Life Cycle Costing: Understanding How It Is Practised and Its Relationship to Life Cycle Management—A Case Study

Marianna Lena Kambanou

doi:10.3390/su12083252

Abstract

Despite the existence of many life cycle costing (LCC) methods, LCC is not widely adopted and LCC methods are usually further tailored by practitioners. Moreover, little is known about how practising LCC improves life cycle management (LCM) especially if LCM is considered emergent and constantly developing. In a manufacturing company, LCC is prescriptively introduced to improve LCM. In the first part, this study describes how various methodological choices and other aspects of practising LCC were the outcome of contestation and conformity with extant practices and not only the best way to fulfil the LCC’s objective. This contestation can even influence if LCC is adopted. In the second part of the research, the implications of practising LCC on LCM are explored. LCC is found to positively propel LCM in many ways e.g., by spreading the life cycle idea, but may lead to a narrower understanding of the term life cycle resulting in the sustainability focus of LCM being overridden. The article also discusses how the findings can be taken into consideration when researchers develop LCC methods and when industry practises LCC.

Highlights

In an effort to meet “the needs of the present without compromising the ability of future generations to meet their own needs” [1] multiple concepts, tools, and methods focusing on different challenges have been developed for companies to implement
This interconnectedness means that the results cannot be completely separated from the results of life cycle costing (LCC)’s relation to Life cycle management (LCM)
Lack of data for LCC has been identified as a barrier [8,9,10,21] but the findings in this research expose a hesitancy to find data and develop estimation techniques because they may come in conflict with extant costing practices

Summary

Introduction

In an effort to meet “the needs of the present without compromising the ability of future generations to meet their own needs” [1] multiple concepts, tools, and methods focusing on different challenges have been developed for companies to implement. Life cycle management (LCM) is such an umbrella concept, often viewed as an aggregation of tools and methods knotted together by life cycle thinking and aiming to minimize the environmental impacts of products and/or services over their life cycle [2,3,4]. There is an abundance of LCC methods These are usually developed by researchers based on desktop research and/or a single case study and prescribed to industry [6]. They tend to be case or industry specific [7]. Despite this abundance of tailored, case-specific methods, LCC is not widely used [8,9]. Starting from the assumption that LCM is a desired organizational activity that should be practised according to environmental or sustainability considerations and a full life cycle perspective, LCC at IpsosCo was found to propel an emergent LCM towards and away from this ideal practice

Methods

Results

Conclusion