DOI: http://dx.doi.org/10.1065/lca2003.04.110
BACKGROUND. In developing products various requirements have to be integrated including functionality, quality, affordability as well as environmental aspects. Often conflicting requirements have to be fulfilled. Therefore, multi-dimensional decision support approaches are necessary.
METHODS. Here, one approach is to relate the conflicting requirements to each other. Life Cycle Costing (LCC) has the potential to support the trade-off between some environmental targets and overall affordability targets by including all monetary flows along the product life cycle (going beyond the well-known costs of ownership by integrating also long-term use and end-of-life costs). Those solutions can be identified that (a) have the highest efficiencies (where do we get most environmental improvements per €) and (b) have the highest affordability for the customer along the life cycle. Furthermore, on-costs in the design phase can be justified in terms of future savings either for the customer or for the recycling of the products. These represent real business cases for environmental actions. Three types of environmental business cases can be differentiated.
RESULTS AND DISCUSSION. This paper presents various examples where LCC is integrated into product design. However, there are a number of open issues in the implementation of LCC within real product development including data availability and uncertainty (future costs/savings), level of discounting, accounting and compensation. Various internal case studies done in the last years showed that already few changes in the costs structure can significantly affect the identified future costs.
RECOMMENDATION AND OUTLOOK. As a consequence, the resulting figures can only be seen as directional. The limits of LCC are considerable in particular if applied in the design stage. Therefore, the use of LCC in Design for Environment cannot be recommended without major restrictions in terms of guidance, experience/training. |
