Based Data Recording for

Life Cycle Costing & Sensor
-
Based Data Recording for
Recycling

Life Cycle Costing


Incorporation of “green features” seen as desirable


Often perceived as too expensive


Need to account properly for the long term costs and
benefits of their products


Environmental progress is sub optimised by imperfect
analysis leading to unclaimed opportunities for enhanced
profitability


Changing nature of production aswell as regulatory
parameters have challenged the old conservative bean
counter system to get the maths right


If companies could improve at tracking costs they can
design better for the long run and find it more profitable


What gets Measured gets Managed

Life Cycle Costing


Electronic products often have very short life cycles


Leaves little time for exploring cost
-
capturing tools
such as life cycle costing


Rather than disappear from the balance sheets at the
point of sale many products will now be returned


Current accounting and financial models disregard the
serious cost ramifications of policy and preference
shifts

Life Cycle Costing


DfE can fail to incorporate common business
considerations


Limits its acceptance and influence


To sell a concept internally it is best to use
terms and ideas that managers understand


All understand accounting and cost
-
reduction

Life Cycle Costing


Life Cycle Costing is an accounting model
which must be considered as early as possible
in the design stage


Important in understanding and maximising
product value not just through one product
incarnation but through many

Life Cycle Costing


Establishing costs of a product over its entire
existence


In addition to research & development things
like product design, storage, inspection &
maintenance, administrative, program
management, disposal, insurance, potential
clean
-
up, potential liability costs related to an
environmental impact should be included in a
projects total cost assessment

Life Cycle Costing

Firm realises product benefits of its product only once

A

B

C

A

B

C

€
100

€
100

€
100

Cost

€
200

€
200

€
200

Price

Today

Totals

€
300

€
600

Total Profits
€
300

Life Cycle Costing


Contrast this with scenario B

–
Designed in longevity

–
Tracking the costs over more than one use

–
New Manufacturing cost increased by 10%


Better materials


Design improvements


Provides the product with worth on its return

–
After take back and reconditioning it will have a 2
nd

or 3
rd

revenue potential when it is resold or leased

Life Cycle Costing

A

B

C

A

B

C

€
110

€
110

€
110

Cost

€
200

€
200

€
200

Price

Today

Totals

€
330

€
600

Total Profits
€
270

Life Cycle Costing

A

B

C

A

B

C

€
40

€
40

€
40

Refurb
Cost

€
130

€
130

€
130

Price

Two Years from Today

Totals

€
120

€
390

Total Profits
€
270

Life Cycle Costing


First incarnation sales show a slightly
decreased profit


Not necessarily the case that environmental
upgrades or LCC will give a higher price
product and often the opposite is true


Good to envision the conservative scenario


Profits from a single life cycle
€
300


Combined first and second sales profits
€
540

Life Cycle Costing


Assumed refurbishing costs including storage and
retrieval
€
40


Must account for the time value of money


Important to look at a range of possibilities, sensitivity
analysis


Wont be able to predict all future costs with exact
certainty


Will gain more insight than if no costs were tracked
throughout the life cycle of a given product

Life Cycle Costing


Example

–
Camera company responding to European Legislation on
packaging reduction fortified the actual camera

–
Accommodated less protective packaging but also


Less warranty repairs


Compliance


Reduced packaging cost

–
Only for life cycle costing may have erroneously believed that
the extra material required was not worth the cost

Life Cycle Costing


Vision of value in end of life


Reclaimed EoL products = ingredients


Margins on the used products are often higher


Larger inventory of parts means better able to
service contract maintenance customers


Previous accounting practices led to believe
this would not be profitable


Xerox example

Reverse Logistics


Definition of Logistics

–
Logistics is defined as a business planning
framework for the management of material, service,
information and capital flows. It includes the
increasingly complex information, communication
and control systems required in today's business
environment


Reverse Logistics


Definition of Reverse Logistics

–
The supply chain that flows opposite to the traditional process
of order acceptance and fulfilment. For example, reverse
logistics includes the handling of customer returns, the
disposal of excess inventory and the return journey of empty
trucks and freight cars.

–
A specialized segment of logistics focusing on the movement
and management of products and resources after the sale and
after delivery to the customer


Reverse Logistics


Most expensive part of take back


Take back needs economies of scale


More difficult to design an economically viable
EoL solution than simply to be ecologically
viable


Refurbishment, re
-
use & recycling will live or
die by reverse logistics

Reverse Logistics


Need to examine

–
Collection area, population density

–
Spectrum of products being delivered

–
Product life cycle times

–
Recycling potential

–
Recycling infrastructure

–
Costs


Collection, transport, handling, storing, sorting, disassembly +
REVENUES

–
Suitable Equipment for recovery

Sensor
-
Based Data Recording for
Recycling


Most Common practice to recycle products for their
materials


Materials often constitute a very small fraction of the
product value


Often only a fraction of the materials can be recovered
and may be inferior to virgin material


Revenues from recycled material often don’t cover the
collection cost


Reuse of parts or components is desirable from both
economic and environmental perspective

Sensor
-
Based Data Recording for
Recycling


Example

–
The materials value of a typical power tool is
€
3

–
The manufacturing cost is
€
50

–
Motor may be rated for 1,000 hours

–
Yuppie uses drill for 50 hours

–
Why not reuse the motor ??

Sensor
-
Based Data Recording for
Recycling


Arguments against re
-
use

–
No information about the remaining lifetime

–
No information about quality of the product available

–
Inferior quality of used product ??

–
Obsolescence of components

Sensor
-
Based Data Recording for
Recycling


Some components such as Electric Motors,
Power Supplies and other basic subsystems
are less susceptible to obsolescence and
innovation as their technology is very stable


For other components why not this years top of
the range, next years mid range and following
year bottom range??


Problem to assess the remaining lifetime

Electronic Data Logging (EDL)


The recording of data indicating the
degradation of components during the use
phase of a product by an electronic device
integrated in the product


Sometimes referred to as “green data” which is
accessed through the “green port”


Will examine an example from Bosch

Electronic Data Logging


Integrated Electronic Data Logging System that stores data
obtained from sensors indicating the degradation of
electronic and electromechanical components


The result of these efforts is an EDL for electric motors, a
product integrated device used to measure, compute, and
store parameters correlated with the degradation of the
motor aiming at their reuse


Two objectives in this prototype

–
Minimisation of extra cost

–
Small Size

Electronic Data Logging


The EDL prototype consisted of the following components

–
Circuit board with micro controller and EEPROM memory

–
Sensors for measurement of temperature and current

–
Wireless interface to transmit data from the EDL to an
electronic reader (An LED)

–
A DC power supply (not available in power tools normally
but very common on other electronic products)

Electronic Data Logging

Electronic Data Logging


The power supply is connected to the terminals of the
motor.


A capacitance ensures the EDL can safely finish
writing data when the motor is switched off


EDL functionality includes

–
Counting the number of starts and stops of the motor

–
Storing the runtime in each cycle aswell as accumulated
runtime

–
Recording and compiling sensor information on motor
temperature and power consumption per cycle

–
Classifying and evaluating the recorded data

–
Computing and storing peak and average values of all
parameters of interest

Electronic Data Logging


To achieve large recording capacity with a smaller memory the measured
parameters are assigned classes as opposed to recording a chain of data
for each cycle



Reduced the data memory size needed to record 50 parameters for
10,000 use cycles from 488 KB to less than 1KB.



Lose the correlation of between the parameters measured but can be
approximated with data from lab experiments



First prototypes recorded data for accumulated runtime of 2,300 hours



Three bytes in EDL memory store a unique product identification like a
serial number which can be used to link the set of dynamic data in the
EDL to external static information on the product


Electronic Data Logging

Electronic Data Logging


EDL interface and Electronic Reader

–
Stored data transmitted using a low cost, low current LED

–
Every time the on/off switch is pressed, the data stored is sent
via the LED at a rate of 9,600 baud, indicated by a short
flashing of the LED

–
Reader consists of an array of photodiodes and electronic
circuitry to amplify and convert the data plus the necessary RS
232 interface circuitry

–
Other data transmission means include infrared and high
frequency

–
Classification algorithm allows discrimination between
reusable and non
-
reusable motors based on recorded data

Data Transmission


For LED line of sight required


EDL must be connected to a power supply


Better design would use radio freq for data
transmission


EDL would communicate to the reader via antenna and
the reader would provide energy to read EDL data


Necessary to validate data, plausibility, failure of
sensors and to make tamper proof

Standardisation


No standards exist for this concept


Need to make data accessible to recyclers


Designs customised for use by different
manufacturers, different products


Reused components must have “their EDL
data” follow them into their next incarnation

Information System for Product
Recovery (ISPR)


End of life costs reduced and reclamation of value from end of life
products improved if the dynamic data is combined with external
data relevant to the product (eg demand for used components and
re
-
manufactured products) and further data on the product (eg
materials composition, disassembly sequence)


Static data is created at the design and manufacturing stage while
external data elements reflect the current market environment


The ISPR integrates these static and dynamic data and automates
the classification of end of life products (eg ISPR checks whether
there is a demand for a remanufactured model of a returned end
of life product

Information System for Product
Recovery (ISPR)


Next stage ISPR would identify reusable parts,
components and subassemblies based on the
evaluation of the data stored in the EDL


If remanufacturing is not possible (no demand
or not technically possible) materials recycling
would be recommended and supported by a
generated disassembly sequence optimising
revenues from reclaimed materials

Economic Efficiency of the EDL in a
Reuse Scenario


Manufacturing Cost Savings

–
Cost target for the EDL ought to be determined by the
economic efficiency of reusing components from end of life
products

–
Only attractive if the additional costs are offset by cost savings
from reuse

–
Equipping increases initial manufacturing costs

–
Only a fraction will be returned

–
Only a portion of these (yuppie’s) can be reused

–
Is the additional cost of the EDL justified by the savings
resulting from reuse

Economic Efficiency of the EDL in a
Reuse Scenario


Accounting for misclassifications

–
Ideally, the classification software classifies all
motors correctly

–
Misclassifications are unavoidable and result in
additional costs

Economic Efficiency of the EDL in a
Reuse Scenario

Actual Motor Behaviour
Will Not Fail
Will Fail
Reuseable
True Positive
False positive
Motor
Cost
Classed as
Non-Reuseable
False Negative
True Negative
Cost
Future Application Scenario


Leasing based on use intensity


Quality management and market research


Service and maintenance or warranty claim
assessment


Use intensity
-
based warranty periods


Pricing of used products

Further Reading

Chapter 6 Goldberg

Chapter 7 Goldberg