In section efficiency we propose a method with which to monitor the efficiency of TIME through the TEEP measurement (= total effective equipment productivity).

We propose a similar approach to monitor MATERIAL efficiency through a KPI which we call TEMP (= total effective material productivity). The concept of scrap within the material efficiency is comparable to the concept of downtime in the equipment efficiency.

The typical bill of material (=BOM) contains allowances (for scrap, inventory discrepancies, contingencies, etc.) in order to avoid stock outs on purchased goods. With profit margins below 5 % of sales and material contents of more than 50 % and with the pressure to implement a circular economy the reduction of scrap is now a significant challenge for companies. Monitoring TEMP is vital as it surfaces your material flows and directly impacts throughput and hence the financial health of the business.


Tracking of TEMP is tricky - it heavily relies on data accuracy, discipline in handling of materials, controlled inventory transactions and proper backflushing in the ERP system.

Reuse of scrapped material such as

  • regrinding of sprues in moulding or
  • (precious) metal resale in stamping

requires a more sophisticated treatment in the BOM and in the backflushing/inventory transaction processes of the ERP system.

We will be glad to assist you in setting up the necessary tools and action plans to improve your material utilization.