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© 2015 EcoLean Consultancy 1

© 2015 EcoLean Consultancy Sdn. Bhd. Slide 1

GREEN PRODUCTIVITY TOOLS: ISO 14051 MATERIAL FLOW COST ACCOUNTING (MFCA) SUCCESS STORIES SHARING

Alex YAP


$ 450/M

$ 7678/M

$ 9815/M

$ 2338/M

MFCA

Overview of MFCA: Internal hidden profits



Overview of MFCA

•  MFCA is a method of EMA (MFCA Case book, METI Japan)

•  Tool for quan\fying the flows and stocks of materials in processes or produc\on lines in both physical and monetary units (ISO 14051)

•  Tools aimed to simultaneously reduce both environmental impact and cost (MFCA Case book, METI Japan)

•  Tool for systema\cally iden\fying and visualized the cost loss throughout the value added processes (Alex YAP, EcoLean)


General Framework

Generic application

Supplement ISO 14001

Not a mgmt system standard

Not for certification

ISO 14051:2011



Process Process Process

•  What is WASTE ?

•  What is Manufacturing cost ? •  What is MFCA?

Overview of MFCA


Energy

Offcut, reject, repair

RM, Labour

$12

$44

$345

$55

$45

$34

$11 $88

$76

WM

$47

FG $789

TOTAL Resources /unit Positive (+) Product

Negative (-)

Overview of MFCA



Overview of MFCA

Material Stamping Spot

Welding Inspectio

n

Product

Waste

Supplier A Supplier A

0 2 4 Energy Labour Material

MFCA: Visualizing waste from each steps of selected process

Coating PRODUCT


Increasing transparency of material flow and energy use, the associated costs and environmental aspects

Suppor:ng org decisions in areas such as Eng., Produc:on planning, QC, etc.

Improving coordina:on and communica:on on material and energy use within an org

MFCA Objec:ves

Objec\ves of MFCA



Material efficiency

Cost reduc:on

Energy Efficiency For

U

For the Society

For Your kids

For Env For

Org

For Org

Org

Benefits of MFCA


Example 1: Lens manufacturing factory: Canon Inc.

A lens manufacturing company achieved significant environmental and financial improvements aeer implement MFCA. The company having more then 1000 employees and the selected process was the camera lens manufacturing process

MFCA Success stories



Source: MFCA case examples 2011MITI Japan








•  Raw material input reduce 85%

•  Energy consump\on reduce 85%

•  Waste volume reduce 92%

•  Total achievement: US 11 Million as of 2008



Example 2 Brake lining manufacturing 40 Workers Annual sales: $ 18 Million MFCA Team: 3 Person Project Period: 2 Months




Conventional Production Management

RM Mixing, Oven

Processing, Grinding

QC, Store

FG 99.7%

Reject: 0.3%

MFCA Production Management

RM Mixing, Oven

Processing, Grinding

QC, Store

FG 82 %

Set up waste, Process waste, reject, waste disposal cost,

Cost of Final Product

Waste 18%



Reduce material loss by reduce grinded % à Modify mould ($ 8,300)

à MFCA jus\fy mould investment cost

à Reduce grind thickness from 1.5mm to 0.8 mm

à 0.7 mm or 47% material loss reduce




Waste disposal (Impact to Environment)

Processing time Use of raw material

(Sustaining Resources) Electricity (CO2

Emission) Man power

COST

47 % Material Loss Reduce/product

$ 130,500/Year

CO2 Emission Reduce : Result from Energy Usage Reduce = Electricity Grid (kwh) x Emission Coefficient Factor(KgCO2) x Emission Factor GWP = kg CO2 Equivalent



Example 3 Wooden door manufacturer 120 Workers Annual Sales: $ 45 Million MFCA Team: 2 Person Project Period: 3 Months




Cross Cut & Moulding

Stage 1

Stage 2

Painting

Stage 3 RM FG Packin

g

4389

2564

5588

1942

13188

421 0

2000

4000

6000

8000

10000

12000

14000

Cross Cut Stage 1 Stage 2 Painting Stage 3 Packing

MFCA Cost Visualized



4389

2564

5588

1942

13,188

421 0

2000

4000

6000

8000

10000

12000

14000

Cross Cut Stage 1 Stage 2 Painting Stage 3 Packing

Labour Cost

Energy Cost Material Cost

Others Cost

Time Motion Study: Stage 3 80% Patching RM Quality




13188

8900

Before After

Stage 3 Cost

L

E M

L E M

Reduce assembly time 98 Min/Door

Reduce chemical usage 70 %/Door

Reduce waste disposal cost 50%

Reduce MFG cost 15%/Door

Annual saving $ 290,000/ Product



Example 4 Tiles manufacturer 250 Workers Annual Sales: $ 90 Million MFCA Team: 3 Teams (Total 10 Persons) Project Period: 2 Months




MFCA Boundary

SORT 1st grade 2nd grade

Reject Down grade depreciation

QA

PASS (To Wrap)

FAIL (To Re select) Reject

Re-Select

1st grade 2nd grade


WRAP

Packing Lost (Compare to Std)

QA

PASS (To Wrap)


FG (Total of 1st and 2nd grade)

From Prod

Packing 1st grade

Packaging lost (Compared to

Std)

QC Pass (To warp)

Fail (To Re-select) Reject

Packing 2nd grade

Packaging lost (Compared to

Std)

QC Pass (To wrap)

Fail (To Re-select) Reject

Re- Select 1st Grade 2nd Grade


Wrap FG



SORT $ 371, 964

$ 6,563

QA

PASS (To Wrap)


Re-Select

1st grade 2nd grade


WRAP

Packing Lost (Compare to Std)

QA

PASS (To Wrap)


FG (Total of 1st and 2nd grade) From

Prod

Packing (1st) $ 354,459

$ 34

QC $ 200

NA

Packing (2nd) $ 17, 590

RM 0

QC $ 150

NA

Re- Select $ 9,260

$ 390

Wrap FG

QC Report & Sampling

plan Review

Prod (Defect)

CTC Program Sorting PIC

training program

$ 90, 000/Y (Product)

QCC Project




Example 5 Steel Furniture manufacturer 170 Workers Annual Sales: $ 80 Million MFCA Team: 3 person (Using theore\cal data only) Project Period: 2 Months



Shearing Press Bending SW Paint

line RM FG Assy




Review material thickness

Reduce thickness for top / bottom and

divider

20% Material reduce ($)

8% Energy reduce ($)



Review product design & welding

point / distance

Reduce welding spot

20% Energy reduce ($)




Review shearing spec & SOP

Reduce off cut / maximized material

usage

13% Material reduce ($)



Example 6 Healthcare product manufacturing 200 Workers Packaging material supply chain applica\on MFCA Team (3, include representa\ve from supplier/team)




Material Blowing Printing QC Storage

Supplier A

Supplier B

Supplier C

88 : 12

82 : 18

86 : 14



Example 7 Tea processing plant 40 Workers MFCA Team (5)




MFCA Success stories Fan 2pm – 6am 17 hours

Alternate labor force to reduce energy cost


Source: MPC MFCA wrap up presentation, 2012




MFCA Applica\on

MFCA

Pre-Improvement

Environmental CSR

LEAN TE/ICC

KAIZEN Cost Down

EMS ISO 14001

CO2 Emission

EnMS ISO 50001

SR ISO 26000

Material Efficiency

Industry Benchmark


Impact

ISO 9001/ 14001/ 50001

Integration

ISO 14051

MFCA

Sustainable Continuous Improvement Initiatives

Supply chain application

R&D application

Sustaining MFCA



Application

ISO 14001

ISO 14051

MFCA

Convert Environment Impact into monetary value

Environmental Objectives

Mgmt. Review

Sustaining MFCA


Application

ISO 9001

ISO 14051

MFCA

Continual improvement

Quality Objectives

Mgmt. Review

Sustaining MFCA



Application

Key factors

ISO 14051

MFCA

Top Management

Systematic approach

PLWS

Sustaining MFCA


QUESTION & ANSWER

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