ISO 9001 Scrap and Nonconforming Product Requirements (Clause 8.7)

Clause 8.7 — Control of Nonconforming Outputs

Clause 8.7 is the section of ISO 9001:2015 that directly governs how manufacturers must identify, control, and document nonconforming product — including scrap, rework, and concessions. It is the clause most frequently cited in audit findings for manufacturers with informal or spreadsheet-based quality systems.

What Clause 8.7 Requires

For every nonconforming output, the standard requires documented evidence of:

• Description of the nonconformity: What the defect was — not just "scrap" but a specific defect type (dimensional rejection, surface defect, weld crack). This is why reason codes are essential.
• Disposition taken: What happened to the nonconforming part: scrapped, reworked, released under concession, or returned to supplier. Each of these represents a distinct disposition and should be recorded accordingly.
• Authorization: The name or role of the person who authorized the disposition. For scrap, this is typically the operator, line lead, or quality technician — but it must be documented, not assumed.
• Segregation evidence: Auditors expect evidence that nonconforming parts could not accidentally enter the good-product stream. Physical red bins, quarantine areas, or system holds all satisfy this — but some form of control must be documented.

What Auditors Typically Ask

During a Clause 8.7 walkthrough, auditors commonly ask:

The most common Clause 8.7 findings are: no documented reason codes (only a scrap count), missing disposition records, and no identifiable authorizing person for scrapped parts. Pareto Base captures all three fields for every logged scrap event.

Clause 9.1.1 — Monitoring and Measurement (Trend Data)

Clause 9.1.1 requires organizations to evaluate the performance and effectiveness of the quality management system. For scrap, this translates into a trend analysis requirement — auditors expect to see scrap rate data over time (typically monthly for at least six months), not just a point-in-time count.

The trend chart serves two audit purposes: it demonstrates that the organization is monitoring quality performance over time (the basic 9.1.1 requirement), and it provides the evidence base for Clause 10.2 corrective action — if scrap is trending upward and no corrective action has been opened, an auditor may cite both clauses.

Clause 10.2 — Corrective Action and Root Cause Verification

Clause 10.2 requires that when a nonconformity occurs — or recurs — the organization takes corrective action proportional to the severity, including root cause analysis and effectiveness verification. For scrap, this means recurring defect types (those appearing repeatedly in the Clause 8.7 log) must eventually have a documented corrective action record.

Auditors do not expect a corrective action for every single scrap event — that would be unworkable. They do expect corrective actions for the significant recurring contributors, identifiable via Pareto analysis. A shop with dimensional rejections as their consistent top defect that has never opened a corrective action on that defect type will likely receive a finding.

What a Compliant Corrective Action Record Contains

• Description of the nonconformity (consistent with the Clause 8.7 scrap log entry)
• Root cause investigation methodology (5-Why, fishbone/Ishikawa, or other structured method)
• Root cause conclusion — the fundamental cause, not the symptom
• Corrective action taken — specific process change, tooling adjustment, training, or other intervention
• Implementation date
• Effectiveness verification — data showing the defect rate after the corrective action compared to baseline

The effectiveness verification step is where many corrective action records fail audit scrutiny. Documenting what you did is not sufficient — you must show data proving it worked. A before-and-after scrap rate comparison for the targeted defect type, tracked over at least four weeks post-implementation, satisfies this requirement. Pareto Base Campaign Management generates this comparison automatically.

IATF 16949 Additional Requirements

IATF 16949:2016 (the automotive quality management standard) adds several requirements on top of ISO 9001 that are relevant to scrap tracking. Manufacturers supplying automotive Tier 1 or OEM customers should be aware of these additional obligations.

What Pareto Base Generates Automatically vs. What Needs Other Systems

Pareto Base is purpose-built around the scrap and nonconforming product requirements in ISO 9001. The table below maps each requirement to what Pareto Base handles automatically versus what requires a separate system or manual process.

6-Week Audit Prep Checklist

Use this checklist if you have an ISO 9001 audit scheduled and are not confident your scrap records will satisfy Clauses 8.7, 9.1.1, and 10.2.