Meaning
Accounting methodology that determines the cost of wasted materials during the battery manufacturing process. Production yield scrap calculation is used by sourcing teams to evaluate the efficiency of a supplier’s factory floor. The calculation directly impacts the contract price of the finished battery cells.
Economic Impact
High scrap rates during electrode coating or cell assembly increase the total cost of materials per usable cell. This waste must be factored into the per-kilowatt-hour pricing of the purchasing contract. Sourcing agreements often include shared-savings clauses that incentivize suppliers to improve their manufacturing yield.
Sourcing Evaluation
Procurement teams analyze the scrap rates at each stage of production to identify areas of high waste. These stages include slurry mixing, electrode coating, cell winding, and formation testing. A high coating scrap rate indicates poor process control and suggests a high risk of quality issues in the finished cells.
Continuous Improvement
Tracking this metric over time allows sourcing and quality teams to monitor the supplier’s process maturity. When scrap rates drop, the manufacturer can reduce their material purchase volumes and pass the savings on to the buyer. This collaborative approach aligns the interests of both parties toward lean manufacturing.
It also helps to ensure a steady supply of components by reducing production bottlenecks.
