【MFCA Concept Basic -5】 How can we implement MFCA?-2

Principles of MFCA
It is important to understand principles for effective implementation of MFCA. To this end, below is the explanation of MFCA principles as defined in ISO 14051.

MFCA can be used to increase the transparency of material flows and energy use, the associated costs and environmental impacts, and to support organizational decisions through MFCA-obtained information. This can be achieved by following the four core principles of MFCA methodology.

principles

Figure: Overview of MFCA Principle

1. Understand material flow and energy use
The flow of all materials and energy use for each quantity centre should be traced in order to understand how materials are used and transformed along the whole process.

2. Link physical and monetary data
Through MFCA, the environmental-related decision-making process can be linked to financial information via the material flow model which provides a better understanding of the real costs of material and energy use which results in an improved decision-making process.

3. Ensure accuracy, completeness, and comparability of physical data
MFCA requires that all data is verified and that all inputs and outputs are identified and quantified. It is recommended that all data is converted to a common unit. Using accurate and complete data is critical to identify the cause and source of any gap between inputs and outputs.

4. Estimate and assign costs to material losses
Real costs should be assigned to all material losses and products. When exact information is not available, the cost allocation should be as accurate and practical as possible. In MFCA, the information on costs attributed to the material losses, represent one of the main incentives for process improvement.

Based on the principles, I will explain on the fundamental elements of MFCA.

Hiroshi Tachikawa, Managing director of Propharm Japan Co., Ltd.———————————————————————————————————————
Mr. Tachikawa has been providing MFCA-related consulting and environmental risk management in various Asian countries for more than 10 years. In addition, Mr. Tachikawa has been providing MFCA-related training to more than 1,500 participants. The service contributed to higher performance in productivity, quality and environment for a number of Japanese and overseas companies in wide-ranging industries from manufacturing to service industries. Through the MFCA projects in Asia, cost-reduction amount reached more than USD 1,000,000. In addition, he has been leading the international standardization of Material Flow Cost Accounting (ISO 14051 and ISO 14052) as a technical expert for Japan and Assistant Secretary for the international standardization group.

For any inquiries related to MFCA, please do not hesitate to contact us at info@propharm.jp or call us at +81-(0)3-6328-3307