Material Flow Cost Accounting and Its Application on Heavy and Construction Machinery Industry

Abstract

Purpose – The research aims to demonstrate with a cost accounting method that it is possible for businesses to increase their environmental performance while increasing their economic performance. Design/methodology/approach – The research was carried out by considering the production process of the Tiger Drill Machine produced by SET MAKİNE as a case study. In the research, the method described in the ISO 14051:2011 Material Flow Cost Accounting standard was applied to the production process of the Tiger Drill Machine. Findings – As a result of the analyzes, it was determined that 48.3% of the inputs included in the production processes to produce this machine leave the system as non-product output. According to the Material Flow Cost Accounting method, this output leaves the system as waste and emissions. As a result of improvements to be made in this production process, production will become more efficient and material loss will decrease. This will increase performance both economically and environmentally. Discussion – Case studies in the literature, especially in Japan and Germany, have emerged similarly to the results of this research. The main problem is how to apply this method to businesses. Encouraging practices and projects should be carried out in this regard. It is necessary to support the provision of consultancy services to businesses within the scope of the projects. In addition, this method should be applied in sectors other than the Business and Construction Machinery sector, which is emphasized in this research. The application of this method serves both for the development of general businesses and to leave a cleaner future environmentally.