Automotive Industry Trends
Life-Cycle Management
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The greening of the auto industry is a good thing. Beyond being the right thing to do for future generations, environmental awareness can ultimately save time and generate money for automobile organizations worldwide. Today, organizations within the automobile industry are coming to realize that if they embrace the philosophy of life-cycle management (LCM), in which the environmental impact of every product and action they take is measured, optimized, recorded and improved - the industry as a whole benefits.
Life-cycle assessment (LCA), a crucial component of LCM, is a method for measuring the entire environmental impact of a product - from its beginnings as raw materials through design, manufacture, life of the product and disposal. Coined from "cradle to grave," LCA is complex to say the least. There are numerous factors that need to be identified in order to calculate the true cost of the automobile. Some of these are:
- Price of purchase, insurance and maintenance
- Fuel economy
- Environmental impact of manufacture, operation and disposal
- Hazardous substance content
- Transportation of components and cars
- Road construction and maintenance
- Storage and packaging
- Recycling
- Health and safety of workers
Life-cycle assessment involves an entire supply chain that may stretch around the globe. For example, $60 billion is spent annually to ensure Middle East oil supply - a critical component in all phases of the automobile's life cycle. Due to this complexity, the level of environmental responsibility envisioned by the proponents of life cycle thinking hasn't completely happened. Just gathering all this information and attaching a dollar value to it involves numerous people within and outside of the organization. Not only do these people have to work together to share information, but outside sources like government databases and consultants must be used as well. In spite of the difficulties, LCA has been used by some in the auto industry for over a decade and has provided them with some significant payoffs, including:
- Resource conservation
- Waste reduction
- Savings in redesign
- Improved working conditions
Interestingly enough, although environmentally hazardous substances tend to have a lower initial purchase price than more environmentally friendly alternatives, the associated costs of using the hazardous substances (such as management, disposal and liability) tend to be much higher. More often than not, alternatives to hazardous substances usually end up saving money in the long run, in addition to being the right thing for the environment. Because of this fact, automobile manufacturers are employing LCM and LCA techniques worldwide.