SIST EN ISO 14051:2012

SLOVENSKI STANDARD
01-marec-2012
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Environmental management - Material flow cost accounting - General framework (ISO
14051:2011)
Umweltmanagement - Materialflusskostenrechnung - Allgemeine Rahmenbedingungen
(ISO 14051:2011)
Management environnemental - Coût d'acheminement des matières - Cadre général
(ISO 14051:2011)
Ta slovenski standard je istoveten z: EN ISO 14051:2011
ICS:
13.020.10 Ravnanje z okoljem Environmental management
2003-01.Slovenski inštitut za standardizacijo. Razmnoževanje celote ali delov tega standarda ni dovoljeno.

EUROPEAN STANDARD
EN ISO 14051
NORME EUROPÉENNE
EUROPÄISCHE NORM
September 2011
ICS 13.020.10
English Version
Environmental management - Material flow cost accounting -
General framework (ISO 14051:2011)
Management environnemental - Comptabilité des flux Umweltmanagement - Materialflusskostenrechnung -
matières - Cadre général (ISO 14051:2011) Allgemeine Rahmenbedingungen (ISO 14051:2011)
This European Standard was approved by CEN on 3 September 2011.

CEN members are bound to comply with the CEN/CENELEC Internal Regulations which stipulate the conditions for giving this European
Standard the status of a national standard without any alteration. Up-to-date lists and bibliographical references concerning such national
standards may be obtained on application to the CEN-CENELEC Management Centre or to any CEN member.

This European Standard exists in three official versions (English, French, German). A version in any other language made by translation
under the responsibility of a CEN member into its own language and notified to the CEN-CENELEC Management Centre has the same
status as the official versions.

CEN members are the national standards bodies of Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia,
Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland,
Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland and United Kingdom.

EUROPEAN COMMITTEE FOR STANDARDIZATION
COMITÉ EUROPÉEN DE NORMALISATION

EUROPÄISCHES KOMITEE FÜR NORMUNG

Management Centre: Avenue Marnix 17, B-1000 Brussels
© 2011 CEN All rights of exploitation in any form and by any means reserved Ref. No. EN ISO 14051:2011: E
worldwide for CEN national Members.

Contents Page
Foreword .3
Foreword
This document (EN ISO 14051:2011) has been prepared by Technical Committee ISO/TC 207 “Environmental
management”.
This European Standard shall be given the status of a national standard, either by publication of an identical
text or by endorsement, at the latest by March 2012, and conflicting national standards shall be withdrawn at
the latest by March 2012.
Attention is drawn to the possibility that some of the elements of this document may be the subject of patent
rights. CEN [and/or CENELEC] shall not be held responsible for identifying any or all such patent rights.
According to the CEN/CENELEC Internal Regulations, the national standards organizations of the following
countries are bound to implement this European Standard: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia,
Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain,
Sweden, Switzerland and the United Kingdom.
Endorsement notice
The text of ISO 14051:2011 has been approved by CEN as a EN ISO 14051:2011 without any modification.

INTERNATIONAL ISO
STANDARD 14051
First edition
2011-09-15
Environmental management — Material
flow cost accounting — General
framework
Management environnemental — Comptabilité des flux matières —
Cadre général
Reference number
ISO 14051:2011(E)
©
ISO 2011
ISO 14051:2011(E)
©  ISO 2011
All rights reserved. Unless otherwise specified, no part of this publication may be reproduced or utilized in any form or by any means,
electronic or mechanical, including photocopying and microfilm, without permission in writing from either ISO at the address below or
ISO's member body in the country of the requester.
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Tel. + 41 22 749 01 11
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Published in Switzerland
ii © ISO 2011 – All rights reserved

ISO 14051:2011(E)
Contents Page
Foreword . iv
Introduction . v
1  Scope . 1
2  Normative references . 1
3  Terms and definitions . 1
4  Objective and principles of MFCA . 4
4.1  Objective . 4
4.2  Principles . 4
5  Fundamental elements of MFCA . 5
5.1  Quantity centre . 5
5.2  Material balance . 5
5.3  Cost calculation . 6
5.4  Material flow model . 8
6  Implementation steps of MFCA . 9
6.1  General . 9
6.2  Involvement of management . 10
6.3  Determination of necessary expertise . 10
6.4  Specification of a boundary and a time period . 10
6.5  Determination of quantity centres . 11
6.6  Identification of inputs and outputs for each quantity centre . 11
6.7  Quantification of the material flows in physical units . 11
6.8  Quantification of the material flows in monetary units . 11
6.9  MFCA data summary and interpretation . 12
6.10  Communication of MFCA results . 13
6.11  Identification and assessment of improvement opportunities . 13
Annex A (informative) Difference between MFCA and conventional cost accounting . 14
Annex B (informative) Cost calculation and allocation in MFCA . 16
Annex C (informative) Case examples of MFCA . 24
Bibliography . 37

ISO 14051:2011(E)
Foreword
ISO (the International Organization for Standardization) is a worldwide federation of national standards bodies
(ISO member bodies). The work of preparing International Standards is normally carried out through ISO
technical committees. Each member body interested in a subject for which a technical committee has been
established has the right to be represented on that committee. International organizations, governmental and
non-governmental, in liaison with ISO, also take part in the work. ISO collaborates closely with the
International Electrotechnical Commission (IEC) on all matters of electrotechnical standardization.
International Standards are drafted in accordance with the rules given in the ISO/IEC Directives, Part 2.
The main task of technical committees is to prepare International Standards. Draft International Standards
adopted by the technical committees are circulated to the member bodies for voting. Publication as an
International Standard requires approval by at least 75 % of the member bodies casting a vote.
Attention is drawn to the possibility that some of the elements of this document may be the subject of patent
rights. ISO shall not be held responsible for identifying any or all such patent rights.
ISO 14051 was prepared by Technical Committee ISO/TC 207, Environmental management.

iv © ISO 2011 – All rights reserved

ISO 14051:2011(E)
Introduction
The aim of this International Standard is to offer a general framework for material flow cost accounting
(MFCA). MFCA is a management tool that can assist organizations to better understand the potential
environmental and financial consequences of their material and energy use practices, and seek opportunities
to achieve both environmental and financial improvements via changes in those practices.
MFCA promotes increased transparency of material and energy use practices via development of a material
flow model that traces and quantifies the flows and stocks of materials within an organization in physical units.
Energy can either be included as a material or quantified separately in MFCA. Any costs that are generated by
and/or associated with the material flows and energy use are subsequently quantified and attributed to them.
In particular, MFCA highlights the comparison of costs associated with products and costs associated with
material losses, e.g. waste, air emissions, wastewater.
Many organizations are unaware of the full extent of the actual cost of material losses in adequate detail
because data on material losses and the associated costs are often difficult to extract from conventional
information, accounting and environmental management systems. However, once available via MFCA, these
data can be used to seek opportunities to reduce material use and/or material losses, improve efficient uses of
material and energy, and reduce adverse environmental impacts and associated costs.
MFCA is applicable to all industries that use materials and energy, including extractive, manufacturing, service,
and other industries. It can be implemented by organizations of any type and scale, with or without
environmental management systems in place, in emerging economies as well as in industrialized countries.
MFCA is one of the major tools of environmental management accounting and is primarily designed for use
within a single facility or organization. However, MFCA can be extended to multiple organizations within a
supply chain, to help them develop an integrated approach to more efficient use of materials and energy.
This International Standard provides
 common terminologies;
 objective and principles;
 fundamental elements;
 implementation steps.
In addition, the annexes illustrate some of the differences between MFCA and conventional cost accounting,
cost evaluation methods, and case examples of MFCA application from different sectors and a supply chain.

INTERNATIONAL STANDARD ISO 14051:2011(E)

Environmental management — Material flow cost accounting —
General framework
1 Scope
This International Standard provides a general framework for material flow cost accounting (MFCA). Under
MFCA, the flows and stocks of materials within an organization are traced and quantified in physical units
(e.g. mass, volume) and the costs associated with those material flows are also evaluated. The resulting
information can act as a motivator for organizations and managers to seek opportunities to simultaneously
generate financial benefits and reduce adverse environmental impacts. MFCA is applicable to any
organization that uses materials and energy, regardless of their products, services, size, structure, location,
and existing management and accounting systems.
MFCA can be extended to other organizations in the supply chain, both upstream and downstream, thus
helping to develop an integrated approach to improving material and energy efficiency in the supply chain.
This extension can be beneficial because waste generation in an organization is often driven by the nature or
quality of materials provided by a supplier, or the specification of the product requested by a customer.
By definition, management accounting and environmental management accounting (EMA) focus on providing
organizations with information for internal decision-making. MFCA, one of the major tools of EMA, also
focuses on information for internal decision-making, and is intended to complement existing environmental
management and management accounting practices. Although an organization can choose to include external
costs in an MFCA analysis, external costs are outside the scope of this International Standard.
The MFCA framework presented in this International Standard includes common terminologies, objective and
principles, fundamental elements, and implementation steps. However, detailed calculation procedures or
information on techniques for improving material or energy efficiency are outside the scope of this
International Standard.
This International Standard is not intended for the purpose of third party certification.
2 Normative references
The following referenced documents are indispensable for the application of this document. For dated
references, only the edition cited applies. For undated references, the latest edition of the referenced
document (including any amendments) applies.
ISO 14050, Environmental management — Vocabulary
3 Terms and definitions
For the purposes of this document, the terms and definitions given in ISO 14050 and the following apply.
3.1
cost
monetary value of resources consumed to perform activities
ISO 14051:2011(E)
3.2
cost allocation
indirect attribution of a cost between different objects, such as a product or process, by using an appropriate
apportionment basis.
NOTE In this International Standard, the object can be processes, quantity centres, products and material losses.
3.3
cost assignment
direct attribution of a cost to a specific object, such as a product or process
3.4
energy cost
cost for electricity, fuels, steam, heat, compressed air and other like media
NOTE Energy cost can be either included under material cost or quantified separately, at the discretion of the
organization.
3.5
energy loss
all energy use, except energy incorporated into intended products
NOTE Energy loss can be either included under material loss or quantified separately, at the discretion of the
organization.
3.6
energy use
manner or kind of application of energy
EXAMPLE Ventilation; lighting; heating; cooling; transportation; processes; production lines.
[ISO 50001:2011, definition 3.18]
3.7
environmental management accounting
EMA
identification, collection, analysis and use of two types of information for internal decision making:
 physical information on the use, flows and destinies of energy, water and materials (including wastes) and
 monetary information on environment-related costs, earnings and savings
[15]
[IFAC, 2005 ]
3.8
input
material or energy flow that enters a quantity centre
3.9
inventory
stock of materials, intermediate products, products in process, and finished products
3.10
material
substance that enters and/or leaves a quantity centre
NOTE 1 Materials can be divided into two categories:
 materials that are intended to become part of products, e.g. raw materials, auxiliary materials, intermediate products;
 materials that do not become part of products, e.g. cleaning solvents and chemical catalysts, which often are referred
to as operating materials.
2 © ISO 2011 – All rights reserved

ISO 14051:2011(E)
NOTE 2 Some types of materials can be classified into either category, depending on their use. Water is one such
material. In some cases, water can become part of a product (e.g. bottled water), while in other cases it can be used as an
operating material (e.g. water used in an equipment washing process).
NOTE 3 Energy carriers like fuels or steam can be identified as materials, at the discretion of the organization.
3.11
material balance
comparison of physical quantities of inputs, outputs and inventory changes in a quantity centre over a
specified time period
3.12
material cost
cost for a substance that enters and/or leaves a quantity centre
NOTE Material cost can be calculated in various ways, e.g. standard cost, average cost, and purchase cost. The
choice between cost calculation methods is at the discretion of the organization.
3.13
material distribution percentage
proportion of the material inputs that flow into products or material losses
3.14
material flow
movements of a material or group of materials between various quantity centres within an organization or
along a supply chain
3.15
material flow cost accounting
MFCA
tool for quantifying the flows and stocks of materials in processes or production lines in both physical and
monetary units
3.16
material loss
all material outputs generated in a quantity centre, except for intended products
NOTE 1 Material losses include air emissions, wastewater and solid waste, even if these material outputs can be
reworked, recycled or reused internally, or have market value.
NOTE 2 By-products can be considered as either material losses or products, at the discretion of the organization.
3.17
output
product, material loss or energy loss that leaves a quantity centre
NOTE Any intermediate or semi-finished product that leaves a quantity centre is treated as a product in MFCA.
3.18
process
set of interrelated or interacting activities that transforms inputs to outputs
[ISO 14040:2006, definition 3.11]
3.19
product
any goods or service
NOTE Adapted from ISO 14040:2006, definition 3.9.
ISO 14051:2011(E)
3.20
quantity centre
selected part or parts of a process for which inputs and outputs are quantified in physical and monetary units
3.21
system cost
cost incurred in the course of in-house handling of the material flows, except for material cost, energy cost and
waste management cost
EXAMPLE Cost of labour; cost of depreciation and maintenance; cost of transport.
3.22
waste management cost
cost of handling material losses generated in a quantity centre
NOTE 1 Waste management includes management of air emissions, wastewater, and solid waste.
NOTE 2 Waste management cost includes the following:
 the costs for onsite activities, e.g. reworking of rejected products, recycling, waste tracking, storage, treatment, and
disposal;
 the costs for outsourced activities, e.g. waste storage, transport, recycling, treatment, and disposal.
4 Objective and principles of MFCA
4.1 Objective
The objective of MFCA is to motivate and support the efforts of organizations to enhance both environmental
and financial performance through improved material and energy use by means of the following:
 increasing the transparency of material flows and energy use, the associated costs and environmental
aspects;
 supporting organizational decisions in areas such as process engineering, production planning, quality
control, product design and supply chain management; and
 improving coordination and communication on material and energy use within an organization.
4.2 Principles
4.2.1 Understanding material flow and energy use
The flow of materials should be traced in order to create a material flow model (see 5.4) that illustrates the
movements of materials and the use of energy for all quantity centres where materials are stocked, handled,
used, or transformed (e.g. storage, manufacturing processes, and waste management operations).
4.2.2 Linking physical and monetary data
Environmental and financial decision-making within an organization should be linked by the collection of data
on the physical quantities of materials and energy use, and data on the associated costs. These two types of
data should be clearly integrated via the material flow model.
4.2.3 Ensuring accuracy, completeness and comparability of physical data
Physical data on material flows should either be collected in consistent measurement units or with sufficient
conversion factors so that the data may later be converted to a common measurement unit, preferably mass,
4 © ISO 2011 – All rights reserved

ISO 14051:2011(E)
for purposes of analysis and comparison. These data should be used to balance input and output flows to
determine if there are any significant data gaps.
4.2.4 Estimating and attributing costs to material losses
The total costs caused by and/or associated with material losses should be estimated as accurately and
practicably as possible, and these costs should be attributed to the material losses that generated the costs,
not to the products.
5 Fundamental elements of MFCA
5.1 Quantity centre
A quantity centre is a selected part or parts of a process for which inputs and outputs are quantified in physical
and monetary units. Typically, quantity centres are areas in which materials are stocked and/or transformed
such as storage, production units, and shipping points. The quantity centre serves as the basis for data
collection activities under MFCA. First, material flows and energy use are quantified in quantity centres.
Second, material costs, energy costs, system costs and waste management costs are quantified.
5.2 Material balance
Material that enters a quantity centre eventually leaves the quantity centre in the form of either product or
material loss. Material can also reside within the quantity centre (e.g. storage) for a period of time, contributing
to changes in inventory within the quantity centre (initial inventory minus final inventory).
Because mass and energy can neither be created nor destroyed, only transformed, the physical inputs
entering a system should be equal to the physical outputs from the system, taking into account any inventory
changes within the system. Thus, in order to ensure that all of the materials subject to the MFCA analysis are
accounted for, material balance should be performed, comparing the quantities of material inputs to outputs
(i.e. products and material losses) and changes in inventory to identify any significant “missing” materials or
other data gaps. Quantification of material flows and the assurance of a balance between material inputs and
outputs (i.e. products and material losses) are both essential requirements for MFCA.
An example of a simple material balance around a quantity centre is illustrated in Figure 1. In this example,
95 kg of material enters the quantity centre. Over the analysis time period, the inventory of the material
changes from initial inventory of 15 kg to final inventory of 10 kg. The amount of material leaving the quantity
centre is 100 kg, i.e. input (95 kg) plus initial inventory (15 kg) minus final inventory (10 kg). That 100 kg is
distributed to product (70 kg) and material loss (30 kg) as illustrated in Figure 1.
Input Output
Quantity centre
Material Product
95 kg 70 kg
Initial Final
inventory of inventory of
material material Material loss
15 kg 10 kg
30 kg
NOTE For simplicity, this figure only includes information on material flows, not energy use.
Figure 1 — Material balance in a quantity centre
In practice, imbalances between inputs and outputs can occur due to the intake of air or moisture, chemical
reaction effects that are not easily quantified, or measurement errors. Any significant imbalances should be
investigated.
ISO 14051:2011(E)
Physical data are often available in a variety of different measurement units. In order to perform material
balance, conversion factors may be necessary for converting the available physical data to a single
standardized unit (e.g. mass) for purposes of comparison. The need for data comparability should be taken
into account when MFCA data collection is ongoing. The usefulness of the data units for the purpose of
environmental impact assessment should also be considered.
5.3 Cost calculation
5.3.1 General
Decisions in organizations often involve financial considerations. Therefore, material flow data should be
translated into monetary units to support decision-making. To that end, all costs caused by and/or associated
with the material flows entering and leaving a quantity centre should be quantified and assigned or allocated
to those material flows.
Under MFCA, three types of costs are quantified: material costs; system costs; and waste management costs.
Energy costs can either be included under material costs or quantified separately, at the discretion of the
organization. For the purposes of this International Standard, energy costs will be calculated and shown
separately.
Input Output
Quantity centre
Material (95kg)
Product (70kg)
Material costs $ 950
Energy costs $ 50
Material costs $ 700
System costs $ 800
Energy costs $ 35
Waste management costs  $ 80
System costs $ 560
Total costs $ 1 295
Initial
Final
inventory of
inventory of
material (15 kg)
material (10 kg)
$ 150
$ 100
Material loss (30kg)
Material costs $ 300
Energy costs $ 15
System costs $ 240
Waste management costs $ 80
Total costs $ 635
Figure 2 — Cost calculation in a quantity centre
In Figure 2, the costs incurred for the quantity centre are as follows:
 material costs: $ 1 000;
 energy costs: $ 50;
 system costs: $ 800;
 waste management costs: $ 80.
NOTE 1 Material costs ($ 1000) = input ($ 950)  initial inventory ($ 150)  final inventory ($ 100).
Material costs, energy costs and system costs are subsequently assigned or allocated to the quantity centre
outputs (i.e. products and material losses) based on the proportion of the material input that flows into product
and material loss. Of the 100 kg of material used, 70 kg flows into product and 30 kg flows into material loss,
as illustrated in Figure 1. Thus, the material distribution percentages of 70 % and 30 % are used to allocate
energy and system costs to the product and material loss, respectively. In this example, the material
6 © ISO 2011 – All rights reserved

ISO 14051:2011(E)
distribution percentage based on mass is used to allocate these costs, but determination of the most
appropriate allocation criterion is at the discretion of the organization. In contrast, 100 % of the waste
management costs of $ 80 are attributed to material loss, since the costs are caused solely by this material
loss. In the final analysis, the total costs of material loss in this example are $ 635.
NOTE 2 The difference between MFCA and conventional cost accounting is illustrated in Annex A.
5.3.2 Cost allocation
In order to maximize analysis accuracy, all costs should be calculated from data available for individual
quantity centres and individual material flows, rather than estimated by cost allocation procedures. However,
costs such as energy costs, system costs, and waste management costs often are available only for an entire
process or facility. Thus, in practice, it will often be necessary to first allocate these costs to individual quantity
centres, and subsequently allocate them to products and material losses, in a two-step procedure, as follows:
 allocation of process-wide or facility-wide costs to different quantity centres; and
 allocation of quantity-centre costs to products and material losses (see Figure 2).
During each allocation step, an appropriate allocation criterion should be selected that reflects as closely as
possible the main driver for the costs being allocated. When process-wide or facility-wide costs are being
allocated to quantity centres, appropriate allocation criteria may include machine hours, production volume,
number of employees, labour hours, number of jobs performed, floor space, etc. For the second step,
allocation of costs from a quantity centre to products and material losses, another appropriate allocation
criterion should be selected, e.g. the total material distribution percentage, the material distribution percentage
of the main material. In all cases, determination of the most appropriate allocation criteria is at the discretion of
the organization.
NOTE 1 The most appropriate allocation criteria for different types of costs, e.g. energy costs and system costs, will not
necessarily be the same.
NOTE 2 Different allocation criteria can also be used for different components of system costs, e.g. labour costs,
depreciation costs, if this will reflect the distribution of actual costs more realistically.
NOTE 3 All waste management costs within a quantity centre are attributed to material losses, by definition, as
illustrated in Figure 2.
5.3.3 Cost carryover between quantity centres
An output from one quantity centre often becomes the input for another quantity centre. For example, Figure 2
illustrates a quantity centre with 70 kg product output. The costs associated with that product output are
estimated as $ 1 295, i.e. a combination of material costs, energy costs and system costs that are expended
to make that product. The total costs of $ 1 295 should be carried over and included as the costs associated
with the input for the next quantity centre. Clause B.4 presents an example both visually and with quantitative
data to illustrate how cost data are carried over when more than one quantity centre is involved. When
carrying over the costs, the cost items (material cost, energy cost and system cost) can be expressed
separately (see Table B.6).
5.3.4 Cost carryover of internally recycled material
Another example of an output that becomes an input is provided by the case of internally recycled materials. If
materials are recycled internally within the MFCA boundary, both financial and environmental benefits can
result. However, the fact that materials need to be recycled points to inefficiencies in the original process.
Internally recycled materials pass through quantity centres several times and each time may cause additional
material, system, energy and waste management costs. For example, the energy use in a quantity centre
often depends on the amount of material throughput. Therefore, the inefficiency that leads to internal recycling
increases the throughput of the quantity centre to achieve the same amount of product output, and increases
the energy use and related energy costs as well.
ISO 14051:2011(E)
If material loss occurs in a quantity centre and is recycled internally, it should be handled in the same way as
any other material loss. This means that the quantity centre costs should be allocated to products and material
losses in accordance with 5.3.2. To properly assess the costs of internal recycling, the following should be
taken into account:
 cost savings of internal recycling, i.e. purchase value of substituted material;
 additional costs of the recycling process;
 additional costs in other quantity centres caused by the flow of recycled material through the system.
5.4 Material flow model
In MFCA, production, recycling, and other systems are represented by visual models that illustrate multiple
quantity centres in which materials are stocked, used, or transformed as well as the movements of materials
between those quantity centres. Such a material flow model illustrates the overall flow of materials within the
boundary chosen for MFCA analysis. An example of a material flow model is provided in Figure 3.
MFCA boundary
Inputs
QC C Products
QC A QC B QC D
(Group of (Finished
(Process) (Process) (Storage)
processes) products)
Material Material Material Material
loss loss loss loss
Flow towards
finished products
QC E QC F
Material
Waste Waste
losses
Flow towards
management management
material losses
(Process) (Process)
QC: Quantity
centre
NOTE The MFCA boundary can be extended to other organizations in the supply chain, both upstream and
downstream.
Figure 3 — Material flow model for a process within the MFCA boundary
Figure 3 depicts a flow system, providing an overview of an entire process and identifying the points where
material losses can occur. Products include both finished products and intermediate products, i.e. material
inputs to other quantity centres. For each quantity centre illustrated in Figure 3, the modelling and calculation
explained in 5.2 and 5.3 should be conducted. Where material losses or a certain percentage of them are
recycled within the MFCA boundary directly or after a treatment process, they are shown as inputs. These
input flows are shown in QC A and QC B in Figure 3.
8 © ISO 2011 – All rights reserved

ISO 14051:2011(E)
6 Implementation steps of MFCA
6.1 General
Like any other management tool, MFCA requires a number of implementation steps, as outlined in this clause.
The level of detail and complexity of the analysis will depend on a number of factors, such as the size of the
organization, the nature of the organization's activities and products, the number of processes and quantity
centres chosen for analysis.
MFCA can be implemented in organizations with or without an environmental management system (EMS) in
place (e.g. ISO 14001), but the implementation process is easier and faster in those that do so within the
context of an existing EMS. MFCA can provide significant information in various stages of the Plan-Do-Check-
Act (PDCA) continual improvement cycle. For example, the use of MFCA allows the organization to include
financial considerations in establishing objectives and targets. The knowledge of potential environmental
impacts and financial impacts can enhance the quality of the evaluation, providing useful information for
decision-making.
Figure 4 provides an outline of the MFCA implementation steps constructed in accordance with a PDCA cycle.
The MFCA PDCA cycle can be included and applied at different phases of the EMS PDCA cycle.
ACT
PLAN
6.11 Identification and assessment of
6.2 Involvement of management
improvement opportunities
6.3 Determination of necessary expertise
6.4 Specification of a boundary and
a time period
6.5 Determination of quantity centres
CHECK
DO
6.6 Identification of inputs and outputs
6.10 Communication of MFCA results
for each quantity centre
6.7 Quantification of the material flows
6.9 MFCA data summary and interpretation
in physical units
6.8 Quantification of the material flows
in monetary units
Figure 4 — PDCA cycle for MFCA implementation
A logical approach for implementing an MFCA analysis will take typical steps outlined in 6.2 to 6.11.
ISO 14051:2011(E)
6.2 Involvement of management
Management level personnel should understand the value and practicability of MFCA in achieving an
organization's environmental and financial goals. To be effectively implemented, MFCA should be strongly
supported by management.
Management involvement should include the following:
 leading implementation;
 assigning roles and responsibilities, e.g. set-up of an MFCA task force;
 providing resources;
 monitoring progress;
 reviewing results; and
 deciding on improvement measures based on MFCA results.
6.3 Determination of necessary expertise
MFCA requires multiple types of expertise that can provide the diverse types of information needed for the
analysis. Examples of the types of expertise useful for implementation of MFCA include:
 operational expertise from design, procurement, and production regarding the flow of materials and
energy use throughout the organization;
 engineering and/or technical expertise on the material balance implications of processes, including
combustion and other chemical reactions;
 quality control expertise on issues such as product reject frequency, causes, and rework activities;
 environmental expertise on environmental aspects and impacts, waste types, and waste management
activities; and
 accounting expertise on cost accounting data and practices, e.g. cost allocation.
6.4 Specification of a boundary and a time period
Before an MFCA analysis can be undertaken, the MFCA boundary should be specified. The boundary can
encompass a single process, multiple processes, an entire facility, or a supply chain at the discretion of the
organization. However, it is advisable to focus initially on a process or processes with potentially significant
environmental and economic impacts.
In the context of a supply chain, MFCA implementation follows approximately the same steps outlined in this
clause, although the organizations belonging to the supply chain will need to modify or add steps to ensure
sufficient communication and collaboration. In order to be more effective, the selection of the implementation
steps should be agreed by all the relevant organizations that belong to the supply chain. See Annex C for
examples of MFCA application for a supply chain.
After specifying the boundary, a time period for MFCA data collection should be specified. The period for data
collection should be sufficiently long so as to allow meaningful data to be collected, and to take into account
any significant process variations, e.g. seasonal fluctuations, inherent process variances that can affect the
reliability and usability of the data. The appropriate time period can be a month, a half-year, or a year,
depending on the analysis. For some industries, it can be convenient to define the data collection period to
coincide with the manufacturing of a production lot.
10 © ISO 2011 – All rights reserved

ISO 14051:2011(E)
6.5 Determination of quantity centres
Various processes, such as receiving, cleaning, cutting, mixing, assembling, heating, packing, inspecting and
shipping, as well as material storage areas, can be considered as quantity centres. The quantity centres within
the MFCA boundary can be determined from process information, cost centre records, and other existing
information. If the material flows between two quantity centres cause relevant material losses or system costs,
e.g. energy for transport, oil or air pressure leakage, these flows may be determined as an additional quantity
centre.
6.6 Identification of inputs and outputs for each quantity centre
For each quantity centre within the MFCA boundary, the inputs and outputs should be identified. Possible
inputs are materials and energy. Possible outputs are products, material losses and energy losses. Energy
and energy loss can be either included under material and material loss respectively or estimated separately,
at the discretion of the organization.
Once the inputs and outputs have been identified for each quantity centre, they can be used to connect the
quantity centres within the MFCA boundary, so that data from the quantity centres can be linked and
evaluated across the entire system being studied.
6.7 Quantification of the material flows in physical units
For each quantity centre, the amounts of inputs and outputs should be quantified in physical units such as
mass, length, number of pieces, or volume, depending on the type of material. All physical units used should
be convertible to a single standardized unit (e.g. mass) so that material balances can be conducted for each
quantity centre.
A material balance requires that the total amount of outputs (i.e. products and material losses) is equal to the
total amount of inputs, taking into account any inventory changes within the quantity centre. Ideally, all
materials within the MFCA boundary should be traced and quantified, but materials that have minimal
environmental or financial significance can be omitted, at the discretion of the organization.
6.8 Quantification of the material flows in monetary units
6.8.1 Material costs
For each quantity centre, the material costs for inputs and outputs (i.e. products and material losses), should
be quantified. Material costs can be quantified in a number of different ways, e.g. historical cost, standard cost,
replacement cost. The choice is at the discretion of the organization, and may also be influenced by the
method which the organization is already using in its existing cost accounting. Depending on the selected
approach, the results of the MFCA analysis may differ.
The material costs for each input and output flow are quantified by multiplying the physical amount of the
material flow by the unit cost of the material over the time period chosen for the analysis. When quantifying
the material costs for the outputs (i.e. products and material losses), the material costs associated with any
changes in material inventory within the quantity centre also should be quantified.
The material costs in each quantity centre should be assigned to products and material losses, resp
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