Material flowing into and out of a scrapyard is the heartbeat of a recycling business. An indicator of how successful that business will be is how it manages this inventory.

The development of technology and analytics over the past several years has demonstrated that innovative scrap metal inventory management software can boost return on investment (ROI) for recyclers.

Why Scrap Metal Inventory Management impacts ROI

ROI is an important performance measurement used to evaluate profitability. The simple ratio divides the net profit of an investment by its cost. For scrap metal recyclers, having available, up-to-the-minute, organized data about the cost of material is a vital part of the ROI formula. Net profit is impacted by getting the most for your inventory, aided by a bird’s-eye-view of what material you have, location, and stage of processing. 

The big-picture analytics and data provided by scrap metal inventory management software gives business owners the information they need to increase profitability. This is because, for most recyclers, scrap streams in from various sources, sometimes into different yards, and is processed and stored in multiple stages and grades of material. Once it is processed, it is transported out again to a variety of consumers, sometimes from different yards and as other products. Understanding the inflow and outflow of this inventory is one of the most significant components of success in the scrap metal recycling business. 

Why Inventory Management Software is More Important Today

“In today’s business climate, there are many factors a recycling business can’t control. They can’t control government regulations, state and local laws, the status of the overall economy, or global trade rules,” says Joe Floam, president of ScrapWare Corporation, which has provided robust inventory management software to recyclers for over 30 years.   “What they can control is an understanding of their inventory and how they can manage it to increase profitability. That is why inventory control today is probably more important than ever before in the recycling industry.” 

How to Choose the Right Inventory Management Software

Using the right software is critical to maximizing the potential of inventory management. Because of the nature of scrap metal recycling, having an industry-specific software solution is vital. Software written and developed specifically for scrap metal recyclers will be better able to handle the complicated nature of material flow compared to an off-the-shelf inventory system.

The right scrap metal recycling software should help coordination among multiple yards with multiple employees involved in buying and selling material. It must allow the business to know what material it has on hand, at what scrap yard location, and at any given time. It must tell scrap metal recyclers the value or price of the material, given its stage in processing and what is available for sale, what has been sold, or what has already been shipped.   Having mastery of this information unlocks profitability for scrap metal recycling businesses.

Additionally, good inventory management software eliminates labor-intensive manual recordkeeping, which is also subject to human error. Accurate inventory records can help a business avoid costly mistakes and can help turn over inventory faster, allowing for more profitability.

Among other things, ScrapWare software allows users to set up, maintain and manage inventory in three user-friendly ways:

  • Regrade — The Regrade function enables users to document the processing or grading of material into different segregated commodities. The Regrade function can also be used to move weights and/or costs from one material category to another.
  • Transfer — The Transfer function allows the user to move bulk material or finished goods between scrap yards or from one division to another within the same yard. This can be done with or without cost information, depending on the needs of the business.
  • Finished Goods – The Finished Goods function enables users to document the conversion of processed material into a packaged form such as bales, boxes or drums, etc. In addition, users can interface this system with the ScrapWare software Sales module to remove Finished Goods from inventory after a shipment.

The ScrapWare Inventory module allows you to take control of your recycling inventory because it can:

  • Print and scan barcode tags for finished goods inventory.
  • Define commodity categories, classes, and subclasses for all your material.
  • Track average pricing based on a perpetual weighted moving average cost.
  • Modify the perpetual weighted average cost.
  • Accurately enter data guided by a color-coded user interface, extensive pop-up menus, and field validation, making data entry simple and user-friendly.
  • Seamlessly integrate with other ScrapWare modules, such as Sales, for even greater efficiencies.       

The Value of Scrap Metal Inventory Management Reports

One of the most important functions of inventory management software is its ability to generate detailed, informative reports. A good software solution should be able to generate reports that provide the most accurate picture of inventory volumes and costs, regrades of material, transfers between yards and within yards, and finished goods.

What makes ScrapWare software distinctive is its ability to adapt to the needs of its customers. Not only are a variety of reports available with ScrapWare software, but new types of reports are regularly created to respond to customer needs in the marketplace. For example, ScrapWare will develop a new type of report, update the software, and make the latest version available to all customers via an automatic overnight installation.

This is critical, says Floam, because “scrap metal recycling is an inventory-based business. ScrapWare software is designed to give our customers all the vital information they need, in the format they need.”

ScrapWare software’s built-in reports include:

  • Summary Transfers
  • Detail Transfers
  • Transfer Activity
  • Detail Regrades
  • Detail Invoicing
  • Summary Finished Goods
  • Detail Finished Goods
  • Inventory Valuation
  • Overall Inventory Position
  • Work-In-Progress Valuation

Inventory Management Software Support Can’t Be Overlooked

A scrap metal inventory management software can have many reports that accommodate a number of users and yards. Still, it will only boost ROI if it works and employees can use it well. This is where the critical function of technical support comes into play. Any good inventory software solution must be backed up with state-of-the-art, premier tech support. Floam added, “In newly mobile, cloud-based interfaces, users must have access to 24/7 technical support, available without appointment via text, email, or phone. The software can only help your business if it works for you.”

If you have questions about how to get the most ROI out of your Inventory Management System or if you’d like to learn more about how ScrapWare can add value, contact us online or call 301-517-8500.


About ScrapWare Corporation: Since 1989, Rockville, Maryland-based ScrapWare Corporation has been the software of choice for the recycling industry. Its ease of installation and simplicity saves users time and money, while helping them achieve compliance and maintain accurate business insights. With state-of-the-art functionality that‘s tailored to each organization’s unique requirements, ScrapWare is an advanced dynamic software solution that alleviates the most pressing recycling industry worries. For more information, please call (301) 517-8500 or visit https://www.scrapware.com/.