Life Cycle Costing in Sustainability Assessment—A Case Study of Remanufactured Alternators

Abstract

Sustainability is on the international agenda, and is a driver for industry in international competition. Sustainability encompasses the three pillars: environment, society and economy. To prevent shifting of burden, the whole life cycle needs to be taken into account. For the environmental dimension of sustainability, life cycle assessment (LCA) has been practiced for a while and is a standardized method. A life cycle approach for the social and economic pillars of sustainability needs to be further developed. This paper investigates the application of life cycle costing (LCC) as part of a wider sustainability assessment where also social life cycle assessment (SLCA) and LCA are combined. LCA-type LCC is applied on a case study of remanufactured alternators. Remanufacturing of automobile parts is a fast growing important business with large potential for cost and resource savings. Three design alternatives for the alternator and three locations for the remanufacturing plant are evaluated. The remanufacturer perspective and the user perspective are investigated. The results for the LCA-type LCC show that the largest cost for the remanufacturer is the new parts replacing old warn parts. However, the user cost, and therein especially, cost for fuel used for the alternator’s power production dominates and should be the focus for further improvement. In conducting the case study, it was revealed that the connection between the LCA-type LCC results and the economic dimension of sustainability needs to be further investigated and defined. For this purpose, areas of protection for life cycle sustainability assessment and LCA-type LCC in particular need further development.