Benefits from the application of MFCA at Dai Dung Steel Company

With over 20 years of experience in the steel industry, Dai Dung Steel Structure Joint Stock Company has become a reputable supplier of high-tech steel structure products in the country as well as in the world.

In order to improve product quality and satisfy the increasingly strict requirements from customers, the company’s management decided to apply Material Flow Cost Accounting (MFCA). Accordingly, the Central Dai Dung Steel Structure Joint Stock Company cooperated with the Center for Support of Small and Medium Enterprises Development 2 to research and implement MFCA tool for 6 months.

MFCA has been issued by the International Organization for Standardization (ISO) as ISO 14051: 2011.

During the implementation of the MFCA tool from March 2017 to November 2017, the economic value of Dai Dung Central Vietnam Steel Structure Joint Stock Company saved in 1 year reached nearly 1 billion VND through the awards. improved method at the cutting and painting stages, increasing productivity by 10% at the workshop.

To begin with, the MFCA team at the Company divided the production process into seven stages to conduct material flow analysis. In which, the biggest cost is in stage 1 and stage 7. The team also gives a rough estimate of three types of center costs: Material cost; System cost and Waste management cost. Energy costs can be added to raw material costs or quantified separately.

Mr. Vo Dinh Tan – Representative of Central Dai Dung Steel Structure Joint Stock Company, said that in the manufacturing process, applying MFCA to control raw materials, minimizing the amount of scrap flowing out in production process.

According to the company leaders, the current situation before applying MFCA, the company’s raw materials such as absorbent steel, shaped steel are not strictly controlled and wasted, creating defective products, waiting to be used and There are products that are not usable.

Through calculation, the cost before applying MFCA in the first stage is 31,963,000 VND, for a batch of 15 goby trees; while the cost in stage 7 is 394,000 VND. After applying MFCA, cost in stage 1 has been reduced by 14% and by 50% in stage 7. If multiplied by the number of production lots, it is estimated that, in 1 month, MFCA saves 117 million VND and 1.4 billion / year.

The Board of Directors of Dai Dung Central Region was determined to apply good cost management from the beginning and identified MFCA as a solution to help businesses improve production processes, eliminate defects, and reduce unnecessary waste. meeting the needs of customers, improving the position and reputation of the business in the market.

Steel structure products of Dai Dung always meet international standards and have been exported to 30 countries around the world. Works and projects implemented by Dai Dung company always receive satisfaction and high quality assessment from customers.

Productivity and Quality Office