MFCA. Overview of MFCA: Internal hidden profits GREEN PRODUCTIVITY TOOLS: ISO MATERIAL FLOW COST ACCOUNTING (MFCA) SUCCESS STORIES SHARING

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1 GREEN PRODUCTIVITY TOOLS: ISO MATERIAL FLOW COST ACCOUNTING (MFCA) SUCCESS STORIES SHARING Alex YAP 2015 EcoLean Consultancy Sdn. Bhd. Slide 1 Overview of MFCA: Internal hidden profits MFCA $ 450/M $ 9815/M $ 2338/M $ 7678/M 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 1

2 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) 2015 EcoLean Consultancy Sdn. Bhd. Slide 3 ISO 14051:2011 General Framework Generic application Supplement ISO Not a mgmt system standard Not for certification 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 2

3 Overview of MFCA What is WASTE? What is Manufacturing cost? What is MFCA? Process Process Process 2015 EcoLean Consultancy Sdn. Bhd. Slide 5 Overview of MFCA Energy Positive (+) TOTAL Resources Negati /unit Product ve (-) Offcut, reject, repair $76 RM, Labour $44 $55 $45 FG $789 WM $345 $34 $12 $88 $11 $ EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 3

4 Overview of MFCA Material Stamping Spot Welding Insp ectio n Coating PRODUCT MFCA: Visualizing waste from each steps of selected process Supplier A Supplier A Product Waste Energy Labour Material 2015 EcoLean Consultancy Sdn. Bhd. Slide 7 Objec\ves of MFCA Improving coordina:on and communica:on on material and energy use within an org MFCA Objec:ves Suppor:ng org decisions in areas such as Eng., Produc:on planning, QC, etc. Increasing transparency of material flow and energy use, the associated costs and environmental aspects 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 4

5 Benefits of MFCA For Your kids For U For Env Energy Efficiency For Org For the Society Material efficiency Cost reduc:on Org For Org 2015 EcoLean Consultancy Sdn. Bhd. Slide 9 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 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 5

6 Source: MFCA case examples 2011MITI Japan 2015 EcoLean Consultancy Sdn. Bhd. Slide 11 Source: MFCA case examples 2011MITI Japan 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 6

7 Raw material input reduce 85% Energy consump\on reduce 85% Waste volume reduce 92% Total achievement: US 11 Million as of 2008 Source: MFCA case examples 2011MITI Japan 2015 EcoLean Consultancy Sdn. Bhd. Slide 13 Example 2 Brake lining manufacturing 40 Workers Annual sales: $ 18 Million MFCA Team: 3 Person Project Period: 2 Months 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 7

8 Conventional Production Management RM Mixing, Oven Processing, Grinding QC, Store FG 99.7% Reject: 0.3% MFCA Production Management Cost of Final Product RM Mixing, Oven Processing, Grinding QC, Store FG 82 % Set up waste, Process waste, reject, waste disposal cost, Waste 18% 2015 EcoLean Consultancy Sdn. Bhd. Slide 15 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 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 8

9 47 % Material Loss Reduce/product CO2 Emission Reduce : Result from Energy Usage Reduce Waste disposal (Impact to Environment) Use of raw material (Sustaining Resources) Man power Processing time Electricity (CO2 Emission) = Electricity Grid (kwh) x Emission Coefficient Factor(KgCO2) x Emission Factor GWP = kg CO2 Equivalent COST $ 130,500/Year 2015 EcoLean Consultancy Sdn. Bhd. Slide 17 Example 3 Wooden door manufacturer 120 Workers Annual Sales: $ 45 Million MFCA Team: 2 Person Project Period: 3 Months 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 9

10 RM Cross Cut & Moulding Stage 1 Stage 2 Painti ng Stage 3 Packin g FG MFCA Cost Visualized Cross Cut Stage 1 Stage 2 Painting Stage 3 Packing 2015 EcoLean Consultancy Sdn. Bhd. Slide ,188 Others Cost Material Cost Energy Cost Labour Cost Cross Cut Stage 1 Stage 2 Painting Stage 3 Packing Time Motion Study: Stage 3 80% Patching RM Quality 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 10

11 Stage 3 Cost Reduce assembly time 98 Min/Door Reduce waste disposal cost 50% Reduce chemical usage 70 %/Door Reduce MFG cost 15%/Door M E L Before 8900 M E L After Annual saving $ 290,000/ Product 2015 EcoLean Consultancy Sdn. Bhd. Slide 21 Example 4 Tiles manufacturer 250 Workers Annual Sales: $ 90 Million MFCA Team: 3 Teams (Total 10 Persons) Project Period: 2 Months 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 11

12 From Prod SORT 1st grade 2nd grade Reject Down grade depreciation Packing 1st grade Packaging lost (Compared to Std) QC Pass (To warp) Fail (To Reselect) Reject Re- Select 1 st Grade 2 nd Grade Reject Down grade depreciation Wrap FG Packing 2nd grade QC Pass (To wrap) Packaging lost Fail (To Reselect) (Compared to Std) Reject MFCA Boundary 2015 EcoLean Consultancy Sdn. Bhd. Slide 23 From Prod SORT $ 371, 964 $ 6,563 Packing (1 st ) $ 354,459 $ 34 QC $ 200 NA Re- Select $ 9,260 $ 390 Wrap FG Packing (2 nd ) $ 17, 590 QC $ 150 RM 0 NA QC Report & Sampling plan Review Prod (Defect) CTC Program QCC Project Sorting PIC training program $ 90, 000/Y (Product) 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 12

13 Example 5 Steel Furniture manufacturer 170 Workers Annual Sales: $ 80 Million MFCA Team: 3 person (Using theore\cal data only) Project Period: 2 Months 2015 EcoLean Consultancy Sdn. Bhd. Slide 25 RM Shearin g Press Bending SW Paint line Assy FG 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 13

14 Review material thickness Reduce thickness for top / bottom and divider 20% Material reduce ($) 8% Energy reduce ($) 2015 EcoLean Consultancy Sdn. Bhd. Slide 27 Review product design & welding point / distance Reduce welding spot 20% Energy reduce ($) 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 14

15 Review shearing spec & SOP Reduce off cut / maximized material usage 13% Material reduce ($) 2015 EcoLean Consultancy Sdn. Bhd. Slide 29 Example 6 Healthcare product manufacturing 200 Workers Packaging material supply chain applica\on MFCA Team (3, include representa\ve from supplier/team) 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 15

16 Material Blowing Printing QC Storage Supplier A 88 : 12 Supplier B 82 : 18 Supplier C 86 : EcoLean Consultancy Sdn. Bhd. Slide 31 Example 7 Tea processing plant 40 Workers MFCA Team (5) 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 16

17 Fan 2pm 6am 17 hours Alternate labor force to reduce energy cost 2015 EcoLean Consultancy Sdn. Bhd. Slide 33 Source: MPC MFCA wrap up presentation, EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 17

18 MFCA Applica\on Pre-Improvement LEAN KAIZEN TE/ICC Cost Down SR ISO Material Efficiency CSR MFCA Environmental Industry Benchmark EMS ISO CO2 Emission EnMS ISO EcoLean Consultancy Sdn. Bhd. Slide 35 Sustaining MFCA ISO ISO 9001/ 14001/ Integration Sustainable Continuous Improvement Initiatives Supply chain application MFCA Impact R&D application 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 18

19 Sustaining MFCA ISO ISO Convert Environment Impact into monetary value Environmental Objectives MFCA Application Mgmt. Review 2015 EcoLean Consultancy Sdn. Bhd. Slide 37 Sustaining MFCA Continual improvement ISO ISO 9001 Quality Objectives MFCA Application Mgmt. Review 2015 EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 19

20 Sustaining MFCA Top Management ISO Key factors Systematic approach MFCA Application PLWS 2015 EcoLean Consultancy Sdn. Bhd. Slide 39 QUESTION & ANSWER Contact us at EcoLean Consultancy Sdn. Bhd. Slide EcoLean Consultancy 20