What is material flow cost accounting (ISO 14051)?

Today, we explain overview of Material Flow Cost Accounting (MFCA). This method is increasingly drawing attention as this method will be internationallly standardized as ISO 14051 this year. I actually manage the internatioalization project as an Japanese expert and a member of secretariat.

When I happened to be familiar with this method, I was very impressed on how much benefits companies can gain once they successfully introduce MFCA. Yes, real money and environmental contribution (material and energy efficiency) come into your place.

Below is the brief explanation of material flow cost accounting:


What is Material Flow Cost Accounting, anyway?

Environmental management accounting helps you cover both your business and environmental management.

Material flow cost accounting (MFCA) is one of the major tools of Environmental management accounting (EMA). EMA is a set of procedures used within corporations and other organizations for linking environmental considerations with economic objectives.
Nowadays, there is no way for companies to ignore environmental aspects of their corporate activities. Consequently, organizations seek management tools to link the environment with the economy.

MFCA helps your smooth transition of existing operation to more sustainable operation.

MFCA is a management tool, which promotes the efficient use of materials more effectively, contributing to reduction of emission (waste). MFCA increases transparency of material flows which is a key to successful problem-solving and improvements.
By solving the problems, we can reduce waste generation, improve material productivity, and reduce the cost at the same time.

MFCA is simpler than other existing environmental management methods. Yes, you can do this even though you are not familiar with “environment”.

One good point about MFCA is its simplicity; MFCA is generally applicable to any organizations, regardless of type, size, activities and location, and not only in developed countries but in developing countries as well. Furthermore, the application of MFCA does not always require advanced computer-based information systems as an information base. Especially in organizations such as SMEs (small and medium-sized enterprises), simple spreadsheet calculations suffice.

Another blog will follow and make explanation on benefit of MFCA.