Material Flow Cost Accounting (MFCA) can also use a environment management tool to effectively implement cost accounting and ensure the cost effects on financial system.
Overview to Material Flow Cost accounting
Material Flow Cost accounting is a most famous & useful tools of environment management tool originally developed by German People. But in Japan has enhance impotency of the MFCA by introducing the new ways of the use this tool for save the money of business.
Before few years I read the book that first sentence was there “Your waste dump is your gold mine” that words motivate to read the MFCA whole book. Before the full understanding of MFCA, lets understand little easier way, How MFCA can save your money or generate money though unexpected ways.
MFCA concept focus on “Waste” that comes out from regular production. If the reduces the wastage in overall production’s process that hidden money automatically shows up.
Raw Material Cost + Production Process Cost + Time = $ Saving
Waste that eating Production Area / Space
Above little calculation show only basic concept of the saving money from waste that major parts of the MFCA concept involved. Beside of the above calculation hidden benefits are also calculating at time of the MFCA are works physically on organization root.
Waste is not only waste it’s a making a big challenging against management in case company have a limited space for workstation. Space used for waste that makes a problem against material movement which is major activity for production can be disturb. Further Waste management that includes waste movements, assign human to maintain waste or dump area.
Recycling of the waste enhance expenses are non recoverable
Off course, recycling of waste is gives a benefit to company & reducing a burden as well.
But… but … but … here we are thinks!
Why we generate waste that needs to recycle, by the way recycling process also take a time & spends money too. Recycling is the process for the waste that is costly to reduction ways against generation…
There is matter of compromise…. Well its ok 3 to 5% major companies has acceptable level on that cases waste recycling is GOLD.
Waste is calls in MFCA “Negative Product”: Cost of Wasted material that is negative products as we discussed before. MFCA is really effective tool to waste and cost reduction.
How MFCA help to Environment Management?
As simple to consider reduction of the natural resources are directly helps to environment. As we know from beginning. MFCA is management tool too… It is encouraged for well-organized use of material more effectively impacting causally to reduction of emissions.
Calculations, visual step during MFCA project clean image grow up against management the help to reduce waste generation & help to improves productivity.