Steel & fabrication guide · Updated October 2026
Heat Number Tracking and Offcut Costing in Steel Fabrication (2026)
A heat number identifies the batch of steel a plate, section or pipe was made from, and links it to its mill test certificate. Tracking it from receipt to dispatch lets you prove material quality for every job. Costing offcuts and scrap against the same job shows the real material cost — often well above the purchase rate.
Who it is for: This guide is for owners, production heads and cost accountants at Indian steel fabricators and processors with roughly ₹10–500 crore annual turnover.
Disclosure: Bsquare Solutions makes Pothera ERP, one of the options this guide discusses. We compare categories of ERP, not named vendors, and we say plainly where Pothera ERP is not the right fit.
Built by Bsquare Solutions Pvt. Ltd., Noida · part of The Nambiar Group · 25 years in business · 1,000+ manufacturing and trading clients.
Bsquare’s take
“Every fabricator says offcuts are reused. Very few can say which heat an offcut came from, what it is worth, or which job it went into next. That gap is where traceability fails audits and where margins quietly leak.”
What a heat number is — and why customers ask for it
| Term | Meaning |
|---|---|
| Heat | One melt of steel in the mill’s furnace; every product made from it shares its chemistry |
| Heat number | The identifier stamped or stencilled on the plate, section, pipe or flange and printed on its certificate |
| Mill test certificate (MTC) | The mill’s document showing chemical composition and mechanical test results for the heat |
| Heat-number traceability | Being able to show which heat every part of a finished job came from |
| Heat transfer (marking transfer) | Re-marking the heat number on cut pieces and offcuts so traceability survives cutting |
How to track heat numbers from receipt to dispatch
- ReceiveRecord heat number, grade, size, weight and MTC against each plate or bundle at the gate.
- StoreKeep stock by heat and location — not just by size and grade.
- IssueIssue material to a work order by heat; record which heats went into which job.
- CutTransfer the heat mark to cut parts and usable offcuts; return offcuts to stock under the same heat.
- Inspect and dispatchPrint heat numbers and MTC references on inspection reports and packing lists.
Offcuts versus scrap — and why the difference matters
| Usable offcut (remnant) | Scrap | |
|---|---|---|
| What it is | A piece large enough to use on another job | Material too small or damaged to reuse |
| Where it goes | Back to stock, under its heat number | Scrap yard, sold by weight |
| How to value it | Usually at material rate, or an agreed remnant rate | At scrap sale rate |
| Effect on job cost | Credited back to the job at a higher value | Credited back at a much lower value |
| If untracked | Reordered material that was already in the yard | Losses invisible until year-end |
Free calculator: true material cost and fabrication cost per kg
Enter one job’s numbers. Weights in kg, rates in ₹ per kg. Nothing you type leaves your browser.
How Pothera ERP handles heats, offcuts and scrap
- Plates, sections and bars are received and stocked with heat and lot numbers.
- Material is issued to jobs by heat, so every finished job can be traced back to its material and certificates.
- Usable offcuts are returned to stock against their heat and valued; scrap is recorded by job and its sale is accounted.
- Job costing shows material, labour, overheads, job work, offcuts and scrap — against the quote. See ERP for metal fabrication and ERP for steel.
Frequently asked questions
What is a heat number in steel?
A heat number identifies the melt, or heat, of steel a product was made from. It is marked on the plate, section, pipe or fitting and printed on the mill test certificate, which records that heat’s chemistry and mechanical properties.
What is heat number traceability?
Heat number traceability is the ability to show which heat of steel every part of a finished job came from, and to produce its mill test certificate. It depends on recording heat numbers at receipt, issue, cutting and dispatch.
How do you read a heat number?
The heat number is the mill’s code for the melt and is usually stamped, stencilled or labelled on the material alongside the grade and size. Match it to the same number on the mill test certificate to read its chemistry and test results.
How to calculate fabrication cost per kg?
Take the job’s material cost after crediting usable offcuts and scrap sales, add labour, machine, overhead and job-work costs, and divide by the finished weight in kg.
How to calculate steel wastage percentage?
Wastage or scrap percentage = (material issued − finished weight − usable offcuts returned to stock) ÷ material issued × 100. Count reusable offcuts separately; they are not waste if they are returned to stock.
What is the difference between an offcut and scrap?
An offcut, or remnant, is a piece large enough to reuse on another job and should go back to stock under its heat number. Scrap is material too small or damaged to reuse, sold by weight at scrap rates.
Can ERP track heat numbers and offcuts?
Yes. Pothera ERP records heat and lot numbers at receipt, issues material to jobs by heat, returns usable offcuts to stock under their heat and records scrap by job, so traceability and job costing come from the same records.
Sources and methodology
This guide compares categories of ERP, not named products. The criteria come from Bsquare’s own implementations for Indian manufacturers and traders, the questions buyers ask most often in Google India search, and the official GST and MSME rules cited below. Compliance thresholds are taken from the government sources listed; check them against the current notification before you rely on them. Reviewed by the Bsquare implementation team.
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See heat-wise costing on your job
Bring one completed job with its material issues and offcuts. We will show it in Pothera ERP, heat by heat.