Product Structure-Based Integrated Life Cycle Analysis (PSILA): a technique for cost modelling and analysis of closed-loop production systems

Abstract

Abstract As closed-loop production becomes an increasingly viable strategy for product life cycle management, cost modelling and analytical tools for closed-loop production systems will become increasingly important. Existing tools based on life cycle costing (LCC) methods are lacking an integrated life cycle perspective in their approach – a perspective that cannot be overlooked when modelling closed-loop production systems. In this paper, we aim to solve this lack of integrated life cycle approach by proposing the product structure-based integrated life cycle analysis (PSILA) technique. It allows us to streamline the process of modelling a closed-loop production system for a complex product based on its product structure. Through this technique, we developed a cost model of a closed-loop production system for a flat-panel (FPD) monitor case study. In this case study, the results simulated by the cost model show an increase in the economic performance when closed-loop production is adopted for the FPD monitor. Deeper analysis of the results in the case study indicate that in order to improve the economic performance of the closed-loop production system for the FPD monitor, the best strategy is not to merely focus on the reutilisation of materials. Instead, the option to remanufacture the FPD monitor for the secondary market should be explored to maximise the value reclaimed from the monitors in the EoL phase. The case study demonstrates that the cost model developed through the PSILA technique has the ability to function as a tool for analysing the economic performance of closed-loop production systems. More importantly, it has the ability to provide us with strategic insights on the cost feasibility of adopting closed-loop production strategies.