It is different to the 'spiral method' I used to make panels for my bags, and uses a foundation cloth, so as well as your scraps you need some cloth for your foundation (eg fine cotton sheeting), some Pellon/ Bondaweb/ WonderUnder, and threads.
Cut a piece of Bondaweb the same size as your foundation fabric, place your Bondaweb on your fabric rough (glue) side down, iron and then remove the backing paper to leave a layer of glue on your foundation fabric. (Hang on to the backing paper for the moment.)
Now start to lay out your scraps on your foundation fabric, butting them up together or overlapping them just a bit if necessary. You won't have to worry about seams and you don't have to lay them out in any particular order - you can be quite relaxed about it; it's a bit like crazy paving. Just don't leave any gaps.
When you have covered your backing fabric with scraps you can use the piece of paper you peeled away (obviously now glueless) to protect your iron from any stray glue round the edges while you bond the scraps to the backing fabric. I keep these bits of paper in my work tub - they come in handy.
You'll end up with this.
Now go over all the overlapped or butting edges with a small zigzag stitch or blanket stitch or whatever you fancy - again, you can be quite relaxed about it, crossing over pieces and reversing over your own stitching to follow another edge unless you are a perfectionist which I'm generally not. You might see some lines of stitching below where I have crossed a piece of fabric and then kept going just in order to avoid having to lift the needle to stop and start another line.
Now you have your lovely, scrappy fabric which you can treat like any other. First of all it is easier to keep in the cupboard without getting in a mess. Then you can cut selectively from it and use pieces for applique - it is easy to cut as it is stabilised by the backing. Or you can use larger pieces to make pouches or pincushions. Of course you can also join panels together for bigger projects.
I used some of mine this week to make a table mat just for me. It was inspired by Larisa's mats, which in turn were inspired by the Komebukuro bags and pouch I made. I really like that about blogging!
[If you don't have Bondaweb but happen to have a can of spray baste you can spray your foundation fabric and fix your scraps to it that way - omit the ironing!]