A Systems Approach for Strategic Selection of Sustainable Product Improvement Alternatives

A Life Cycle Approach for Strategic Selection of Sustainable Product Improvement Alternatives Under Data Uncertainty Anthony Halog Research Center for Life Cycle Assessment 16-1 Onogawa, Tsukuba, Ibaraki, 305-8569 Japan

Keywords: Sustainable Product Design, Life Cycle Costing (LCC), Fuzzy Multi-attribute Decision Making

ABSTRACT The research is focused on how companies can be assisted in design of products so that quality, environmental and cost (QEC) requirements of stakeholders in the life cycle stages of the product system are addressed at an early stage. The consideration of these 3 design requirements leads to multi-attribute decision situation with regard to the selection of optimal product system improvement concept. The main objective is to develop a decision-oriented life cycle approach that integrates QEC parameters at early stage of product development. A conceptual approach was developed which includes: (1) identification and documentation of QEC requirements’ information; (2) generation of alternative concepts for product improvements and construction of sustainable concept comparison matrix where fuzzy terms were adopted to describe relationships and importance; (3) fuzzy linguistic decision support system was developed and applied to evaluate and select the optimal sustainable product improvement alternative; (4) sensitivity and statistical analyses. Ranking of alternative sustainable options with respect to environment, cost and quality are reported.

INTRODUCTION METHODOLO GICAL APPROACH Worldwide competition in today’s global economies has brought significant challenges to many companies that want In Figure 1 below, the 1st phase involves identification and to meet continuously changing specific requirements of documentation of QEC attributes of the reference product. customers. Some of the critical issues that manufacturing This information is obtained through the use of streamlined firms should consider to remain competitive in the market and/or modified LCA, QFD, and LCC methods. In 2nd are maintaining high quality products, lowering costs and phase, the identified requirements or attributes from prices, decreasing product cycle time and protecting the streamlined and modified methods are then utilized as basis environment. to develop alternative concepts for product system improvement by generating through systematic methods The main objective of this research is to develop a decision- such as group brainstorming. Next, the critical QEC oriented life cycle approach that enables the integration of requirements are listed against the proposed options for cost and quality factors together with environmental product improvement in the sustainable concept comparison considerations at the early stage of product development so matrix shown in Figure 2. However, before one can evaluate that alternatives can be consistently compared and the each sustainable improvement proposal with respect to QEC optimal option is chosen. Through this way, the attributes, one has to estimate first the expected manufacturing company can demonstrate its commitment to environmental and cost performances of the options for environmental stewardship and economic competitiveness. system improvement by analogy to the reference system. In 3rd phase, basing from the estimated environmental, cost To meet the main objective, the sub-goals are: and quality performance of the alternatives for improvement, the decision maker or the product 1. identify the environmental, quality and cost development team has to evaluate the importance of the requirements of stakeholders for a given product QEC requirements and assess the capability of each of the system; proposed system improvement alternatives in meeting each 2. determine at which stage of the life cycle phases critical QEC requirement by using defined fuzzy linguistic emissions and high costs occur and which product variables. Fuzzy linguistic approach is employed here components maximize the satisfaction of the because of the imprecision of pertinent information and the customer’s quality requirements; uncertain nature of the estimated costs and emissions used at the early phase of the product development. In the final 3. enumerate potential opportunities for improvements to phase, sensitivity and statistical analyses are conducted to meet the company’s overall strategy for sustainability confirm the preference or ranking of alternatives established and assess the capability of each option for by the fuzzy linguistic methodology. improvement to achieve each strategic requirement or attribute; Sustainable Concept Comparison House or Matrix 4. account the unavailability and inaccuracy of quality and One of the important concepts in the proposed methodology environmental related data and information, and of cost is the “sustainable concept comparison house” as shown in estimates at the early product design stage; Figure 2. This house aids in evaluating the options for improvement with respect to critical QEC criteria and to 5. Apply the developed methodology for choosing the finally choose the optimal sustainable option for system optimal sustainable product design concept for the improvement. This matrix shows the relationships between improvement of a light fitting system. the different proposed concepts for improving the original reference product system versus the customer’s product quality, environmental and cost attributes, and also the 2

Life Cycle Assessment Quality Function Life Cycle Costing (LCA) Deployment (QFD) (LCC)

Environmental Quality Cost Requirements Requirements Requirements

Proposed Options Sustainable Concept for Improvement Brainstorming Comparison Matrix (Product Concept Alternatives)

Fuzzy Linguistic Decision Support System (FLDSS)

Sensitivity and Statistical Analysis of Results

Figure 1 Framework of Approach for Evaluation and Selection of Sustainable Product System Improvement Alternatives [1] Figu

Correlation Matrix

y t i l

Criteria/Attributesa for System u s s t t Q Improvement

s e e ’ t t c r i n n m m e e e e e m r r m i i m o m o u u n e t n r s q q o o i r u e e c i u C R E R v q e n E R t n

r e o f m

e g s l l v n n i a o o r r k i Capability Array t e p n p v a m O I O R

Importance Vector

re 2 Sustainable Concept Comparison Matrix or House [1] QEC requirements are considered, could affect the decision assessed importance of these attributes. on which option for improvement to be further deployed in succeeding product development stages. It is advisable that SELECTION OF OPTIONS FOR IMPROVEMENT improvement in reliability and quantity of information to support decision-making is necessary. Fuzzy linguistic USING FUZZY LINGUISTIC APPROACH models permit the translation of linguistic terms into One difficulty encountered in the present work is the lack of numerical ones [2]. It deals quantitatively with imprecision precise information about the performance of proposed in the expression of the Importance of each requirement product system improvement concepts at the early phase of strategic to the firm’s plan for sustainability and the product development. This inadequate information in the Capability of each option for improvement in addressing idea phase, where most of design aspects with respect to each strategic attribute. That is, the Capability, of each 3

alternative in achieving each strategic requirement for  Option 2- Substitution of aluzinc with black iron in the sustainability is assessed in terms of natural language main body of light fitting system instead of using surrogate measures such as quantitative weighing factors, scores, or estimated costs used in the  Option 3- Replacement of 70% of the raw aluminum LCA, QFD and LCC analyses. Assuming that one has and steel with recycled materials already a complete sustainable concept comparison house or  Option 4 - Introduction of a system for recovery and matrix as in Figure 2, the problem now is how the most post-consumption recycling of the heaviest component suitable and optimal option for sustainable product system materials improvement from among those available will be selected. In applying a fuzzy linguistic based approach to the  Option 5 - Changing the light fittings from 10 W to 20 evaluation of options for improvement for design for W or 10 W to 40 W. sustainability, two fuzzy linguistic variables need to be defined: X =”Importance” and Y =” Capability”.  Option 6 - Adding energy conserving equipment (infrared switch, etc.) to the reference product. A linguistic variable is a variable that admits as value words or sentences of a natural language, which can be represented However, it should be noted that the new proposed concepts as fuzzy sets [3]. To understand easily the notion of a for improvement might be significantly different from the linguistic variable, regard it either as a variable whose reference product system with regard to their material numerical values are fuzzy numbers or as a variable where composition, material consumption, life span, efficiency in the range of which is not defined by numerical values but by use, quality, cost, and environmental performance, etc. linguistic terms. The use of the defined two linguistic The main result is the developed conceptual methodology as variables allows the design engineer, decision maker or the shown above. Based on the simultaneous consideration of product development team to specify the Importance QEC requirements, Option 1 is the most sustainable concept associated with the attributes common to all options for for a system improvement because its capability in meeting improvement, and the Capability of each option (product relevant QEC requirements are at least more or less superior improvement alternative) to meet each criterion or attribute which translates into low relative hamming distance. Option for the eventual sustainability goal of the organization. For 1 always positions itself closer to the most preferred example, an alternative is above average in its ability to alternative and performs well across the critical meet the requirement of “reduced acidification potential”, requirements. It is closely followed by Option 5 and then which is very important criterion in accomplishing the by Option 4. Option 6 placed fourth in the ordering where company’s strategy for sustainable product development. In its superiority lies specifically to its environmental the preceding sentence, the term above average is a performance. The least preferred options are Option 2 and linguistic value of the fuzzy linguistic variable Option 3. Their weak capabilities to meet the QEC CAPABILITY, and the term very important is a linguistic requirements simultaneously are similar to their individual value of the fuzzy linguistic variable IMPORTANCE. effectiveness as demonstrated in the other assessments Further discussion of the developed fuzzy linguistic made. The results of the case study are summarized and decision support system and its mathematical model can be reported in Table 1 below. It is indicated that the option for referred in [1]. A heuristic algorithm was also developed to product system improvement in the case of light fitting facilitate the determination of the over-all linguistic value of system is more or less dependent on the performance the Capability of an alternative or eventually the ranking of criteria considered. Relating the results to the concept of the options for sustainable system improvement based on sustainable competitive advantage, Porter emphasized that relative Hamming distance. Kaufmann [4] described the to remain competitive, firms should be able to create value concept of relative hamming distance. for its buyers or other stakeholders that exceeds the cost of APPLICATION, RESULTS AND DISCUSSION creating it. He posited that sustainable competitive advantage could be achieved in 2 ways. One is by cost A case project on the improvement of light fitting system leadership and the other is by differentiation [5]. Thereby, has been conducted in cooperation with Lumilight Electric the results further imply that firms could select which Product and Lighting Inc. At present the said company strategy they have to follow either to remain as cost leader works to improve their environmental performance in three and/or also to differentiate their products with respect to different areas - energy conservation, raw material reduction quality performance and/or environmental friendliness. in new products, and recycling. The reference product is a However, if the criterion of the company is focused on light fitting system, 2 X 10 W splash proof universal, for environmental consideration alone, then the manufacturing office applications. This product system is 70 cm long and firm would prefer to adopt the system improvement that 24 cm wide with a traditional reactor. The weight of the uses energy conserving equipments connected to the fitting is about 3.5 kg, which is composed of alloy of Al and armature as their strategy although its initial purchasing cost Zn, steel, acrylic and ABS plastic materials, reactor and is high. Moreover, if the intention of the sustainable product aluminum reflector. improvement project is to select the alternative that considers QEC aspects at the same time, then the option that The following are the identified innovative and mutually develops new product with lower material consumption for exclusive options for system improvement by the product the purpose of easier disassembly is the most sustainable development team of Lumilight Electric Product and and optimal one to be pursued by the product development Lighting Inc. team. This optimal system concept of developing a new  Option 1 - New product design that reduces the product with lower material consumption is also in material consumption by 30%. agreement with the philosophy of waste reduction. Reducing the mass of a product through minimizing the 4

Table 1 Summarized Ranking Results at Different Performance Criteria Attributes/Performance Metrics Used Best Option for Improvement of Light Fitting System Customers’ Product Quality, Environmental and Cost Requirements Development of new product with lower material Environmental Requirements Use of energy conserving equipment connected to the armature Customers’ Product Quality Requirements Introduce system for recovery and post-consumption recycling of materials; Use of energy conserving equipment connected to the armature; Development of new product with lower material consumption Cost Requirements Change to higher wattage armature systems Environmental and Product Quality Requirements Introduce system for recovery and post-consumption recycling of materials; Use of energy conserving equipment connected to the armature; Development of new product with lower material consumption Environmental and Cost Requirements Development of new product with lower material consumption Product Quality and Cost Requirements Development of new product with lower material amount of materials used for key components is the surest  The “Importance” or the weights of the and most direct way to achieve waste reduction and this environmental requirements can be estimated from usually results to lower life-cycle costs as well [5]. Finally, different considerations such as public opinion on the by knowing the optimal product system improvement impact of the product, local environmental effects and alternative, the cross-functional project team of the sales points to represent the company’s marketing manufacturing firm can now allocate the necessary policy for the environmental perspective of the resources to explore extensively the selected alternative for product. further deployment in the QFD process.  A comparative study between the proposed fuzzy CONCLUSION AND RECOMMENDATIONS linguistic methodology and the well-known Analytic Hierarchy Process (AHP) method or any other multi- The conceptual approach developed in this study that criteria decision-making (MCDM) methodologies that attempts to incorporate QEC requirements at the early stage incorporate fuzziness. of product development (with consideration to imprecision of data inputs that influences a product development  Application of the developed framework into other decision for company’s sustainability plan) is distinct by industrial-based case studies to further explore its itself and seems promising. This method is appealing and robustness and applicability, in addition to conducting can be an essential means in guiding manufacturers to make streamlined QFD, LCA and LCC studies. sustainability decisions or even for the sole purpose of exploring the synergistic effect of critical economic, quality To end with, the developed conceptual methodology and environmental requirements of concerned stakeholders. provides a systematic and flexible approach for a The key elements of the developed methodology include: manufacturing company to address the strategy for the (1) life cycle and system approach to product company’s competitive advantage as well as to meet the improvements; (2) integrated method with respect to current concern for sustainability by choosing first which product development, (3) simultaneous consideration of optimal sustainable product system improvement concept customers’ product quality, life cycle economy and should be adopted to manufacture products that meet environmental requirements; and (4) consideration of customer’s quality requirements, cost less and are imprecise and inadequate information available at the early environmentally sound. design stage. REFERENCES The developed conceptual decision-oriented methodology [1] Halog, A., 2002. Selection of Sustainable Product that accounts for QEC requirements at the early stage of Improvement Alternatives, Ph.D. Dissertation, Faculty of product improvement has the potential to assist in Economics and Business Engineering, University of improving a manufacturing enterprise’s competitiveness in Karlsruhe (published electronically). the marketplace. Through the use of this approach, [2] Karwowski, W. & Mital, A., 1986, 1986. Potential manufacturing companies will get a better platform for Applications of Fuzzy Sets in Industrial Safety developing long-term environmental and competitive Engineering, Fuzzy Sets and Systems, 19:105-120. strategies through having knowledge about which [3] Zadeh, L.A., 1975. 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