MFCA methodology
About this good practice
The MFCA (Material Flow Cost Accounting) is a diagnosis methodology that enable to calculate the real cost of a waste, including not only the external cost of management (transportation and elimination costs), but also including internal management costs and production cost: raw material cost, processing cost (energy, equipment, working force). This new cost accounting method, defined in the ISO 14051 standard, makes it possible to identify and quantify the costs of material losses (materials purchased not integrated in the final product).
With MFCA, waste reduction becomes a key competitiveness factor for companies.
MFCA also provides information on the structure of these costs and the process steps that contribute the most. ADEME has recently published highly informative testimonials and figures from companies that have implemented this method in various sectors (agri-food, printing, plastics, metallurgy, etc.).
This methodology is generally implemented in the food company plant by an external consultant. The external expert is paid according to the time they need to implement the method. As this approach is still quite new and enable to reduce food loses, companies can also get some subsidies from regional authorities. In some case the payment of the consultant can be adjusted on the amount of savings that the company will eventually done. This option seems to be attractive in first approach.
Resources needed
Resource efficiency skills, R&D
Evidence of success
ADEME has estimated that 90% of SMEs do not know the full cost of their waste, limiting it to the only invoice paid to their waste service providers without taking production costs into account. Knowing the full cost of waste is identifying sources of savings and significant profitability for the company. High external costs of waste management stimulate food companies to adopt a resource-efficient management, so they are willing to implement the MFCA.
Potential for learning or transfer
Beyond the realization of a MFCA diagnosis in a food company, it is the implementation of indicators about amount and cost of food waste that would enable to maintain the results on a long term. Beyond environmental issues, the method of calculating the total cost of waste allows companies to explore a cost-cutting resource and to activate a powerful lever of operational efficiency. They should be encouraged to study these costs with new methods. Public authorities and business organizations also have a role to play in promoting and mainstreaming these approaches. MFCA is a methodology that contributes to estimate and quantify loss and food waste in agrifood companies so can help to improve their competitiveness, reduce waste and contribute to one of the components of the circular economy.
Further information
Website
Good practice owner
You can contact the good practice owner below for more detailed information.
ADEME, FRIAA (Regional Food Industry Federation), Critt Agro