through a Rework Order, which is a type of manufacturing order focused on bringing defective or excess products back to usable condition.
This allows full traceability and cost logging.
When reusing scrap, it’s vital to ensure your accounting reflects the value recovery.
Odoo will handle the updates automatically once defined, improving real-time margin visibility.
With the 2025 release, Odoo introduces more powerful reporting tools leveraging its integration with Odoo Spreadsheet and Studio Apps. Use these to uncover inefficiencies and optimize production:
By building these insights into your weekly or monthly operational reviews, your team can identify recurring scrap patterns and implement corrective actions.
Sustainability is no longer just a buzzword—it’s a metric investors, customers, and regulators are tracking closely. In 2025, more governments have implemented environmental compliance for industrial waste, including digital reporting mandates.
Odoo supports digital traceability for waste flows, allowing manufacturers to stay compliant while also leveraging scrap data in ESG (Environmental, Social & Governance) reporting.
Additionally, more manufacturers are listing their sustainability metrics in sales proposals. Showing reduced scrap and closed-loop reuse not only improves your bottom line—it can help you win more deals.
By effectively tracking and reusing manufacturing scrap in Odoo, companies can drive substantial improvements in margins and sustainability. With modern tools available in the Odoo 2025 platform, turning waste into value is no longer a logistical headache or cost burden.
If you haven’t yet optimized your scrap management strategy—or if your current ERP doesn’t support seamless scrap integration—it’s time to explore how Odoo can transform your operations.
Want to learn more about customizing Odoo for your specific manufacturing workflows?
Let’s connect—schedule a free consultation with our Odoo experts today, and discover how smarter scrap handling can improve your margins.
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