Sustainable Operations Management (DOM403)

Sustainability and new

product design -II

Dr Sandeep K. Gupta (PhD, MBA, M.Tech)

Assistant Professor, SME, SNU
Life Cycle Ownership And Crossover Analysis
Blue Star is starting a new distribution service that delivers auto parts to the
service departments of auto dealerships in the local area. Blue Star has found
two light-duty trucks that would do the job well, so now it needs to pick one
to perform this new service. The Ford TriVan costs $28,000 to buy and uses
regular unleaded gasoline, with an average fuel efficiency of 24 miles per
gallon. The TriVan has an operating cost of $.20 per mile. The Honda CityVan,
a hybrid truck, costs $32,000 to buy and uses regular unleaded gasoline and
battery power; it gets an average of 37 miles per gallon. The CityVan has an
operating cost of $.22 per mile. The distance traveled annually is estimated to
be 22,000 miles, with the life of either truck expected to be 8 years. The
average gas price is $4.25 per gallon.

Total life cycle cost = Cost of vehicle + Life cycle cost of fuel + Life cycle operating cost

a) Based on life cycle cost, which model truck is the best choice?
b) How many miles does Blue Star need to put on a truck for the costs to be equal?
c) What is the crossover point in years?
SOLUTION
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Insights
 Honda CityVan is the best choice, even though the initial fixed cost and variable
operating cost per mile are higher. The savings comes from the better fuel mileage
(more miles per gallon) for the Honda CityVan.
 The crossover (break-even) point is at 95,012 miles, which indicates that at this
mileage point, the cost for either truck is the same.

If the cost of gasoline drops to $3.25, what will be the total life-cycle cost of
each van, the break-even point in miles, and the crossover point in years?
 End-of-Life Phase
 Products with less material, with recycled material, or
with recyclable materials all contribute to sustainability
efforts, reducing the need for the “burn or bury”
decision and conserving scarce natural resources.
 Innovative and sustainability-conscious companies are
now designing closed-loop supply chains , also called
reverse logistics.
 Firms can no longer sell a product and then
forget about it.
 From Assembly Lines to Green Disassembly Lines
A century has passed since assembly lines were developed to make
automobiles—and now we’re developing disassembly lines to take them
apart. So many automobiles are disassembled that recycling is the 16thlargest
industry in the U.S. The motivation for this comes from many sources,
including mandated industry recycling standards and a growing consumer
interest in purchasing cars based on how “green” they are.
New car designs have traditionally been unfriendly to recyclers, with little
thought given to disassembly. Some components, such as air bags, are hard
to handle and dangerous, and they take time to disassemble. However,
manufacturers now design in such a way that materials can be easily reused
in the next generation of cars. The 2015 Mercedes S-class is 95% recyclable.
BMW has disassembly plants in Europe, Japan, New York, Los Angeles, and
Orlando. A giant 200,000-square-foot facility in Baltimore (called CARS) can
disassemble up to 30,000 vehicles per year. At CARS’s initial “greening
station,” special tools puncture tanks and drain fluids and remove the battery
and gas tank. Then wheels, doors, hood, and trunk are removed; next come
the interior items; plastic parts are removed and sorted for recycling; then
glass and interior and trunk materials. Eventually the chassis is a bale and
sold as a commodity to minimills that use scrap steel. Reusable parts are
bar-coded and entered into a database. The photo shows an operator
controlling the car recycling plant.
Sustainable Operations Management (DOM403)

Sustainability and new

product design -II

Dr Sandeep K. Gupta (PhD, MBA, M.Tech)

Assistant Professor, SME, SNU
 Design for Environment strategies
 Raw material extraction and processing
◦ Design for resource conservation.
◦ Design for low‐impact materials.
◦ Design for biodiversity conservation.
 Manufacturing, packaging and distribution
◦ Design for cleaner production.
◦ Design for low‐impact packaging.
◦ Design for efficient distribution.
◦ Design for maintenance.
 Design for Environment strategies
 Product use
◦ Design for energy efficiency.
◦ Design for water conservation.
◦ Design for low‐impact use.
◦ Design for service and repair.
◦ Design for durability.
 End of life
◦ Design for reuse.
◦ Design for remanufacturing.
◦ Design for disassembly.
◦ Design for recycling.
Example: Life Cycle Assessment matrix in a
cement producer
 DFE Principles
1) Embed Life Cycle Thinking into the product development
process
◦ The creation of value for the shareholder must go hand in hand
with the creation of value for the stakeholder, with the
constant quest to exploit recovery opportunities and to seek
revalorisation in each phase of the process, as well as in
technological and management choices.
2) Evaluate the resource efficiency and effectiveness of the
overall system
◦ In this respect, the designer must be focused on actions that
favour eco‐effectiveness solutions, in addition to eco‐efficiency
solutions.
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3) Select appropriate metrics to represent product life cycle
performance
◦ It highlights the need to create performance measurement systems
that are consistent with sustainability goals and reliable reporting
systems has become widespread on a company level. For example,
the guidelines and business metrics developed by international
institutions as GRI – Global Reporting Initiative, or UN Global
Compact (GRI, 2015; UN GC, 2013).
◦ more extensive integrated reporting systems, as is the case in the
well‐known and widespread approaches developed with reference
to Balanced Scorecards (Kaplan and Norton, 1996, 2001)
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4) Maintain and apply a portfolio of systematic design strategies
◦ it is necessary to draw up and codify guidelines and to promote them
through training and education initiatives, paying careful attention that
they are applied systematically and correctly by designers.
◦ In various sectors, ad hoc design guidelines have been developed. One
of these sectors is construction, in which regulations and green
labels for the use of design and construction practices that are
environmentally friendly have been implemented for years, such as, for
example, LEED – Leadership in Energy and Environmental Design
Certification (USGBC, 2015); a further example is the use of different
Energy Labels, such as those used to define the different Energy
Efficiency Classes of domestic appliances.
Design for environment strategies,
guidelines and best practices
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DFE Principles…continue..
5. Use analysis methods to evaluate design performance and
trade‐offs
◦ the assessment of design for environment choices must be made
using methods and techniques that are capable of quantifying, or at
least rating in comparative terms, whether these choices fit with
design objectives.
◦ there are many methodologies used in the different phases, such as
checklists, like the one developed for NECTA Vending Solutions, the
European leader of drinks and food vending machines (Vezzoli and
Sciama, 2006), or scorecards, like the one developed by Wal‐Mart
to evaluate packaging alternatives (Souza, 2012, p. 70), or footprint
indices, like the ne used by Barilla to measure impact in terms of
water consumption and CO2 emissions (Barilla, 2015).
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6. Provide software capabilities to facilitate the application of DFE
practices
◦ The development of complex projects that ought to keep countless
variables under control, on the one hand, and the need to
accumulate specific know‐how in appropriate repositories and
knowledge‐sharing systems, on the other hand, have led to software
applications that can be used during the design, testing and
simulation phases, such as the CAD/CAE – Computer Aided
Engineering and Computer Aided Design systems, as well as the
technical, economic and financial assessment phases.
◦ The growth in prototype technology and modelling based on 3‐D
printing applications and additive manufacturing has also opened
new frontiers in the design of complex parts, minimising the use of
materials.
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7. Seek inspiration from nature for the design of products and
systems
◦ for example, the structure of a beehive, made up of perfectly
combined hexagons and often used in honeycomb structures, which
has the characteristic of minimising the use of material by
guaranteeing adequate levels of resistance, or the perfect shape of a
water droplet that takes its form as a result of the resistance of the
liquid to air, which has inspired aerodynamic solutions.
◦ From the perspective of environmental sustainability, the greatest
lesson shared by nature is, as already stated, that ‘waste is food’ for
subsequent biological cycles, and it is precisely this that designers
must draw their inspiration from.
Design for Environment implementation
process