11.

Life Cycle Engineering

Horst Krasowski
T-Systems, Competence Centre EDM, Debis Systemhaus Industry GmbH, Germany;
E-mail: Horst . Krasowski@t-systems. de

11.1. Introduction

This paper describes a Life Cycle Engineering approach which is able to optimise a product
from an integrated technical, ecological and economic point of view. It shows the method
and the importance of its integration into company business processes and IT landscapes.
Limits to the earth ' s ecological capacity and shortages of raw materials and energy
sources will determine the limits for growth and expansion in the future (Behrendt et al.,
1997). Enterprises have to face increasing costs emanating from use of resources, mate-
rials and waste, ecologically sensitive customers, and new environmental laws and
regulations such as the German Kreislaufwirtschaftsgesetz (Recycling Law). The implica-
tions of this are that our industrial world is liable to significant changes, and economic
growth will have to be re-directed in certain ways.
There is an increasing interest in the ecological impacts of products. Complex products
such as automobiles need effective methodologies and tools to evaluate their environ-
mental impacts without neglecting the technical and cost implications, and the conse-
quences of developing new products and services need to be analysed. Companies need
to have sound methods, and powerful tools based on them. Such methods and tools should
be used from the design phase onwards, in order to generate the best possible benefits
for both the company (especially cost savings) and the environment. For this purpose,
Life Cycle Engineering (LCE) offers a good method; it connects different angles from which
one should look at new developments and in particular, it involves technical, costing and
ecological points of view. Companies using LCE are able to save money and therefore
able to fulfil all demands on today's and future products and services.

11.2. Life Cycle Engineering (LCE)

This paper provides briefly defines LCE as it is used by Debis, then goes on to describe
the LCE methods and present an integrated LCE approach.
A range of different definitions of LCE can be found in any state-of-the-art literature
(e.g. Society of Automotive Engineers, 1998); however this paper will make its own def-
inition and description of LCE as used by Debis. LCE is used here to refer to the entire
product life cycle, going all the way from the design process, through product manufac-
turing and the use-phase, up to the end-of-life phase. The LCE target is product optimi-
sation, taking into account economic, ecological and technical requirements.
The main focus is the product development phase, in which the analysis of the entire
product life cycle should be taken into account. It is in the design stage that most of the
product ' s eventual ecological impacts are determined, as are most (80%) of the product
costs. The designers specify the kind of production processes as well as the amounts of
raw materials needed. Such decisions strongly determine what is going to happen during
the consumption of the product; for instance, the weight of a car which is decided during

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Developments, 153–157.
© 2002 Kluwer Academic Publishers. Printed in the Netherlands.
154 Environmental Management Accounting: Information and Institutional Developments

its design will influence its fuel consumption throughout its life. Likewise, during the end-
of-life phase, the possibilities to reuse or recycle the whole or parts of the product are
largely determined by the decisions made back in the design process.
Assessment of a product ' s life cycle is necessary, not only because of regulations that
may differ from country to country, but also to find more economic and ecological benefits.
For instance, it might be possible to optimise service and maintenance activities, or to
decrease the costs of removing manufacturing waste.
To do so, Debis considers that three distinct methods are capable of fitting into its
approach:
Life Cycle Assessment (LCA);
Life Cycle Costing (LCC);
Product Structure Assessment (ProSA).

Life Cycle Assessment (LCA)

The LCA method provides an overview of the ecological impacts of a product over its entire
life cycle. According to the international standard ISO 14040 (ISO, 1997) this method
contains 4 steps (see Figure 11.1).

Life Cycle Costing (LCC)

As there are no standards available, the LCC method is more complicated to define. The
literature provides several possible definitions (Zehbold, 1995; Wübbenhorst, 1984). This
paper refers to the definition of Fabrycky and Mize (1991), according to which Life Cycle
Costing is the economic assessment of all the money flows which are caused by the exis-
tence of a specific product. Fabrycky and Mize subdivided the ' Total System' Product Costs
into:
Research and Development Costs,
Production and Construction Costs,
 Life Cycle Engineering 155

Operation and Maintenance Costs and

Retirement and Disposal Costs.
The first step is to combine and calculate all the product-related costs during the phases
of production (Production Costs), use (Operation and Maintenance Costs) and end-of-life
(Retirement and Disposal Costs). Given the existing LCA method, Debis combines LCC
and LCA. Like material and energy flows, there are cost flows. Since its process approach
is based on LCA, Debis adopted Activity Based Costing to build up its calculation schemes.
A third important method, Product Structure Analysis, is used to assess a product ' s
features in terms of disassembly, recycling and reuse from the viewpoint of cost optimi-
sation. Product Structure Analysis gives the inputs for calculating the end-of-life costs
related to these activities.
As the application of the three afore-mentioned methods is complicated, it is neces-
sary to make use of different supporting tools. Numerous software tools are available
which support the user in a more or less user-friendly way, although almost all them are
' stand-alone' and cannot deal with more than one tool.

11.3. Integrated life cycle engineering method

The main requirement for an effective LCE is integration of the three LCE methods into
the business processes and incorporating LCE supporting tools into the existing IT-land-
scape.
To be widely accepted, every new method has to be part of the business processes of
a company, and this applies in particular to LCE. Therefore, the first step is that all relevant
business processes should be determined. This depends on the way a company uses the
whole dimension of the LCE method, and it is not necessarily appropriate for every
company that the complete method should always be applied in full – management must
decide in each case which of the three afore-mentioned methods will be implemented.
The next step is to look at all departments and in particular business processes which
should use LCE or be supported by LCE.
In accordance with the definition adopted, the product development process is seen
as the most important business process. As has already been observed, this process
accounts for most of the product's costs and environmental impacts. The designer deter-
mines what kind of production processes are involved and the materials inputs needed as
well as the functional qualities of the product. Likewise, there are business processes which
can be optimised by using LCE. These are, in particular, purchasing, product planning
and assembly, service and maintenance, and product disassembly and disposal. Indirect
processes such as environmental protection can also be supported with LCE.
The different processes have to be analysed in detail. For instance, one should find out
what design methods have to be used, who have to be involved, and what software
support is needed.
Product designers already have to meet many requirements, so to be persuaded to
accept another new method requires convincing arguments. This is possible only if they
see the challenges and the benefits of the method. Therefore, the designers as the main
user of LCE should be consulted when decisions have to be as to how to structure and
implement it.
The business process analysis shows where LCE should be applied. Later on new
processes can be analysed in the same way, indicating new opportunities for using LCE.
156 Environmental Management Accounting: Information and Institutional Developments

LCE integrated into the IT landscape

Connecting existing data and software systems allows an efficient use of LCE. This is
especially important for LCE, since most data relevant to LCE usually already exists some-
where within the company.
The product structure was laid down first as a drawing with a CAD tool and trans-
formed into a bill of materials, in either a CAD tool or in an Enterprise Resource Planning
(ERP) software system such as SAP. The product structure together with the CAD drawing
therefore form the first product-defining information during the early phase of product
development. Subsequently the work schedules are to be made, and based on these,
NC/CNC programs or work instructions.
The bill of materials (a list of needed materials) is the origin for almost all subsequent
processes such as calculation, purchasing, product planning and sales. Like methods such
as concurrent engineering or simultaneous engineering, LCE supposes a well-defined
development process. Therefore, EDM/PDM (Engineering/Product Data Management)
software support is a recommendable base. This enables all other relevant departments
of the company to work on this data. Although this is not really new, experience from
several different projects indicates that it can still be very difficult to realise in daily practice.
Different companies have different development processes and software tools. There
are two main systems which can manage the relevant data: EDM/PDM systems and ERP
Systems. Here, EDM/PDM systems are meant to serve as an integration platform for the
systems used in the development process. This implies CAD systems, materials manage-
ment systems or geometric information systems. Figure 11.2 shows the data-supplying
systems and the data-demanding systems, and also the important process of product
development.
Figure 11.2 gives a general outline of how integration of LCE in the IT landscape might
look, but the integration is not confined to this. Before this, the different methods used
 Life Cycle Engineering 157

for LCE have to be integrated, as has already been recognised by Debis IT Services
(Krasowski and Friedrich, 1998).
To sum up, on the basis of a product structure Debis determines the optimal disas-
sembly path and transforms it into the combined LCA and LCC software (Krasowski and
Friedrich, 1998). A product can be assessed under the three mentioned methods.

Limitation
At present not all the data that is needed for this needed data can be obtained directly
from data which has already been previously generated, so that the designers have to
enter more information into the LCE tool to receive the best results. Another problem is
data quality and timeliness. ' Data quality' refers to whether all data is available, applying
to the right material or the weight of a material or component. If a product analysis should
be done on different product versions and development phases, the timing of data
availability is also important, but this can be realised with some changes in the business
processes. The documentation of data, which is necessary for analysis later, should be
done as early as possible. The modelling of the needed data should be as user-friendly as
possible.

11.4. Conclusion

This paper described LCE as a method to assess and optimise a product over its life cycle
by means of LCA, LCC and Product Structure Analysis. To use LCE efficiently (both cost-
effectively and time-effectively) and to increase the value of a product, two aspects are
particularly important. LCE has to be integrated into both the company business processes
and into its IT landscape. Therefore, LCE software support is needed that enables the
company to integrate LCE into its processes and to combine the three basic methods of
LCE.