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Cost Drivers Learning Event, 2 nd November 2005 Presented by Gareth Coates End-of-life costing within the automotive sector.

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Presentation on theme: "Cost Drivers Learning Event, 2 nd November 2005 Presented by Gareth Coates End-of-life costing within the automotive sector."— Presentation transcript:

1 Cost Drivers Learning Event, 2 nd November 2005 Presented by Gareth Coates End-of-life costing within the automotive sector

2 Cost Drivers Learning Event, 2 nd November 2005 Contents Research background Why is EOL costing becoming important? Stakeholders & Contemporary market drivers Development of the End-of-life cost model Decision support based on the model

3 Cost Drivers Learning Event, 2 nd November 2005 Research background To create a cost oriented decision support for the recovery of the most amount of end-of-life value while at the same time meeting the legislative requirements. Research Aim 2 year ESPRC funded project 5 industrial collaborators Value recovery is focused at the automotive sector (End-of-life Vehicles = ELVs) Research to form the basis for PhD

4 Cost Drivers Learning Event, 2 nd November 2005 - On average 2.1 million vehicles are scrapped in the UK every year [SMMT Ltd, 2000], of which :- 1,500,000 million are natural ELVs 400,000 crashed/premature write-offs. 200,000 are abandoned vehicles Problem or opportunity ? - EU legislation becoming increasingly prevalent Landfill Directive Waste Electronic and Electrical Directive Waste Incineration Directive End-of-life Vehicles Directive…

5 Cost Drivers Learning Event, 2 nd November 2005 EU Directive (Summary)U.K. regulations (Summary) The banning of environmental detrimental substances. Dismantling information made available. Supply chain software to check vehicle material composition (IMDS). Dismantling info made available (IDIS). Recovery rates will be monitored by assumed metallic fraction from shredding trials. (e.g. 70% metal recovered only the extra 10% needs to be measured) All scappies (ATFs) to be regulated by the Environmental Agency. Manufacturers to create an own-marquee collection network. The recycling and recovery of 95% of a vehicles weight (85% recycling) by 2015. The recycling and recovery of 85% of a vehicles weight (80% recycling) by 2006. The establishment of standards for the storage, treatment and de-pollution. The collection and processing of ELVs at no cost to the last owner.

6 Cost Drivers Learning Event, 2 nd November 2005 37 shredder sites run by 8 companies Vehicle shredded Magnetic separation Eddy current separation Approx 72% recovered through ferrous content 4 dense media separation plants 4% of shredded material separated by density 24% waste, mostly landfilled 995 Registered Authorised Treatment Facilities (ATFs) in the UK Certificate of Destruction (CoD) issued Car de-polluted Some manual disassembly for part reuse

7 Cost Drivers Learning Event, 2 nd November 2005 Scrap metal value - Easy separation process - High export value - Low logistical cost Spare parts market - Non-existent for natural ELVs - Market struggling De-pollution costs - High labour cost - Low resale value Auto plastics value - High labour cost - High purity required - Lack of processing routes Landfill tax - Slowly rising - Relatively low compared to EU Plastic recovery Non-ferrous scrap Ferrous scrap Tier 1 Manufacturer Sales User ATF Shredder Non-ferrous recoverer Reuse Mechanic / Hobbyist Tier 2,3… Reconditioning Materials reprocessors Landfill sites Incineration sites Other value chains Plastic / Aggregate Shredder Residue Contemporary market drivers

8 Cost Drivers Learning Event, 2 nd November 2005 Cost model development The development of an holistic End-of-life activity map for the automobile Understand and modelling of the Direct and Indirect vehicle processing costs The influence of materials, parts and waste management markets The inclusion of estimate uncertainty within the model Validation of the model via appropriate case study data Tailored viewpoints to suit the user Effective decision-support to improve value recovery Model requirements

9 Cost Drivers Learning Event, 2 nd November 2005 VEHICLE DISMANTLERS (Authorised Treatment Facility) Collection & documentation processing De-pollution Part-removal & recycling Crushing & transportation Storage & movement Last user Hulk Fragmenting Air-classification, magnetic separation, Eddie current separation, Manual separation Part sale (Reuse/reconditioning) Materials recycling markets Waste materials costs and markets SHREDDERS Ferrous scrap market Non-ferrous scrap market DENSE-MEDIA SEPARATION Landfill Density separation, Eddie current separation, Manual separation, imagine recognition

10 Cost Drivers Learning Event, 2 nd November 2005 Activity Based Costing (ABC) Time studies Parametrics Theoretical separation model

11 Cost Drivers Learning Event, 2 nd November 2005 VEHICLE DISMANTLERS (Authorised Treatment Facility) Collection & documentation processing Crushing & transportation Storage & movement Last user Hulk Fragmenting Part sale (Reuse/reconditioning) Materials recycling markets Waste materials costs and markets SHREDDERS Ferrous scrap market Non-ferrous scrap market DENSE-MEDIA SEPARATION Landfill De-pollution Part-removal & recycling Air-classification, magnetic separation, Eddie current separation, Manual separation Density separation, Eddie current separation, Manual separation, imagine recognition

12 Cost Drivers Learning Event, 2 nd November 2005 + Last Owner ELV dropped off - Vehicle storage (2.3.2.0) Documentation processing (2.2.0.0) Abandoned vehicles Merchant networks Accident damaged B1 + A2 - A1 Address, V5 and identification of last owner collected, de-registered and CoD issued (2.2.2.0) VIM located on vehicle (2.2.1.0) ELV weighted & assessed (1.4.0.0) ATF collects (1.0.0.0) Journey in (1.3.0.0) Vehicle loading (1.2.0.0) Journey out (1.1.0.0) Buy-back of vehicle (1.5.0.0) ATF processing (2..0.0.0) Vehicle moved for processing (2.3.0.0) Vehicle unloading (2.1.0.0) Vehicle moved (2.3.1.0) = Cost or revenue (when money exchanges hands to someone outside the boundary of the operation) = Process or materials description = Processing route = Sub-task processing route

13 Cost Drivers Learning Event, 2 nd November 2005 De-pollution As required under EU directive. (2.4.0.0) Crushing / Compacting Compacting of the vehicle (2.7.0.0) Transportation to shredders Tipper used to transport (2.8.0.0) + - B2 - B6 + B7 - B8 + B5 - Vehicle moved for processing (2.3.0.0) Vehicle assessment & prep (2.4.1.0) Operation identification (2.4.1.1) Filler caps opened (2.4.1.2) Battery removed (2.4.2.0) Top accessible fluids removed (2.4.3.0) Tyres removed (2.4.4.0) Coolant removed (2.4.3.1) Washer-fluid removed (2.4.3.2) Brake-fluid removed (2.4.3.3) Steer-fluid removed (2.4.3.4) AC-fluid removed (2.4.3.5) + - B3 Place on rig (2.4.5.0) Bottom accessible fluids removed (2.4.6.0) Petrol removed (2.4.6.1) Engine oil removed (2.4.6.2) Gearbox oil removed (2.4.6.3) Dif oil removed (2.4.6.4) + B5 - Catalytic removed (2.4.7.0) Wheel de-rimming (2.4.4.1) Pb weights removed (2.4.4.2) + - F1 + - B4 Remove from rig (2.4.8.0) Air-bag deployment (2.4.9.0) Removal of hazardous substances from the vehicle (2.4.A.0) Vehicle moved for bailing (2.6.0.0) Journey in (2.8.3.0) Journey out (2.8.2.0) Tipper loaded (2.8.1.0) Vehicle moved (2.3.1.0)

14 Cost Drivers Learning Event, 2 nd November 2005 De-pollution time study costing

15 Cost Drivers Learning Event, 2 nd November 2005 Documentation processing (2.2.0.0) De-pollution As required under EU directive. (2.4.0.0) Parts/Material dismantling Opportunity for parts removal, if non hulk moved straight to bailer. (2.5.0.0) Crushing / Compacting Compacting of the vehicle (2.7.0.0) Address, V5 and identification of last owner collected, de-registered and CoD issued (2.2.2.0) VIM located on vehicle (2.2.1.0) + C2 + C1C1 + C3 Vehicle moved for processing (2.3.0.0) Vehicle unloading (2.1.0.0) Vehicle moved for bailing (2.6.0.0) Assessment of dismantling (2.5.1.0) Hulk unloading (2.7.3.0) Vehicle loaded (2.7.1.0) Removal of resale parts (2.5.2.0) Catalogue part (2.5.2.2) Remove part (2.5.2.1) Store part (2.5.2.3) Removal of material (2.5.3.0) Removal of reconditioning parts (2.5.4.0) Dismantling assessment information gathered (2.5.3.1) Destructive disassembly (2.5.3.2) Sorting of materials (2.5.3.3) Catalogue part (2.5.4.2) Remove part (2.5.4.1) Store part (2.5.4.3) Compaction (2.7.2.0) Transportation to shredders Tipper used to transport (2.8.0.0) ATF processing (2..0.0.0)

16 Cost Drivers Learning Event, 2 nd November 2005 Parametric estimating of material removal costs

17 Cost Drivers Learning Event, 2 nd November 2005 + Eddy current separation ASR-Light further separated ( 3.5.0.0) Waste stream transport (3.3.1.0) D1 Magnetic separation Ferrous and non-ferrous content separated. (3.4.0.0) Non-ferrous content Ferrous content Cyclone separation Ferrous and non-ferrous content separated. (3.3.0.0) Manual separation Picking line removes non- metals (3.6.0.0) - E1 F1 Tipper weighted (2.9.0.0) Hammer Mill 90t/h-180th input feed rate (3.2.0.0) Organic. Earth/Dirt Material processing (3..0.0.0) - Loading Mill (3.2.1.0) Feed control (3.2.2.0) Waste stream transport (3.2.1.0) Waste stream transport (3.3.2.0) SR heavy fractionSR light fraction Waste stream transport (3.4.1.0) Waste stream transport (3.4.2.0) Assessment (3.6.1.0) Manual sort (3.6.2.0) Waste stream transport (3.6.3.0) Waste stream transport (3.5.2.0) Waste stream transport (3.5.1.0) Journey in (3.7.3.0) Journey out (3.7.2.0) Tipper loaded (3.7.1.0) - E1

18 Cost Drivers Learning Event, 2 nd November 2005 Processing routes vary from facility to facility Different makes/types of machines have varying separation capabilities Separation capabilities of a machine is dependent on the waste stream placed through it. Industrial data on separation processes is difficult to obtain The value of recovered materials from the SR is highly dependent on its contamination Post-fragmentation cost modelling Problem Solution A typical based model established Basic material characteristics used to indicate theoretical separation Process efficiencies (i.e. recovery & grade) can be set E.g. Eddy-current separation

19 Cost Drivers Learning Event, 2 nd November 2005 What potential uses are there for this recovery chain cost model?

20 Cost Drivers Learning Event, 2 nd November 2005 Mass = Material Removal Rate Time

21 Cost Drivers Learning Event, 2 nd November 2005 Mass x Value = Value Removal Rate Time Labour rate: 15k/annum @ £7:20/h = 0.002 £/s

22 Cost Drivers Learning Event, 2 nd November 2005 1.2 Automatically updated with information 1.5 Cost analysis of operations and returns (make and model specific) 1.1 Documentation processing via live DVLA web-link 1.4 Make and model checked against parts request database and past sales data 1.3 Live local, national and global materials purchasing prices 1.6 Revenues, costs, work throughput and compliancy can be indirectly measured by the ATF if required

23 Cost Drivers Learning Event, 2 nd November 2005 Summary Manufacturer producer responsibility has dramatically reformed the recovery chain EU directive implemented at a time when ELVs are viewed as valuable resource The long term stability of contemporary market drivers can not be guaranteed Hence… An economic understanding of the current recovery chain is paramount The model described accounts for indirect and direct costs to all stakeholders Micro and Macro functional viewpoints possible once a base model is established Value improvement via decision-support can be most appropriately selected Questions ?


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