Integrating LCIA and LCM: Evaluating environmental performances for supply chain management Alan...

Integrating LCIA and LCM:Integrating LCIA and LCM:

Evaluating environmental performancesEvaluating environmental performancesfor supply chain managementfor supply chain management

Alan Brent Chair: Life Cycle Engineering Department of Engineering and Technology Management University of Pretoria Tel: +27 12 420 3929 Fax:+27 12 362 5307 E-mail: abrent@eng.up.ac.za

Foundations of LCE at UPFoundations of LCE at UP

Provincial government initiatives / support

Engineering and Technology Management

LCM & SHE

Decision support

Automotive / manufacturing industry

Business school

Integration of the LCE activities in the Automotive Integration of the LCE activities in the Automotive Focus Group (AFG) of UPFocus Group (AFG) of UP

Chair in Life Cycle Engineering

Chair in A

utomotive

Manufacturing

Cha

ir in

Aut

omot

ive

Eng

inee

ring

Total engineering and management support of the SA

automotive industry

The automotive industry as a major exporter of The automotive industry as a major exporter of South African productsSouth African products

Components

Vehicles

The main destinations of the component exportsThe main destinations of the component exports

Component manufacturers

• 74 % to Europe (46 % to Germany)• 10 % to North America

• Catalytic converters (26.6 %)• Stitched leather seat covers (19.5 %)• Tyres (6.6 %)• Exhaust systems (6.2 %)• Wheels (mostly aluminium) (5.4 %)

Future trends in the responsibility of industryFuture trends in the responsibility of industry

Today

Industry'sResponsibility

Tomorrow

Yesterday

ProductManufactur

ing

ProductUse

ProductRetirement

Tec

hnol

ogy

Cos

ts

Org

aniz

atio

n

Env

iron

men

t P

rote

ctio

n

Per

form

ance

End

uran

ce

Eco

nom

ic E

ffic

ienc

y

Env

iron

men

t P

rote

ctio

n

Rem

anu

fact

urin

g

Rep

roce

ssin

g

Less

Inc

ine

ratio

n

Less

Lan

dfill

Dis

posa

l

Present Challenges:

ProductTake BackRegulations,Recycling,Work place

Future Challenges:

Life CycleEngineeringObligations,Recyclability (waste)and Climate ProtectionDeclarationsWork place (new age)

Incorporating sustainable development concepts Incorporating sustainable development concepts into management practicesinto management practices

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs

Adopting business strategies and activities that meet the needs of the business and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future

Su

sta

inab

le d

ev

elo

pm

en

t

Business management incorporation

Economic considerations

Social considerations

Environmental considerations

Three life cycles that are fundamental to Three life cycles that are fundamental to management in the manufacturing industrymanagement in the manufacturing industry

Project life cycles – drivers of internal change

Asset life cycles – optimise internal operations

Product life cycles – profit generation of operations

Pre-feasibility Feasibility Development Executing & testing

Project launch & PIR

Pre-manufacture

Operation & manufacture

Product usage

Product disposal

Detailed design

Commission Operation & Maintenance

De-commission

Detailed design

Commission Operation & Maintenance

De-commission

Pre-feasibility

Feasibility Develop Execute & testing

Launch

Product usage

Product disposal

Pre-manufacture

Project life cycle

Product life cycle

Assetlife cycle

Application of the LCE approach for different Application of the LCE approach for different management requirementsmanagement requirements

Product

Asset

Maintenance

Project

Investment

Waste

X Life Cycle Management

Sustainable supply management within the Sustainable supply management within the integrated Life Cycle Management approachintegrated Life Cycle Management approach

Integrating with existing management practices• Environmental management

• Quality management

• Logistics management

• Procurement management

• Maintenance management

Understanding the value/burden

addition of suppliers• Added economic value

• Added environmental burdens

• Social?

Operation & Maintenance

Pre-manufacture

Accumulated value and burdens of manufactured Accumulated value and burdens of manufactured products (environmental burdens example)products (environmental burdens example)

Total burden

Internal manufacturing burden

External manufacturing burden

Su

pp

lier

sS

up

pli

ers

Fac

ilit

y Second-tier

First-tier

Sustainable supply chain management therefore Sustainable supply chain management therefore focuses on environmental performancesfocuses on environmental performances

Total burden

Internal manufacturing burden

External manufacturing burden

Su

pp

lier

sS

up

pli

ers

Fac

ilit

y Second-tier

First-tier

Problems with assessing environmental Problems with assessing environmental performances (from an OEMs perspective in SA)performances (from an OEMs perspective in SA)

Lack of detailed environmental data in developing countries• Precise environmental impact causes can not be determined

Smaller supplying countries in developing countries have only limited process information

• Only certain process information is currently (systematically) obtained by OEMs in South Africa

– Water usage– Energy usage– Waste produced (for land filling)

Comparing environmental performances• Valuated comparisons from an OEMs perspective

True reflection of environmental burdens in the South African context

Assessing environmental performances from Assessing environmental performances from limited process parameterslimited process parameters

Waste produced

Energy usage

Water usage

Determining environmental

impacts

Environmental performance in the SA context

?

Assessing environmental performances from Assessing environmental performances from limited process parameters (using ISO 14040)limited process parameters (using ISO 14040)

Waste produced

Energy usage

Water usage

Environmental performance in the SA context

SA-specific LCI SA-specific LCIA

Water extraction

Electricity

Raw materials

Steam (on-site)

Liquid fuel

Med.-classified

Waterresources

Airresources

Landresources

Mined abioticresources

Assessing environmental performances from Assessing environmental performances from limited process parameters (SA-specific LCIA)limited process parameters (SA-specific LCIA)

Waste produced

Energy usage

Water usage

Environmental performance in the SA context

Midpoint cat. Resource groups

Waterresources

Airresources

Landresources

Mined abioticresources

Water Use

Eutroph. Pot.

Acidif. Pot.

POCP

ODP

GWP

HTP

ETP

Land Use

Mineral Depl.

Energy Depl.

The impacts on the resource groups must reflect The impacts on the resource groups must reflect the variance in the SA eco-regionsthe variance in the SA eco-regions

Introduced SALCA Regions for impact assessment Introduced SALCA Regions for impact assessment of natural resource groupsof natural resource groups

Environmental resources data compiled for these Environmental resources data compiled for these SALCA RegionsSALCA Regions

Water quality and quantity• Measurement data of key pollutants

– Metals, organics, sulphates, etc.

• Maximum yield and usage

Regional and global air impacts• Ambient measurement data in major metropolitan areas

• CO2 and CFC-11 measurement data (all regions)

Land quality and quantity• Measurement data of key pollutants

– Metals, phosphates, etc.

• National land cover database– Land uses, types, etc.

Mined abiotic resources• Platinum reserves (national level)

• Coal reserves (national level)

Am

bie

nt targ

ets

to p

rote

ct re

so

urc

es, h

um

an

he

alth a

nd

e

cos

yste

ms

Calculation of Resource Impact Indicators (per unit Calculation of Resource Impact Indicators (per unit of process parametersof process parameters

C X

CCCXG SNCQRII

RIIG = Resource Impact Indicator calculated for a main

resource group through the summation of all impact pathways of LCI constituents

QX = Quantity release to or abstraction from a resource of

life cycle constituent X of a LCI system in an impact category C

CC = Characterisation factor for an impact category (of

constituent X) within the pathway

NC = Normalisation factor for the impact category based on

the ambient environmental quantity and quality objectives, i.e. the inverse of the target state of the impact category

SC = Significance (or relative importance) of the impact

category in a resource group based on the distance-to-target method, i.e. current ambient state divided by the target ambient state

NormalisationNormalisation of RII performances of companies of RII performances of companies with economic value of products (to OEMs)with economic value of products (to OEMs)

Mined abiotic

Water Air Land Mined abiotic

Water Air Land

Normalisation with economic values of products (to OEMs)

Case study: Case study: Process parameters obtained from a Process parameters obtained from a South African OEM’s first-tier suppliersSouth African OEM’s first-tier suppliers

Energy usage• Electricity MJ• Liquid fuel (diesel) kg• Steam kg• Raw materials kg

Water usage kg

Waste produced kg

Economic valued R

Windscreena TyreaFuel tanka

63.70.00.00.0

60.50.00.0

2.0b

234.10.0

20.40.0

4.6 176.8 20.5

0.1 32.0 1.0c

1000.00 1460.00 500.00

a Process parameters are shown per supplied componentb Natural gas for furnace operationc 10% assumed lossesd 9 South African Rand is equal to approximately 1 Euro (€)

RII values calculated per supplied componentRII values calculated per supplied component

Water resources

Air resources

Land resources

Mined abiotic resources

Windscreena TyreaFuel tanka

2.882×10-1 2.779×10-1 1.067×100

6.535×10-3 6.206×10-3 2.406×10-2

6.148×10-5 6.113×10-5 2.271×10-4

3.222×10-5 4.051×10-5 1.271×10-4

RII values calculated per supplied component (per RII values calculated per supplied component (per economic value or South African Rand)economic value or South African Rand)

1.000E-08

1.000E-07

1.000E-06

1.000E-05

1.000E-04

1.000E-03

1.000E-02

1.000E-01

1.000E+00

Water Air Land Mined abiotic

Fuel tank

Windscreen

Tyre

Conclusions from the case studyConclusions from the case study

The supplied tyre has the highest overall environmental burden per Rand value

• In the order of a factor of 10 compared to the fuel tank and windscreen

However, a supplied tyre has an economic value of half to a third compared with the fuel tank and windscreen

• The ratio difference between environmental burdens associated with the complete components would therefore be smaller

Conversely five tyres are supplied per manufactured automobile, which would increase the environmental burdens (and total cost to the supplier) by a factor of five

• For the specific studied sedan

But, only the manufacturing processes of the first-tier suppliers were investigated and compared

• Environmental performances of second- and subsequent tiers are required for an overall product evaluation

Determining an overall Environmental Performance Determining an overall Environmental Performance Resource Impact Indicator (EPRII)Resource Impact Indicator (EPRII)

Water resources

Air resources

Land resources

Mined resources

)company(EPRII

weighting Decision analysis procedures

Analytical Hierarchy Procedure (AHP) to determine Analytical Hierarchy Procedure (AHP) to determine weighting factors for the resource groupsweighting factors for the resource groups

Criterion 1 Criterion 2

Equally

importantStr

on

gly

mo

re

imp

ort

ant

Ext

rem

ely

mo

re

imp

ort

ant

Extrem

ely mo

re im

po

rtant

Stro

ng

ly mo

re im

po

rtant

Air Water

Air Land

Water Land

Water

AbioticAir

Abiotic

AbioticLand

Importance Importance

AHP survey results and national government AHP survey results and national government expenditure trends on the natural resource groupsexpenditure trends on the natural resource groups

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

AR WR LR MR

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

Fraction of national expenditure allocated to environmental issues

Distribution of relative weighting values obtained from individual judgements

Mean (geometric) relative weighting value obtained for the environmental criteria

Hypothetical overall EPRII for a supplier based on Hypothetical overall EPRII for a supplier based on a comparison with another supplier (baseline)a comparison with another supplier (baseline)

Mined abioticresources

Landresources

Airresources

Waterresources

-1 10

EPRII

+1 ww (0.45)

-1 wa (0.20)

+1 wl (0.25)

0 wm (0.10)

Incorporating sustainable development concepts Incorporating sustainable development concepts into management practicesinto management practices

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs1

Adopting business strategies and activities that meet the needs of the business and its stakeholders today while protecting, sustaining and enhancing the human and natural resources that will be needed in the future2

Su

sta

inab

le d

ev

elo

pm

en

t

Business management incorporation

Economic considerations

Social considerations

Environmental considerations

South African on-going LCM activitiesSouth African on-going LCM activities

Closure and questionsClosure and questions