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MFCA

Updated on November 23, 2014

MFCA

MFCA is an environment management method that is developed for the purpose of reducing cost and environment impact through waste reduction. It is a flow management of supply that is used to build products such as energy and material to meet the set targets, promotes optimized resource usage which in return reduces the input and cost in building the product. In Japan, MCFA is also referred as the Green Kaizen and it is considered as the improved version of the Lean Manufacturing. In addition to the muda (Overproduction, Transportation, Inventory, Motion, Defects, Over-processing and Waiting) introduced in TPS(Toyota Production System), MFCA includes the flow of raw materials which makes this approach significantly wider than TPS.

ISO STANDARD

Material Flow Cost Accounting is standardized 5 years ago under ISO14051 through Japan Ministry of Trade. This accounting principle serves as a link between economic aspect and the environment. In ISO 14001 (Environmental Management System), companies is spending money to comply with the standard while ISO 14051 give you the profitability after complying with EMS.

The reason why they developed it is to reduce both waste and pollution. In the 90’s, Japan is most developed country in Asia and at same time has the highest carbon per capita from fossil fuel use. Since the time they implemented this principle, the increase in emission significantly slow

There are 3 things to remember when implementing the MFCA.

  1. What is the input?
  2. What is the process?
  3. What is the output?

Input consists of anything injected to the system. It could be labor cost, electricity consumption, paper, or anything that use resources. The process could be milling, CNC, plastic injection in manufacturing industry. The output is the product of the process and it could positive (those that you can use) or negative emission (those that you will dispose).

Image credit to Dole
Image credit to Dole

How to save money on grocery

Can you use it at home? Let’s talk about cooking your breakfast meal. The first step is to go the grocery. If you apply MFCA here, the first waste that you will have is the car emission. You pay for the gas and now it will give your transportation means plus car emission. The question now is, are you buying food good for one week or just for single day to save gas? When you cook your food, will you heat it one time save power consumption?

If you take a look at this photo, what do you see? The first thing that come into my mind when I see this in the grocery is the price difference wherein the smaller juice is more expensive that the bigger one. The reason being is that the smaller juice is more difficult to produce and it requires more packaging materials. If you will do number crunching, you will notice that more than 50 percent of the beverages cost you buy is the packaging material which you will disposed later. Cost of can disposal is also another thing to account if you will compare the benefit of buying small and bigger canned juice.


Cost Reduction

If you apply MFCA in your everyday life, you can expect at least 10 to 20 percent reduction on your daily expenses. One of the most notable companies that apply this principle is Canon. For the longest time, what they know is that their manufacturing yield more than 90% and to their surprise, their actual scrap cost is 30% higher. After trimming and improving their process, they become one of the leaders in camera manufacturing.

Click this link to see MFCA case studies

Implementation of MFCA is easy as 123. All you need to do it to trace where the waste is going. If you want to save money, I suggest you apply this.

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