LCA in decision making

Transcription

1 LCA in decision making 1 (13) LCA in decision making An idea document CHAINET

2 LCA in decision making 2 (13) Content 1 INTRODUCTION 2 EXAMPLE OF AN INDUSTRIAL DEVELOPMENT PROCESS 2.1 General about the industrial decision process The research phase Prestudy of potential product concepts Preparation of product development projects Execution of product development projects Termination of product development projects 3 THE NEED OF ENVIRONMENTAL DECISIONS 3.1 Eco decisions in research 3.2 Eco decisions in product development 4 WHO IS THE PROBLEM OWNER 5 AFTER THE PROJECT - OPERATIONAL PHASE 6 THE FUTURE?

3 LCA in decision making 3 (13) 1 Introduction When LCA practitioners meet, as at Chainet workshop meetings, focus often move towards discussions of typical LCA method shortcomings. The activities start at the solution level (i.e. the LCA tool), even if it is not always clarified if there exist problems for these solutions, nor if there is any problem owners. But the problems are of course the environmental decisions that had to be taken in the industrial activities. With this report I would like to contribute to the network action by showing a typical product development process, and where environmental decisions might be taken, even if other approaches exists as well. When describing the development of LCA engagement at a typical industrial case, you might depict this as climbing up at the LCA maturing stairs. The first step is in a majority of times a case study. A case study is the easiest way to learn what LCA is all about. In LCA training s, case studies are often used by the same reasons. A well defined product or product system is analysed and presented. After this follows in general several case studies, to a certain level when the company move to the second step, the Database step. Perhaps after 1-3 years after the first case study. The Database step is when the company has reached a level where the LCA practitioners starts using older data and combine them into new combinations. This may just be done after having some time spend on data gathering through different case studies or by just buying already finished databases. The third step is mainly a result of external pressure. The time used for doing these case studies and for building databases will after a while be an issue for the economical control of the company. - Why are we doing this?, what shall all this data be used for?, could we spend our resources in a better way? This often results in a more practical view of the LCA method. The result must not only be an analyse but also point out a direction, give an advice. This is a tricky point and will be covered more later in this report. It is however often in the product or process design activities where the company put the efforts. It is probably easier to use LCA thinking in changing the product design compared to change production facility, or expand / exclude a special market due to environmental problems. But this depends on type of business. After the design - change- step there will be a fourth step based on an external attack again, but now from the marketing side of the company. - OK, now we know a lot, we have adjusted our product design, how could we communicate this to our customers? The issue looks more simple than it is in practical. It is mainly not clear what criteria or measures that should be communicated to the customers and still keep this scientific acceptable and confident. Some companies find the EPD, environmental product declaration as the best solution. Few companies has reached higher than that, the method is still young and a lot of things is still happening. However it might be a good guess that the fifth step,

4 LCA in decision making 4 (13) perhaps the top of the stairs, is to integrate LCA within the management systems at the company. It is important to consider that LCA activities as training, networks, workshops etc. will embrace companies situated at very different levels of the LCA maturing stairs, accordingly with very different topic on their LCA agenda. It will be confusing to participate in discussions regards issues at one level when your own company perhaps are at a lower or at a upper level. A proposal is that Chainet split into different forums, one forum for each step of the LCA maturing stairs and define what decisions are taken at this level, and how the tools might be used in this situation. As seen, I have ignored the fact that Chainet was supposed to cover environmental tools in general and not specifically just LCA. So far however, LCA has been the main tool discussed, and this report will mainly just consider this. Other tools do not necessarily follow the LCA maturing stairs principle. Environmental management systems for instance have other phases. 2 Example of an industrial development process 2.1 General about the industrial decision process The economical health of a company comes first. That is priority number one. In a market force driven society it must be like that. Any serious deviation from that direction does not exists in general. All activities must gain the business development of the company. One important part is to have a competitive product on the market. Behind such an effort exists a heavy product development activity. It might not always be of the type of innovation or product development of own conceptual ideas. Sometimes it might as well be to copy competitor concepts in an effective way and to present something better. This report will just cover product development in general and not consider the origin of the conceptual idea. In industry the majority of activities is handled as projects. This is often necessary depending on the economical control and budget work. The level of project skill differs a lot, from no organised activities to a special project culture with procedures and project leaders. This report will cover the later type. In general, product development projects follows a typical path, independent of project culture: The research phase A prestudy of potential concepts Preparation of a product development project Execution of a product development project Termination of a product development project

5 LCA in decision making 5 (13) Of course in smaller projects all these phases will not be explicitly pronounced, but integrated within each other. We will now go deeper in these project phases The research phase The company has an business idea, and it is important to install such organisational structure as to enhance a healthy economical development of the company. This means both for short term and long term planning of the company activity. In industrial activities there will at the same time exist several projects but running on different time schedule. The closer you get the product market launch the shorter lead time. In the earliest phase the research, we do not normally describe the activity as a project but more as a research programme. At this level it is not always clear what will become the result of the research and the targets are not that precise. Research may consider a special customer problem, but could also be a co-operation with a supplier to create new attractive versions on earlier product concepts. Environment is normally just one parameter among others, and a lot of other criteria s will be more important. For example the cost. The product must be able to produce and sell to a comfortable price. If the product segment is sensitive and under pressure of a detailed environmental debate, the green profile of the research might be higher. Companies however prefer taking green development steps in small proportions, instead of a big jump. It is less risky to introduce environmental improvements step by step. This might however conflict with the marketing possibility. A small step is not that easy to use in the public conversation. A research programme is often based on a certain amount of core competencies, skills needed to achieve a competent platform in the product development phase. It is not possible to put efforts on to many research areas, so even here will exist some limitations. The problem owners are accordingly the research managers. If the research programme is well defined, there will after a while be some concepts, materials, components etc. that looks encouraging to go further with. And if the organisation accepts these research results, they will be adopted by the product development groups Prestudy of potential product concepts This is the first step in the product development project. We have now left the research path. In this case the organisation works more specifically against a target, both regards conceptual idea and market launching time. At the prestudy level is formed a project team, with a team sponsor. The team will get an economical and time resource based frame work. Their target is to derive information from the research programmes together with market analyse for presenting ideas of new product concepts or versions. This includes to

6 LCA in decision making 6 (13) plan the execution phase, to define critical success factors for the project follow up. It is not unusual that a lot of limitations exists already at the prestudy phase. For example might market launching date in some cases be decided upon before the conceptual idea. The same is for the cost, it might be limits depending on consumer behaviour, competitors etc. that makes a demand on the new conceptual idea to keep cost level or decrease. In product development projects exists special deadlines or tollgates, borderlines where some decisions must be taken before going further : 1. A tollgate where a decision must be taken of which product concept that shall be developed further. It is based on some proposed concepts. 2. A tollgate where a decision must be taken regards what technology shall be used to produce the product. It is based on some technology proposals. 3. A tollgate where a decision must be taken regards a commercial plan. Price levels, manufacturing costs etc. It is based on a commercial plan proposal. 4. A tollgate where a decision must be taken regards a manufacturing plan. Production site, volumes, need of warehouses, need of process capacity etc. It is based on a manufacturing plan proposal. The team presents each of these proposals for a cross scientific steering committee, who finally takes the decision. The sponsor is a person that follows the team by distance but with the mission to be a support between the team and the steering committee during the project. When all tollgates are approved, the team will get a permission to move forwards, by getting new economical resources for the preparation phase Preparation of product development projects At this stage there is a basic plan for manufacturing, a commercial plan, technology and product concept are approved. The team might consist of same members as before but could also be changed into a new group. Now the decisions are more narrow, and the proposed path is supposed to be followed. This phase will also have some tollgates: 1. A decision of a preliminary project plan. 2. A decision upon an updated commercial plan. 3. A decision of an updated manufacturing plan. 4. Finally a decision of starting up the next phase by receiving a project execution order from the project sponsor

7 LCA in decision making 7 (13) Now the sharp phase of the project begin. It is not much more to add, this phase is mainly as the name says, a preparation before the execution phase. No major decisions is supposed to be taken but eventually some minor changes. However it is always a possibility that something unforeseen shows up, which then demands a restructuring of the project outline, in some cases it even might lead to a project stop Execution of product development projects This is the main part of a project, both regards time resource and economical resource need. The team follows the project plan and will work towards a definite product concept by test runs, co-operation with suppliers etc. In some cases models are build, and tested. Availability of technology must be tested, number of suppliers, delivery capacities etc. New technology equipment must be tested and delivery conditions must be analysed. Training of staff etc. Some tollgates might be considered: 1. A decision of updated project plan. Often extended time frames. 2. A decision of updated commercial plan. Often extended economical resource frames. 3. A decision on which documents that shall be stored and how the documentation shall be done. 4. A decision on an updated manufacturing plan. This is often depending on machine equipment deliveries, recommended initial test run time etc. 5. An updated project execution order from the sponsor, if everything is OK. 6. A decision point for a final project plan (not always possible). 7. A decision point for a final commercial plan (not always possible). 8. Decision on updated manufacturing plan. 9. Some decision points regards product and technology validation. 10. Decision regards labelling and advertising in the relation to the customer. 11. Updated project execution order again, from sponsor. Some of these decision points above will sometimes appear several times. Finally the product will be launched at the market following a new plan describing this activity. This is however often not anything that the project team deals with, but the sales organisation.

8 LCA in decision making 8 (13) In some special cases the project team might do some post research activities in following the product at the market for a while. Parts of the project execution team reorganises to a termination team. In some cases just the project leader and the sponsor Termination of product development projects Now is the time to close the project and sum up. Final report that describe the project, experiences etc. will be written. Some final measures will be done to see if the project targets was reached or not. Now the operational part of the organisation takes over. 3 The need of environmental decisions As seen in the earlier chapter, the industrial project activity is rather complex, and several decisions are taken depending on each other. More conceptual freedom exists mainly at the beginning but will be more and more limited the longer the project is running. At market launch everything is fixed. If a company wants to take a step towards sustainability, how is that done? First of all we must consider that the decisions are mainly based on economical reasons. This means the possibility to increase market shares, volumes, or earnings per product, then to decrease material and process equipment cost, decrease running costs and reasonable marketing need. This means that we have to translate sustainability into economical terms, for speaking the same language. Referring to the earlier description of the LCA maturing stairs, it is easy to see that the development of LCA and the product development chain have a cross point first when the LCA into product design step is reached. The economical integration with the LCA activity will after this increase. Companies not reaching this step, but just keep on doing case studies may finally end up in a internal crisis regards the LCA activity. A crisis that might lead to a decision to not go further with the LCA method. However some find it still useful as a training tool. LCA is just a tool, so the company has to define what sustainability means for the business, and how sustainability will affect the short term and long term business. At first thought you may think that sustainability always is a long term issue. But it is not that simple. A long term path might depend on partly unacceptable solutions when considering economic factors. So the company must adopt long term sustainable targets, that perhaps not will be possible to realise at the market before some time or when cost and availability for new materials or processes are in a reasonable level. During this time there might exists other directions, perhaps only half sustainable but nevertheless still an improved performance from the actual product concept point of view. In the mean time however the short term

9 LCA in decision making 9 (13) activities will control the market which again will delay the introduction of long term sustainable solutions. It is probably not a decision at company level, but at government level to create the right long term strategy conditions. Decision making within industry are in general of the type on/off. A criteria is set, and a certain successful level for this criteria. A control shall give yes or no regarding compliance to that criteria. Here we could find one of the reasons why environmental issues sometimes are looked upon with suspicious eyes. Environmental issues are at the moment mainly not of the on/off category and the answers are more in a grey zone. Industrial language doesn t like answers as perhaps or probably even if these type of answers in fact exists all the time. A certain environmental criteria that might be tested and measured giving the answer approved or not approved would be beneficial. How do we solve that with an LCA? Another question that we must consider is, what happens if we do not follow the advice given. If a calculation of the cost show us a certain level that preferably not must be increased for keeping an acceptable marginal for the product. Then this will most probably be a very effective borderline. If we do not consider that advice we might end up in a situation where we loose money. If we set a certain criteria for the production capacity, this will also be a effective criteria. If we fail produce the forecasted amount, this may change the whole economical picture, and again we loose money. What happens when we do not reach an environmental criteria? If it is legal demands behind the criteria it is one thing, but in LCA activities it is mainly not such demands. So we have a problem. A lot of companies are exactly at this point at the moment. They do LCA, but the advice given are ignored, or at least is used very briefly. Let us see where and how environmental decisions, or eco - decisions will appear in the industrial product development chain. 3.1 Eco decisions in research Environment may be a core competence but in general it is not. This is however acceptable due to that environmental issues preferably are integrated into all activities, for having a sustainable view. In research the programmes the activities are concentrated on new research objects, defined by criteria for function, cost, environment etc. When we use tools as LCA at this level there is most probably very little data available. In general, exact technology, supplier etc. is not known. But if we move up the LCA maturing stairs we should have a database from earlier LCA studies. We could combine that data, assume similarities etc. to predict, simulate and model future product concepts.

10 LCA in decision making 10 (13) It will however very seldom be any practical LCA activities done at this phase. What could be done is to implement Life cycle thinking. This could be achieved by using simple questions, that leads the researcher on what issues must be considered. Checklists grey, black, etc. are already in use within many industries. It is important to install Life cycle thinking as early as possible in the product development process. The earlier the better, and less cost to change a conceptual idea. Already at this level you could by simple questions avoid bad results in a LCA study later on. QFD, quality function deployment, is a method where you connect customer demands to certain product features to meet these demands. The method could be used in a serial of matrixes where every new matrix move the concept closer the final product. Customer demands is translated into product features, product features is translated into the need of process steps at manufacturing etc. But there is also a need for an easy key factor or criteria describing every transfer. For example, the customer demand hot coffee might be transferred to 50 C temperature as a product feature, and this in turn is transferred to a heating process step with a certain amount of installed power. There have been efforts to connect environmental issues to this picture, but in main cases it shows to be much to complex. Customers often express environmental friendliness as a demand but without defining this further. In a QFD case this must accordingly be transferred to a product feature, and that is not easily done. Environmental demands also has changed character during the latest years. The demand is not explicitly pronounced, but are important anyway. The customer in general more or less trust the companies and believe that an environmental care is taken anyway. NGOs however sometimes destroys this picture with their action programmes, which creates increased consciousness for a while. Typical eco decisions at this phase might be degradability, renewability, toxic substances in all life cycle phases, energy consumption, the use of scarce resources, composites and how to dismantle them as waste, the need of chemicals or environmental hazardous processes in all of the life cycle phases, distance to potential material or machinery suppliers, special market conditions, MSW procedures, energy or other resource use during the usage phase etc. 3.2 Eco decisions in product development As described earlier, now we are within the complex product development process. Here the environmental issues are as complex as other issues, and integrated to each other as well. If environmental conditions has not been considered before, we are now limited in choosing other alternatives, its to late make large changes. We must put together the puzzle with the parts we have. Here it is clear that an integrated environmental work are crucial compared to just creating a green product. We must consider the product system not just the

11 LCA in decision making 11 (13) product. The system solution must be optimal, nut just parts of the system. Here LCA seems to be the clear answer. No other method could give you the system picture. But still there is some unsolved problems. LCA is the clear tool in the mapping of the product system and its potential impacts. But when we come to the effective use of this mapping, it might be difficult to give a certain and precise answer how important the result is compared to other non environmental related issues. The earlier we could use the LCA in the product development chain the better. A screening LCA as good as possible might be done in the prestudy phase, to find suitable environmental criteria s. But remember, this might be a period of ½ up to approx. 1 year, so this screening LCA must be able to perform within this period perhaps 1-3 month. To be able to do this we must combine older data and assume a lot. How much could we rely on the final result? Might we perhaps be mislead to follow wrong direction? If we could solve these questions a tollgate for LCA could be set already at this level. In the preparation phase it is probably not necessary to install tollgates for LCA, if not major changes is done since the prestudy. In the project execution phase, again we might use LCA. Better data and knowledge of the product system will arrive the longer the project is running. It might be a certain level where enough information is given to make a LCA of better and more detailed structure than the earlier screening. Still this is an operative activity and you most probably have to do this within 1-3 month time again. The easiest way will probably be to just rebuild the screening LCA with better data and more competent models. If the same questions as in the prestudy could be solved we could have a tollgate here again. But we may also do it in another way. There are sub decisions of environmental character within all the decision points for the project plan, manufacturing plan and commercial plan. And the environmental parts might be integrated in that decision process. Still LCA will be the main information source for such decisions. Typical environmental decision points at this phase: Energy use at manufacturing, emissions to air and water from supplier manufacturing sites, type of power mix at the country where the manufacturing site is planned, transport distances between factory and suppliers and between factory and the market, process related waste amounts, supplier alternatives for a certain component / substance/material/process, the use of chemicals or other resources in the manufacturing process or at product usage, waste handling procedures and their impacts etc. In all items above, a decision must be taken and it will primarily not be based on environmental criteria unless in very special conditions. The planing of where to put the production plant will more depend on cheep energy, effective infrastructure and availability of competent labour with low salaries than the electric power mixture. It all will depend on who is taking the decision.

12 LCA in decision making 12 (13) 4 Who is the problem owner The problem owner is the one that cares about the decision point. It will be very different kind of people in different phases. A product developer will mainly not decide upon where a manufacturing site shall be planed. Staff at purchase department will not primarily decide upon product concepts and what materials shall be used, even if they probably may have input to that process. This makes the LCA activity a bit strange. If LCA shall be used by a product developer, it might be necessary to use an average location for the manufacturing site, otherwise this could give more impact on the LCA result than the design change by it self, and that will not give meaningful feedback to the product developer. But perhaps for the manufacturing management. If strategic success factors could be defined that indicate the companies environmental performance and these might be measured you have a good communication instrument in the internal and external dialogue. If sustainability is considered the awareness shall be broad. Much broader perspective than a company normally is used have. Normally local or regional considerations is preferred. With sustainability and a sort of product system awareness, you move globally. LCA takes a global perspective in general, and here we probably again have a methodological problem. The global nature of an LCA must be broken down to local considerations. If we cant solve this there will be hard to find a problem owner within a company in general, and those few managers who acts upon personal consciousness probably are in a minority. A company who pass the stairs up to step 5, integration phase, must find solutions for this. A scenario might be to use global LCA results measured by accepted key factors and break these down into local conditions and transfer this information at a local level. A local dialogue used as part of the companies marketing effort, image building. 5 After the project - operational phase When the product is launched into the market and the project is closed, the manufacturing organisation owns the decisions. Smaller changes could be done, and these are often planned as simpler projects. If LCA shall be used now it is really in a new and unusual shape. Ideas exists to connect instant information from several measure points in an industrial process to perform a sort of an instant LCA. Then you perhaps could adjust the process for low LCA impact. But this belongs probably still to the future. It might be wise to perform a large ordinary LCA as a consequence analyse how it all finally ended up into. At this moment the time schedule for this is mainly not that tight. This is a important post calculation that show us if our steering instruments are showing us the correct direction. The result will not change the

13 LCA in decision making 13 (13) actual product because its already in production, but will give an important input to next product development project. 6 The future? In the future, I just assume, we do not have this clear picture of the maturing stairs. Then it will be possible to buy data and predesign LCA models, already prepared in a standardised IT - format. So the start up time will be shorter. Some companies still don t want to perform LCA by them selves but just want the final advice. Special databases at Internet will be the solution for these companies. These databases works as expert programs, and the company has to answer a couple of questions and give some data about the product. The Internet program will reply with a written advice, not just in figures but an useful advice and perhaps also propose alternative solutions that will give better results. OK, who knows...?