Integrating ERP and MFCA systems for improved waste-reduction decisions in a brewery in South Africa

Most breweries implement enterprise resource planning (ERP) systems to manage their orders, inventory, and finance and customer information without integrating it with other systems. Breweries can leverage the information sharing and visibility between ERP and material flow cost accounting (MFCA) systems by integrating these disparate systems to generate waste information for improved waste-reduction decisions. Brewery waste-reduction decisions have been based on insufficient waste information with opportunities for cost saving being lost. This paper explores the integration of ERP and MFCA systems to provide waste information in support of waste-reduction decisions in a South African brewery. A case study was conducted on a South African brewery to determine the extent and adequacy of waste information generated from its ERP database system and how its integration with MFCA can support and improve waste-reduction decisions. It was found that there is lack of integration among the databases of the various divisions within the brewery. The use MFCA to capture waste cost information was absent in this brewery since existing approach was based on variable costing while other waste-related costs are classified under overhead costs. Integrating ERP and MFCA systems will result in the availability of sufficient waste cost information. This paper concludes that the integration of ERP and MFCA by breweries will decrease errors of visibility of waste cost information for improved waste-reduction decisions.