Theses

Emblemsvåg, J. (1995). Activity-Based Costing in Designing for the Life-Cycle, Master of Science Thesis, George W. Woodruff School of Mechanical Engineering, Georgia Institute of Technology, Atlanta, Georgia, USA.

Summary: Politicians and consumers around the world have become increasingly aware of environmental problems. New legislation has therefore been posed, e.g., car manufacturers in Germany face legislation that will force them to take back cars for recycling. This increased trend of tougher legislation makes it necessary to design products for reuse and recycling. However, today recycling and reuse are technically feasible for most products, but not economically. What is needed is a method for assessing and tracing costs with respect to design changes for the entire life-cycle of a product. In addition, the method has to handle uncertainty since this is always present in design.

In this thesis, cost assessment models for use in Life-Cycle Design based on Activity-Based Costing (ABC) are presented. The inherent uncertainty is handled by employing a numerical simulation technique – the Monte Carlo simulation technique – to simulate the behavior of the model when the uncertainty is modeled in terms of fuzzy numbers. Several case studies are provided; ranging from a high level life-cycle model for the conceptual design of a handicap vehicle to a detailed demanufacturing model for a variety of products, like telephones and cars. More specifically, the following issues are addressed in the thesis:

  • The design of efficient and effective ABC models for usage in the various phases of product design.
  • The ability to trace and identify the product and process parameters that contribute the most to the costs and revenues.
  • The modeling of uncertainty in product and process parameters in the cost models.
  • The application of the approach in the design for demanufacturing of telephones and cars, and in the conceptual Life-Cycle Design of a handicap vehicle.

Based on the results, we have found that our method is versatile, and indeed can be used to trace and estimate costs effectively. The results from the cost models are comparable with real-life findings.

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Emblemsvåg, J. (1999). Activity-Based Life-Cycle Assessments in Design and Management, Ph.D. Dissertation, George W. Woodruff School of Mechanical Engineering, Georgia Institute of Technology, Atlanta, Georgia, USA.

Summary: The increasing environmental problems have made many realize that our stewardship of the planet is not sustainable. New avenues of stewardship are therefore being explored. One such avenue is Life-Cycle Assessments (LCA), which can be defined as an approach to assess the environmental impact throughout the life-cycle of a product system. However, none of the current LCA methods yield comparable results, something industry demands, to mention one problem. To remedy this unfortunate situation, we design a different LCA method that yields comparable results. Unlike the International Standards Organization and other prominent bodies for LCA research, we utilize modern cost management practices and expand them to handle environmental impacts in terms of energy consumption and waste generation because energy consumption and waste generation complement costs. Waste generation is related to the efficiency of which materials are converted into useful artifacts and services, while energy consumption is a measure of how efficient this conversion is in terms of energy. We believe that environmental issues not captured by energy consumption and waste generation must be decided upon wisely from case to case because they cannot be accounted for accurately. With these ideas in mind we designed 1) a new LCA method called Activity-Based LCA and 2) a new environmental indicator called the Waste Index (WI).

Activity-Based LCA can in many ways be viewed as an extension of Activity-Based Costing because costs, energy consumption and waste generation are handled in an integrated activity-based framework. In addition, the attention directing capabilities are greatly enhanced in Activity-Based LCA by purposely adding uncertainty to the models and employing Monte Carlo methods and sensitivity analyses. The usage of Monte Carlo methods also allows remarkably easy uncertainty handling and the effects of the inherent distortions in assessments are also illustrated. Since proactiveness is vital, our assessments and identification of critical success factors are linked to product- and process design.

The Waste Index is based on the basic laws of thermodynamics and chemistry and yields comparable results. It therefore overcomes the problem of incomparability. The axiom behind the WI is that ‘environmental impact can only be measured relatively by benchmarking Nature’. This represent a paradigm shift in environmental impact assessments since conventional indicators always try to relate the assessments to specific environmental problems which are inherently incomparable.

Our research is validated by using three real-life case studies and an illustrative simulation case study:

  • Manufacturing of toys at a simulated factory called WagonHo!, Inc. found in the Center for Manufacturing Information Technology (CMIT) in Atlanta. Although not a real case study, it clearly illustrates many pitfalls with conventional LCA approaches and how Activity-Based LCA avoids them.
  • Operation in the North Sea of a Platform Supply Vessel (PSV) owned by Farstad Shipping ASA. In this case study we compare Activity-Based LCA to a conventional method. Activity-Based LCA, in contrast to the third party implemented conventional LCA, assesses both the economic- and environmental performance consistently and gives both comparable results and decision support.
  • Manufacturing of flooring systems at Interface Flooring Systems, Inc. in La Grange, Georgia. Here we show an environmentally focused implementation of Activity-Based LCA, where quality issues are also handled, of an whole company with ten major product lines. We also illustrate how Activity-Based LCA adds value to their quest for sustainability.
  • Manufacturing of mattresses and beds at Westnofa Industrier AS in Åndalsnes, Norway. This is our most comprehensive Activity-Based LCA implementation. Here, integrated environmental- and cost assessments are presented for both managerial and design related efforts for an entire company with six production departments and 42 products and product lines.

Activity-Based LCA when using the Waste Index proved very useful in providing comparable results, accurate assessments, good tracing and attention directing in all these case studies. From this we conclude that Activity-Based LCA is a major improvement over conventional LCA methods.