A loss / waste focused approach in cost management: Material flow cost accounting and textile industry application

Sustainable profit and competitive advantage are possible with the correct management of factors such as quality, speed, cost, efficiency and environmental losses. Therefore today, when natural resources are decreasing and becoming more valuable, it is important for businesses to monitor their production costs and control them for their sustainability. However, traditional methods are not sufficient to determine the actual cost and production losses of the product, which negatively affects the manager's decisions and the success of the business. The Material Flow Cost Accounting (MAMM) method, which forms the main frame of the study, provides resource efficiency, continuous improvement, economic and environmental sustainability, more transparent reporting by responding to this need. The aim of the study is to apply the MAMM method to the production system, to monitor the product and loss formation process from an environmental perspective, and to determine coordinately of the product and loss costs. In addition, it is also aimed to determine the losses in volumetric and monetary terms, which are lost and seperately unreported within the general production expenses in traditional methods by providing the quantity center input / output balance, and to report the obtained results to assist the senior management in the decision-making process. The MAMM method was applied in a medium-sized textile enterprise within the scope of this thesis study. Before the application, literature review was firstly done. Then, the production, management and cost system of the enterprise were observed and the documents related to the implementation period were examined. In the application, the case study method was used, a material flow model was created according to the application principles of the method, quantity centers were determined, material flows were physically and monetarily followed, and the distribution of the total production costs to the outputs (product and loss) was carried out on the basis of physical measurements. Product and loss costs are determined, losses are reported on the basis of variety, quantity and quantity center. As a result of the implementation, the product costs and production losses of the enterprise have been made more evident and the reasons of the losses have been better understood by the enterprise. The results have been compared with the aims of the study, interpreted and suggestions for improvement have been made. With this thesis, the method which can not be applied and not worked adequately in Turkey is expected to be introduced to other businesses, disseminated and contribute to the literature.