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Comparing Life Cycle Costing and Performance Part Costing in Assessing Acquisition and Operational Cost of New Manufacturing Technologies

Kianian, Babak LU ; Kurdve, Martin and Andersson, Carin LU (2019) 26th CIRP conference on life cycle engineering (LCE 2019) In Procedia CIRP 80. p.428-433
Abstract (Swedish)
Even if practitioners want to adopt new manufacturing technologies, there is a lack of comprehensive tools to support their decisions, regarding both cost and sustainability. This paper reviews and compares the practical use of Life Cycle Costing (LCC) with a performance part costing (PPC) model, chosen based upon the criteria of providing in-depth analysis capabilities and the prospect of integrating cost and sustainability assessment. A case study of a Swedish gear manufacturer is selected, where the company investigates adoption of a new manufacturing technology. Since, this type of decision requires heavy investments e.g. in new machines, tools, linking performance with costs would be a prerequisite for performing well-informed... (More)
Even if practitioners want to adopt new manufacturing technologies, there is a lack of comprehensive tools to support their decisions, regarding both cost and sustainability. This paper reviews and compares the practical use of Life Cycle Costing (LCC) with a performance part costing (PPC) model, chosen based upon the criteria of providing in-depth analysis capabilities and the prospect of integrating cost and sustainability assessment. A case study of a Swedish gear manufacturer is selected, where the company investigates adoption of a new manufacturing technology. Since, this type of decision requires heavy investments e.g. in new machines, tools, linking performance with costs would be a prerequisite for performing well-informed decisions. Based on interviews, the level of detail requirements e.g., performance indicators, when acquiring new technologies are identified. LCC model cost parameters are compared with the PPC cost drivers and the data availability and estimation are discussed. (Less)
Abstract
In today’s business environment, the trend towards more product variety and customization is unbroken. Due to this development, the need of agile and reconfigurable production systems emerged to cope with various products and product families. To design and optimize production systems as well as to choose the optimal product matches, product analysis methods are needed. Indeed, most of the known methods aim to analyze a product or one product family on the physical level. Different product families, however, may differ largely in terms of the number and nature of components. This fact impedes an efficient comparison and choice of appropriate product family combinations for the production system. A new methodology is proposed to analyze... (More)
In today’s business environment, the trend towards more product variety and customization is unbroken. Due to this development, the need of agile and reconfigurable production systems emerged to cope with various products and product families. To design and optimize production systems as well as to choose the optimal product matches, product analysis methods are needed. Indeed, most of the known methods aim to analyze a product or one product family on the physical level. Different product families, however, may differ largely in terms of the number and nature of components. This fact impedes an efficient comparison and choice of appropriate product family combinations for the production system. A new methodology is proposed to analyze existing products in view of their functional and physical architecture. The aim is to cluster these products in new assembly oriented product families for the optimization of existing assembly lines and the creation of future reconfigurable assembly systems. Based on interviews, the level of detail requirements e.g., performance indicators, when acquiring new technologies are identified. LCC model cost parameters are compared with the PPC cost drivers and the data availability and estimation are discussed.

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Please use this url to cite or link to this publication:
author
organization
publishing date
type
Chapter in Book/Report/Conference proceeding
publication status
published
subject
keywords
Life Cycle Costing (LCC), Performance part costing (PPC), decision support system (DSS), gear manufacturing
host publication
26th CIRP Conference on Life Cycle Engineering (LCE)
series title
Procedia CIRP
volume
80
pages
5 pages
conference name
26th CIRP conference on life cycle engineering (LCE 2019)
conference location
West lafayette, United States
conference dates
2019-05-07 - 2019-05-09
external identifiers
  • scopus:85067207589
ISSN
2212-8271
ISBN
2212-8271
DOI
10.1016/j.procir.2019.01.025
language
English
LU publication?
yes
id
e719b866-c4b4-4db8-9808-84e74201629c
date added to LUP
2019-05-15 11:52:38
date last changed
2019-10-13 05:01:54
@inproceedings{e719b866-c4b4-4db8-9808-84e74201629c,
  abstract     = {In today’s business environment, the trend towards more product variety and customization is unbroken. Due to this development, the need of agile and reconfigurable production systems emerged to cope with various products and product families. To design and optimize production systems as well as to choose the optimal product matches, product analysis methods are needed. Indeed, most of the known methods aim to analyze a product or one product family on the physical level. Different product families, however, may differ largely in terms of the number and nature of components. This fact impedes an efficient comparison and choice of appropriate product family combinations for the production system. A new methodology is proposed to analyze existing products in view of their functional and physical architecture. The aim is to cluster these products in new assembly oriented product families for the optimization of existing assembly lines and the creation of future reconfigurable assembly systems. Based on interviews, the level of detail requirements e.g., performance indicators, when acquiring new technologies are identified. LCC model cost parameters are compared with the PPC cost drivers and the data availability and estimation are discussed.<br/><br/>},
  author       = {Kianian, Babak and Kurdve, Martin and Andersson, Carin},
  booktitle    = {Procedia CIRP},
  isbn         = {2212-8271},
  issn         = {2212-8271},
  keyword      = {Life Cycle Costing (LCC),Performance part costing (PPC),decision support system (DSS),gear manufacturing},
  language     = {eng},
  location     = {West lafayette, United States},
  month        = {05},
  pages        = {428--433},
  title        = {Comparing Life Cycle Costing and Performance Part Costing in Assessing Acquisition and Operational Cost of New Manufacturing Technologies},
  url          = {http://dx.doi.org/10.1016/j.procir.2019.01.025},
  volume       = {80},
  year         = {2019},
}