USING MATERIAL FLOW COST ACCOUNTING METHOD TO MANAGE RESIDUES OF METAL INDUSTRY

Abstract

The resource development helps the nation to have sustainable resources for coming generations. Improving the profit and presence in the market are the main targets that any company works to achieve. The manufacturers and other businesses are under pressure to increase productivity while reducing production cost and environmental impact. They need to deal efficiently and effectively with theirs resources as the raw materials, machineries and power, to improve business productivity. The development of resources archives for all kinds of businesses and helps the nation to keep the sustainable resources by minimizing the losses or reusing the residues of raw materials. Reusing the residues is cheaper and it needs less power to produce than new raw material. Material flow cost accounting ‘MFCA’ method is a managerial tool to control and develop resources by comparing inputs and outputs quantities of material to calculate residues. It also studies how to minimize such residues. In this research MFCA was applied on manufacturing industry “producing firefighting vehicle” to reduce residues and increase profitability, by collecting the data from the production cards, designing drawing, and materials list and on site measuring. The results of the implementation of materials flow cost accounting method on these materials have proven that the profit is increased, the losses and residues are decreased, and the production time and models are improved. Material Flow Cost Accounting method is applicable with any organization having cost parameters. The recommendations of future studies for this research are given to firefighting factory to have more advantages in both environmental and economic sides as follows: • Continue the problem solving using mathematical programming (i.e. linear programming). • Adapt suggested approach MFCA to reduce residuals in other industrial process as welding process and machining process. • Extend the exercise including other raw materials in the factory as written papers and painting materials. KEYWORDS Material flow cost accounting, Material flow management, and Life cycle assessment, Sustainable Product Development, ISO14051.