Obsolete,

Surplus and
Scrap
Management
Presented By:- Sakshi Labde

Roll no. 26
Definition
Obsolete Surplus Scrap
Items no longer in use or Excess inventory beyond what is Discarded materials, often
needed, often due to required for current or projected recyclable, that have reached
technological advancements or needs. the end of their useful life.
changes in demand.
Need for Scrap Yard
Meaning of Scrap Yard: A scrap yard is a place where discarded materials, like metals and appliances, are collected
and processed for recycling.

1 Recycling 2 Waste Management

Enables reuse of materials, reducing the need for Provides a responsible disposal method for
new resources. unwanted items.

3 Environmental Conservation 4 Economic Value

Reduces landfill waste and pollution. Creates jobs and offers cash for scrap materials.

5 Resource Recovery 6 Space Efficiency

Recovers valuable materials for the manufacturing Helps businesses clear out excess inventory.
process.
Identification and control
Identification Categorization Control Measures

Conduct regular inventory audits. Define categories: obsolete, Employ inventory management
surplus, scrap. software.
Analyze product lifecycles.
Use tagging systems for easy Schedule routine inventory reviews.
Track usage metrics for low-
identification.
turnover items.

Disposition Strategies Documentation and Reporting Continuous Improvement

Sell or donate surplus items. Maintain records of categorizations Gather employee feedback on
Partner with recycling firms for and actions. Create performance inventory practices. Conduct
scrap. Implement secure reports on inventory costs. training on efficient inventory
destruction for sensitive materials. management.
Categorization of obsolete/ surplus
By Product Lifecycle Stage

1. Introduction Stage: New items that are not performing well in the market.

2. Growth Stage: Items that peaked but are now declining; potential for surplus.

3. Maturity Stage: Stable products that may be becoming obsolete.

4. Decline Stage: Products that are discontinued or no longer produced, often leading to surplus.

By Demand and Usage

1. High Demand, Low Stock: Items that are still in demand but need replenishment.

2. High Demand, Excess Stock: Items in demand but overstocked.

3. Low Demand, Surplus: Items that have not sold as expected and are in surplus.

4. Obsolete and Unused: Items no longer in demand and taking up space.

By Condition

1. New and Unused: Items that are still in original packaging but are obsolete or surplus.

2. Used but Functional: Items that have been used but can still serve a purpose.

3. Damaged or Defective: Items that are not in sellable condition and need to be scrapped.

By Technology and Market Relevance

1. Legacy Technology: Items that are outdated and no longer relevant.

2. Current Technology: Items still relevant but have excess stock due to overproduction or lack of sales.

By Regulatory Compliance

1. Regulatory Surplus: Items that are excess due to regulatory changes but are still compliant.

2. Non-Compliant Obsolete: Items that are obsolete due to regulatory changes and cannot be sold.

By Disposal Potential

1. Recyclable: Items that can be processed for materials.

Control of scrap/ obsolescence
Inventory Assessment
Regularly evaluate stock to identify obsolete items.

Documentation
Maintain records of items designated as scrap or obsolete.

Recycling Programs
Implement initiatives to recycle or repurpose obsolete materials.

Disposal Procedures
Establish clear protocols for safe and compliant disposal of scrap.

Market Evaluation
Monitor market trends to preemptively identify potential obsolescence.

Stakeholder Communication
Keep all relevant parties informed about scrap management strategies.

Continuous Improvement
Regularly review and enhance scrap management processes.
Responsibility for disposal

Inventory Manager Procurement Officer Compliance Officer

Oversees assessment and Ensures adherence to disposal Monitors adherence to
classification of obsolete and surplus policies during purchasing practices. environmental and safety
items. regulations for disposal.

Warehouse Staff Sustainability Finance Department Upper Management

Coordinator
Responsible for handling Analyzes financial Sets policies and
and organizing scrap and Develops and implements implications of disposal strategies governing
surplus materials. recycling and waste methods and surplus overall waste and scrap
reduction programs. liquidation. management.
1
.

9 Stakeholder Communication
Inform relevant departments and stakeholders about the disposal process and outcomes. Update organizational policies and procedures based on findings and best practices.
Procedures for disposal of scrap/
obsolete/ surplus
Assessment and Classification:-Conduct an inventory
assessment to identify scrap, obsolete, and surplus items.
Classify items based on condition, usability, and compliance
with disposal regulations

Environmental Compliance:-Submit a disposal request to

management or the designated review committee. Obtain
necessary approvals before proceeding with any disposal
actions.

Documentation:- Prepare a detailed list of items approved

for disposal, including quantities and descriptions. Maintain
records of all disposal requests, approvals, and decisions.

Selection of Disposal Method:-Evaluate suitable disposal

methods (e.g., recycling, donation, sale, or landfill). Ensure
chosen methods comply with environmental regulations and
organizational policies.
Procedures for disposal of scrap/
obsolete/Execution
surplus of Disposal:-Organize logistics for disposal
(e.g., transportation, collection). Ensure items are securely
handled and transported to the designated disposal facility.

Approval Process:-Verify that the disposal method meets

local environmental and safety regulations. Obtain
documentation from disposal or recycling facilities as proof of
proper handling.

Record Maintenance:- Maintain disposal logs that include

dates, quantities, and methods used. Store all relevant
documents for audit purposes and future reference.

Review and Audit:-Periodically review disposal

processes for effectiveness and compliance. Conduct
audits to ensure adherence to procedures and identify
areas for improvement.
documentation for disposal of scrap/ obsolete/ surplus
Disposal Request Form A formal document submitted to management, detailing the items to be disposed of.

Inventory List A detailed inventory of all scrap, obsolete, and surplus items.

Approval Records Documentation of approvals from management or the designated committee.

Disposal Method Evaluation A report evaluating different disposal methods (e.g., recycling, donation, sale) with justifications for the
selected method.

Environmental Compliance Certificates Documentation from disposal or recycling facilities confirming compliance with local environmental
regulations.

Transportation and Handling Records Records related to the transportation of items to disposal or recycling facilities, including dates, vehicle
information, and handling procedures.

Disposal Logs Logs documenting the date of disposal, quantities disposed of, and the method used (e.g., recycling, landfill).

Proof of Disposal Receipts or certificates from the disposal facility, confirming the proper disposal of the items.

Communication Records Emails or memos related to the disposal process, including notifications sent to relevant stakeholders.

Audit Documentation Records of any audits conducted on the disposal process, findings, and recommendations for improvements.