Auto Sector Life Cycle Management Methodology Presented by William E. Franklin and Beverly J. Sauer

Franklin Associates Background Leading US LCI practitioners, over 30 years in business Developed cost-based LCM methodology with auto company, numerous case studies on automotive parts, fluids, etc. Developed LCA/LCM methodology integrating cost and environmental components; conducted case studies; presented at Copenhagen LCM conference

Franklin Associates Cost-based LCM Methodology Based on cost because this is the primary driver for business decisions Uses life cycle systems thinking to identify all related direct and indirect costs Identifies all cost driver differences between alternatives – Direct costs: piece part costs, tooling, etc. – Hidden EHS&R costs: training, permitting, protective equipment, disposal costs, potential liability, etc.

Franklin Associates Cost-based LCM Methodology (continued) Spreadsheet format guides user through thought process to identify areas for further analysis; spreadsheet also set up to accept cost data. Can accommodate other decision drivers (environment, performance, etc.)

Proposed Auto Sector LCM Methodology Adaptation of cost-based LCM Comparative analysis between design alternatives Evaluate only areas where there are differences between alternatives, based on information provided by suppliers

Proposed Auto Sector LCM Methodology (continued) Make decision based on prioritized importance of driving factors: – Cost – Environment – Quality/performance (over and above basic requirements)

Information Provided to Decision Maker by Supplier(s) Price Weight of part Material composition – Identify component material(s) by weight percent – Recycled content – Hazardous/restricted material content

Information Provided to Decision Maker by Supplier(s) (continued) Identify any special handling, storage, labeling requirements Describe recyclability/disassembly/dismantling Mechanical properties, relevant test results, etc. Other?

Decision Drivers: Cost Direct costs include piece part price, tooling, labor Indirect or “hidden” costs – Include all relevant EHS&R issues – Use life cycle systems thinking: consider costs associated with product acquisition, assembly, product use, and end of life

Decision Drivers: Cost (continued) – Cost and environmental aspects often linked; for example, a part that is more energy-intensive to produce or that requires special management because of hazardous substances is likely to be more expensive.

Decision Drivers: Environment Use materials with the lowest environmental burdens Reduce weight and improve fuel economy Increase recycled content Eliminate hazardous/restricted substances

Decision Drivers: Environment (continued) Increase recyclability – Improve ease of dismantling and separation for recycling/reuse of parts & materials – Reduce the number of materials used – Improve material compatibility for recycling

Decision Drivers: Performance Durability Reduced maintenance Quality improvement (improved appearance, reduced noise, etc.)

Proposed Auto Sector LCM Approach Step 1: Screening Use life cycle systems thinking (spreadsheet tool) and information provided by suppliers to identify all relevant areas where differences exist between alternatives: – Cost – Environment – Performance

Proposed Auto Sector LCM Approach Step 2: Qualitative Comparison Conduct qualitative analysis, e.g., rank each alternative “higher” or “lower” in each area of difference Evaluate relative importance of different drivers in making decision – Results may conflict; for example, a part specially designed for easy dismantling may be more expensive to produce Decision may be possible at this point

Proposed Auto Sector LCM Approach Step 3: Quantitative Comparison If decision cannot be reached based on qualitative analysis, conduct further analysis as necessary to reach decision: – Quantify costs – Use LCI/LCA to quantify environmental burdens – Conduct product testing, etc.