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Green Technology: Towards productivity improvements



Material Flow Cost Accounting (MFCA) is an environmental tool that was developed in Germany in the late 1990s and has been widely adopted in Japan. MFCA is applicable to all industries that use materials and energy, including extractive, manufacturing, service and other industries. It can be implemented by all organisations in any scale, with or without environmental management systems in place.

MFCA focuses on tracing waste, emissions and non-products, which help to boost an organisation’s economic and environmental performance. In MFCA, all input materials that are flowing through the production process can be traced, and the output in finished products and waste can be measured.

In addition, MFCA provides both internal and external benefits to an organisation by enabling it to make more profit with less environmental impact. A typical internal benefit is the strengthening of an organisation’s competitiveness, as MFCA delivers improvement in both profits and material productivity.

In order to standardise MFCA practices, the development and publication of ISO 14051 (published in September last year) was carried out. It will complement the ISO 14000 family of Environmental Management System standards (EMS) including Life Cycle Assessment (ISO 14040, ISO 14044), and Environmental Performance Evaluation (ISO 14031).

The inherent linkage with competitiveness and environmental protection is very suitable to the Malaysian situation thus making the MFCA practical and sustainable in the long term.

The Malaysian Productivity Corporation (MPC) has embarked on a pilot project of implementing MFCA in five model companies: Tokyo Ferrite (M) Sdn Bhd, Tenaga Cables Industries Sdn Bhd, Autokeen Sdn Bhd, KEU Transweld Sdn Bhd and Extremach Sdn Bhd. MPC together with the Asian Productivity Organisation (APO) and the Japan Productivity Centre (JPC) implemented this pilot project (27 Sept 2010 - 7 March 2012) and the cost saving of MFCA.

Currently, MPC is involved in implementing MFCA for seven more companies from the various economic sectors. This intervention phase is scheduled to be completed by next month. Activities on developing related services and activities are in line with MPC’s Enterprise Innovation Intervention Programme (EIIP) with technical assistance from both JPC and APO.

Developing productivity and innovation at enterprises will drive and raise the level of organisational productivity and innovation. This will, in turn, lower operating costs, boost competitiveness and increase real wage growth. This is one aspect of an overall strategy to enhance productivity and sustainability in long-term economic growth.

MPC is committed to continue with its involvement in promoting methodologies and techniques for sustainable development management in the various industries.

The efforts by MPC in this endeavor will ensure long-term sustainability of good environmental practices within the country, especially when they are integrated with the organisation’s objectives of improving productivity and quality.

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