Presentation on theme: "ABOUT MFCA MFCA is an environmental management accounting tool developed in Germany in the late 1990s; MFCA, can help boost an company's economic and."— Presentation transcript:
ABOUT MFCA MFCA is an environmental management accounting tool developed in Germany in the late 1990s; MFCA, can help boost an company's economic and environmental performance;
3 MFCA focuses on Wastes, as profit is hidden in wastes MFCA finds out the hidden profit Rs. MFCA Japanese “Mottainai” Concept, “What a shame to be wasteful” in ISO SIGNIFICANCE OF MFCA
SELECTED MODEL COMPANIES Sl. No. Name of Model CompanySector 1.M/s Somany Ceramics Ltd., KadiCeramic 2.M/s Sainest Tubes Pvt. Ltd., ChatralSteel Re-rolling 3.M/s Bhagwati Spherocast Pvt. Ltd., OdhavFoundry 4.M/s Baroda Moulds and Dies, VadodaraMolds and Dies
INITIATION OF MFCA The original MFCA concept was developed by Prof. Bernd Wagner & colleagues at IMU (Institute für Management und Umwelt) in Augsburg, Germany; Introduced in Japan around 2000; Many Japanese companies have since adopted MFCA;
7 7 Reduces Environmental Impacts Reduces Wastages Increases Profit Improves Productivity Internal benefits External benefits Benefits of MFCA Contributes to Sustainable Development
MFCA Evaluation Quantify & Track Flows & Stocks of Materials Evaluate Costs of Material Flows
MFCA The resulting information can help companies & managers to seek opportunities to generate financial benefits & reduce environmental impacts. MFCA is applicable to any organization that uses materials and energy.
10 Cost Elements: MFCA 1.Material: Input Value of Material 2.Energy: Input Value of Energy 3. System: Labor, Depreciation etc., 4.Disposal: Waste Management Cost Cost Elements
11 Determine the applicable product and boundary Establish quantity centers Set up the material flow model Decide data collection methods Determine allocation methods of energy and system cost Collect material flow data Make the flow cost matrix Analyze material flow data (loss analysis and process analysis) Plan measures to solve problems Implement measures planned Collect material flow data Cost reduction and lowered environmental impacts Repeat this cycle MFCA and PDCA Cycle
MFCA – SUPPLY CHAIN MFCA can be extended to other organizations in the supply chain, both upstream and downstream; Waste generation in an organization is often driven by the nature or quality of materials provided by a supplier, or the specification of the product requested by a customer.
COST EVALUATION OF MFCA POSITIVE PRODUCTS 1. Material Costs Material A : 40 kg x Rs. 100/kg = Rs. 4000/- Material B : 30 kg = Rs. 500/- 2. Energy Costs 3. System Costs NEGATIVE PRODUCTS Material Costs Material A : 10 kg x Rs. 100/kg = Rs. 1000/- 2. Energy Costs 3. System Costs 4. Waste Management Costs
COST EVALUATION OF MFCA POSITIVE PRODUCTS 1. Material Costs Material A : 35 kg x Rs. 100/kg = Rs. 3500/- Material B : 30 kg = Rs. 500/- 2. Energy Costs 3. System Costs NEGATIVE PRODUCTS Material Costs Material A : 5 kg x Rs. 100/kg = Rs. 500/- Material C : 20 kg= Rs. 250/- 2. Energy Costs 3. System Costs 4. Waste Management Costs
BENEFITS- MODEL COMPANIES Name of Model Company Investment (Rs.) Annual Monetary Savings (Rs.) Simple Payback Period M/s Somany Ceramics Ltd.2,00,000/-35,00,000/-Immediate M/s Sainest Tubes Pvt. Ltd.4,95,000/-2,09,43,924/-09 days M/s Bhagwati Spherocast Pvt. Ltd.1,00,00,000/-1,74,17,496/-About 1Year M/s Baroda Molds and Dies2,00,00,000/-2,47,00,000/-About 1Year
BENEFITS- MODEL COMPANIES By implementation of MFCA, Model Companies have improved their overall material savings, resource and energy savings with enhanced monetary savings bringing about improvement in company’s overall productivity.