Material flow cost accounting to manage corporate resource efficiency
Table of contents
Rising prices in the commodity markets and increasingly scarce resources represent steadily increasing challenges to companies. Recent developments show that companies should best start in their own production facilities and look closer at the (ab)use of required production materials. An analysis of the German Federal Statistical Office (2011) shows that material costs represent by far the largest asset in terms of value for manufacturing companies (45.1 %). In the second place, trailing far behind, are labor costs with approximately 25.8 %. The currently heavily discussed energy costs account for, on average, only 2.2 % of the total costs in the German industry. (Reference: Destatis)
Identifying any inefficiencies that may arise is possible for the first time in a comprehensive manner through the so-called method of material flow cost accounting (MFCA), a new system of cost accounting which was recently published as international standard ISO 14051. Codified towards the end of 2011, this method aims to identify inefficiencies of material and energy flows, thus avoiding associated costs. Not only can the MFCA method optimise the use of natural resources in the business environment, it can also reduce costs.
Professor Dr. Edeltraud Günther served as chairwoman of the associated standard committee and promotes its rapid and extensive dissemination, amongst others through the organisation and arrangement of the science-oriented international EMAN Conference on the topic of material flow cost accounting at the TU Dresden(Conference of the Environmental and Sustainability Management Accounting Network (EMAN), March 21st – 22nd 2013). More information is available here. Due to its economic relevance, the MFCA method has become a focus of research at the institutional chair and was in recent years expanded through externally funded projects in cooperation with practitioners.
Within the scope of the project presented here, the following three objectives are considered:
- First, the method of MFCA shall be introduced to further practice partners for resource use minimisation and cost optimisation.
- The advancement of the method, among other things by extending the life cycle perspective.
- Additionally, the link of MFCA with the company’s strategic planning, especially Management Control Systems, shall be researched and implemented by practice partners.
Leadership
Researchers
- Dipl.-Wi.-Ing. Anne Bergmann
- Dipl.-Volkswirtin Ramona Rieckhof
Term
09/2012 - 06/2017
Financing
- Freistaat Sachsen
- Stiftung der deutschen Wirtschaft
- Privatwirtschaft
Publications and Presentations
For information about publications and presentations, please visit our parallel German website.
Prizes and Awards
Research focus
- Environmental Management Accounting (mit Verlinkung)
- Decision Models
- Environmental Management