Accounting for Wood Waste

      Woodworkers discuss how to estimate the waste of materials, and how it affects production and costs. April 7, 2008

Question
Another post regarding solid wood construction got me thinking about how much others estimate for waste when using solid board stock. I am a 1-1/2 man shop and I do quite a bit of furniture. I usually get rough sawn select material - mostly cherry, walnut, or white oak. When estimating, I previously figured 20-25% waste and I have recently realized I need to assume more, but I'm curious what percentage others are using?

Forum Responses
(Business and Management Forum)
From contributor J:
That depends on what you are doing and how it is measured. If I turn green wood, the waste is probably 90% by weight. Using rough sawn, kiln dried material to make furniture, if I select it myself, then maybe 20-25% is a good number. But by being frugal and making the best use of scraps, I can reduce that number a bit.



From contributor M:
When I was in trade school 25 years ago, I remember the teacher saying 30 - 40% waste on solid lumber. A piece of 4/4 is 1" thick rough. Just planing it to 3/4" you lose 25% and at least another 5% -10% by the time you straighten, plane, and rip to width. I try to keep my waste to a minimum by gluing panels and then ripping my stock from these. More time consuming, though. When I price jobs, I allow 40% waste. I thought about buying my lumber dressed, but then you can't remove cups and bows on the jointer. You have to look at the big picture to see what is better for your shop.


From contributor O:
In addition to the previous posts, I would say that it also depends on the specie and the effect you are after. For your situation, there would be, say, less waste on white oak than on cherry or walnut, especially if you are matching for color and can not use the sapwood. I generally put in 33% for waste, but I go pick my own lumber, and the trip to the lumberyard is project specific (i.e., knowing that this piece only needs one good face, that piece can be stained to eliminate sap, etc.). If you find color matching to be a problem, then maybe you can resaw thicker material, but that gets expensive and wasteful also. And let's not even think about the waste involved in radius work. Waste in solid lumber for furniture is the nature of the beast, so you have to price accordingly.


From contributor F:
I price waste at 33% in general. If I need to color match a wood or grain match, it may go as high as 60%. I always keep in mind that labor is much more costly than materials. A very difficult lesson for a person with the background of a frugal German grandfather and Jewish grandmother! I have reconciled myself to giving the good cuttoffs to Scouts, clubs, and the local school.


From contributor A:
I think your estimate of 20 - 25% is too low. You know your work habits, so you're the best estimator, but most of the folks I know use 30 - 40% waste for solid wood. It may seem wasteful, but I find worrying less about every little scrap, and working faster, is more profitable. I also used to go to the yard and try to pick out the best stock, but I found it was taking too much time. Having it selected and delivered, I find I get just as good stock (sometimes better).


From contributor L:
We use 50% as an average so order amount is net board footage required / .5 and if we think it's 40% net board footage required / .6.


From contributor C:
What a wonderful cross section of the industry we have access to. I agree with nearly every opinion and I learned a few things by just reflecting on all these details. I also vary my waste factor based on the type of use and grade of finished product and whether or not it's stained. A natural cherry large dining table would have a 100% waste factor for a perfect color and a dark stained large cherry dining table might only have 40%, but all hardwood, unless specifically purchased to a high yield size, goes at 30%.


From contributor U:
Grade of material has so much to do with waste! I've managed to find a few suppliers who will pull FAS stock to my width spec. By controlling width, I can control waste rips to a large extent. A kitchen's worth of doors where every rail/stile part is a double rip with maybe 3/4" waste from a board with few defects saves time and material. On cherry, I still run at close to 30% waste due to sap, but more color consistent species are more like 25% on average.


From contributor Y:
50% in architectural millwork typical.


From contributor P:
In Bill Norlin's book, he points out that you have:
10% waste on ripping
10% waste on end cuts
10% waste on defects
10% waste from the tally (they round up)

The lumber company may also add 10% if you buy wood that is already straight lined. Also, what about wood that is not on grade? 50% is what I use.



From contributor R:
Okay guys, good information. Now, let me ask an incredibly ignorant question (we're new to this business) but along these lines. Here's a simple scenario: you're cutting material off a 4 x 8 sheet of plywood. When costing/estimating, and you assume 40% waste factor (e.g.) and that you'll need 20 SQF of material for the project, do you price the remaining cost of that 12 SQF left over into that job, or does it become material for a future job?


From contributor U:
Unless it is an internal commodity, something you use fast enough that it doesn't accumulate, then it should be part of the overall cost of the job. Otherwise you are converting money into inventory that you may or may not use.


From contributor P:
What? For sheet goods you just charge for the sheets you need, i.e. you need 4.33, you charge for 5. The waste factor above is for solid stock.


From contributor Y:
I agree with contributor P. Job material costs in full sheets, drops have a cost in storing and retrieving that negates their savings. Not that you will throw away 1/2 sheet, but that there is a cost associated with keeping it.


From contributor T:
You have some good feedback on this question. I was wondering if you are using this information for costing or for pricing. I encourage my clients to use more a value-oriented pricing than a cost-up method. In our proposed method, you avoid becoming an hourly employee of your own business.


From contributor F:
Contributor T, I agree with you. Materials are such a small part of the cost of a job anyway...

Define value oriented:
What the market will bear?
What the customer will bear?
What you feel the end result is worth?
What your competitors are doing?
What is your "basis"?

Don't you need to know what it costs to actually make it in order to arrive at a basis? Don't get me wrong, I get paid damn well for our work, but I know what it costs us to do it first.



From contributor Y:
"Materials are such a small part of the cost of a job anyway..."

Our material costs must be a different percentage of the job than yours! Our material costs will run 25 to 30% of the invoice.



From contributor F:
New York labor and real estate market. My materials run more like 15% to 20%.

Example:
Last kitchen made:
Selling price - $72,900
All materials - $9,800
Overhead - approx $6,600
Labor - $36,850
Profit - $19,650

Almost $10k is not "small", but I tend to concentrate on optimizing the labor side of the equation more than the materials. Seems to give more return on investment.



From contributor T:
I tend to think about what the "market will bear" and what the "customer will bear" as the same thing and use them for setting a fair price. I also believe that understanding your costs is critical to comparing your list price and your cost and to see what you make. Hopefully this profit is much higher than a formula-based approach.


From contributor I:
Excellent thread! I would love to see more threads like this. This forum is a priceless resource! It took me 20 years to figure out everything this thread covered in 5 minutes. It is also reassuring to read that I am not the only one using 50% waste. I have spent countless hours trying to figure out where all the wood was going. I have even gone as far as to weigh my trash barrels and shavings as they went to the trash.


From contributor Y:
Seems the less experienced you are, the less waste you think you have. Therefore the more years you cut wood, the less efficient you become! There was a thread about this maybe a year ago, where several people maintained they had less than 20% waste. Really good! I too tried to figure out where it went. Still don't know where, but I know it does. When I first started, the lumber dealers would always bill "gross tally," meaning they delivered 7 or 8% less than what they billed for. Supposedly they all use "net tally" now. There are always at least a few boards in a unit that aren’t much good for anything.

How many of you glue for width on commercial work that requires a lot of wide (6 to 9”) moldings?



From contributor H:
Use 50% when I am making cabinet doors. I price my doors that way so that when I am making doors I can use the good wood and not have to worry about throwing away the crap.


From contributor V:
I run a one man production furniture shop. My norm in estimating scrap is 25%, but depending on the quality of raw material and the mix of product sold per year. My year end inventory has shown as little as 5% scrap for the year and this year may be as high as 40%. The last year and a half I have received a lot of not dried right red oak. I have been making a lot of small pieces to salvage as much stock as possible. Next year I will have a large sale on these items.


From contributor Y:
Sorry, but I can't buy 5% even if you don't process any lumber and just resell boards. No end trims, no edge rips, no mineral streaks, no way!


From contributor S:
Studying for my diploma in Wood Products Manufacturing Technology I was taught by all 3 instructors (combined experience of about 60 years) that 50% waste is the number to use.

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