A Model for Making Part Sourcing Decisions for Long Life Cycle Products

2011 ◽  
Author(s):  
Varun J. Prabhakar ◽  
Peter Sandborn
Keyword(s):  
Supply Chain ◽  
Life Cycle ◽  
Life Cycle Cost ◽  
Critical Infrastructure ◽  
Cost Effective ◽  
Sourcing Strategies ◽  
Support Costs ◽  
Long Life ◽  
Sourcing Decisions ◽  
Linear Regulators

Long life cycle products, commonly found in aviation, medical and critical infrastructure applications, are often fielded and supported for long periods of time (20 years or more). The manufacture and support of long life cycle products rely on the availability of suitable parts, which over long periods of time, leaves the parts susceptible to a number of possible supply chain disruptions such as suppliers exiting the market, counterfeit part risks, and part obsolescence. One solution to mitigating the supply chain risk is the strategic formulation of suitable part sourcing strategies (optimally selecting one or more suppliers from which to purchase parts over the life of the part’s use within a product or within an organization). Strategic sourcing offers one way of avoiding the risk of part unavailability (and its associated penalties), but at the possible expense of qualification and support costs for multiple suppliers. Existing methods used to study part sourcing decisions are procurement-centric where cost tradeoffs focus on part pricing, negotiation practices and purchase volumes. These studies are commonplace in strategic parts management for short life cycle products; however, conventional procurement-centric approaches offer only a limited view when assessing parts used in long life cycle products. Procurement-driven decision-making provides little to no insight into the accumulation of life cycle cost (attributed to the adoption and use of the part), which can be significantly larger than procurement costs in long life cycle products. This paper presents a new life cycle modeling approach to quantify risk that enables cost effective part sourcing strategies. The method quantifies obsolescence risk as “annual expected total cost of ownership (TCO) per part site” modeled by estimating the likelihood of obsolescence and using that likelihood to determine the TCO allowing sourcing strategies to be compared on a life cycle cost basis. The method is demonstrated for electronic parts in an example case study of linear regulators and shows that when procurement and inventory costs are small contributions to the part’s TCO, the cost of qualifying and supporting a second source outweighs the benefits of extending the part’s effective procurement life.

Optimizing Part Sourcing Strategies for Low-Volume, Long Life Cycle Products Using Second Sourcing and Part Hoarding

2013 ◽  
Author(s):  
Varun J. Prabhakar ◽  
Hannah Allison ◽  
Peter Sandborn ◽  
Bo Eriksson
Keyword(s):  
Supply Chain ◽  
Life Cycle ◽  
Mitigation Strategies ◽  
Supply Chain Disruptions ◽  
Sourcing Strategies ◽  
Study Results ◽  
Future Time Period ◽  
Long Life ◽  
The Impact

Long life cycle products, commonly found in aviation, medical and critical infrastructure applications, are often fielded and supported for long periods of time (20 years or more). The manufacture and support of long life cycle products rely on the availability of suitable parts, which over long periods of time, leaves the parts susceptible to supply chain disruptions such as suppliers exiting the market, allocation issues, counterfeit part risks, and part obsolescence. Proactive mitigation strategies exist that can reduce the impact of supply chain disruptions. One solution to mitigating the supply chain risk is the strategic formulation of part sourcing strategies (optimally selecting one or more suppliers from which to purchase parts over the life of the part’s use within a product or organization). Strategic sourcing offers a way of avoiding the risk of part unavailability (and its associated penalties), but at the expense of qualification and support costs for multiple suppliers. An alternative disruption mitigation strategy is hoarding. Hoarding involves stocking enough parts in inventory to satisfy the forecasted part demand (for both manufacturing and maintenance requirements) of a fixed future time period. This excess inventory provides a buffer that reduces the effect of supply chain disruptions on the part total cost of ownership (TCO), but increases the total holding cost. This paper presents a method of performing tradeoff analyses and identifying the optimal combination of second sourcing and hoarding for a specific part and product scenario. A case study was performed to examine the effects of hoarding on both single and second sourced parts. The case study results show that hoarding can contribute to a decrease in the cumulative TCO and a decrease in its variance.

scholarly journals Sustainable Ventilation Strategies for a Medium-Sized Space with Regional Effect

2021 ◽  
Vol 13 (9) ◽  
pp. 4651
Author(s):  
Ming-Lun Alan Fong
Keyword(s):  
Life Cycle ◽  
Life Cycle Cost ◽  
Co2 Emission ◽  
High Efficiency ◽  
Regional Climate ◽  
Cost Effective ◽  
Regional Effect ◽  
Climate Conditions ◽  
Ventilation Strategies ◽  
Set Up

The analysis of ventilation strategies is fundamentally affected by regional climate conditions and local cost databases, in terms of energy consumption, CO2 emission and cost-effective analysis. A systematic approach is covered in this paper to estimate a local economic and environmental impact on a medium-sized space located in two regions during supply-and-installation and operation phases. Three ventilation strategies, including mixing ventilation (MV), displacement ventilation (DV) and stratum ventilation (SV) were applied to medium-sized air-conditioned space with this approach. The trend of the results for three ventilation systems in the life cycle assessment (LCA) and life cycle cost (LCC) analysis is SV < DV < MV. The result of CO2 emission and regional LCC shows that SV is the lowest one in both regional studies. In comparison with the Hong Kong Special Administrative Region (HKSAR) during 20 Service years, the case analysis demonstrates that the percentage differences in LCC analysis of MV, DV & SV in Guangdong are less than 20.5%, 19.4% and 18.82% respectively. Their CO2 emission of MV, DV and SV in Guangdong are more than HKSAR in 10.69%, 11.22% and 12.05%, respectively. The present study could provide information about regional effects in the LCA and LCC analysis of three ventilation strategies emissions, and thereby help set up models for decision-making on high efficiency and cost-effective ventilation strategy plans.

Design for Product Variety: Key to Product Line Structuring

1995 ◽  
Author(s):  
Kosuke Ishii ◽  
Cheryl Juengel ◽  
C. Fritz Eubanks
Keyword(s):  
Supply Chain ◽  
Life Cycle ◽  
Manufacturing Process ◽  
Life Cycle Cost ◽  
Manufacturing System ◽  
Product Variety ◽  
Product Line ◽  
Customer Preference ◽  
The Cost ◽  
Structure Graph

Abstract This study develops a method to capture the broadest customer preference in a product line while minimizing the life-cycle cost of providing variety. The paper begins with an overview of product variety and its importance in overhead costs: supply chain, equipment and tooling, service, and recycling. After defining the product structure graph as a representation of variety, the paper introduces an approximate measure for the customer importance and life-cycle cost of product variety The cost measure utilizes the concept of late point identification which urges standardization early in the manufacturing process and differentiation at the end of the process. The variety importance-cost map allows engineers to identify cost drivers in the design of the product or the manufacturing system and seek improvements. The refrigerator door example illustrates the concept. On-going work seeks to validate and enhance the method with several companies from different industries.

scholarly journals Supply Chain and Life Cycle Cost of Roofing in Sabah: A Case Study

2011 ◽  
Vol 2 (1) ◽  
pp. 1-11
Author(s):  
Lillian Gungat ◽  
Kurian V. John ◽  
Rohayah Ladom
Keyword(s):  
Supply Chain ◽  
Life Cycle ◽  
Life Cycle Cost

Life Cycle Cost Analysis Case Study on Corrosion Remedial Measures for Concrete Structures

2012 ◽  
Author(s):  
Jin How Ho ◽  
Azlan Abd. Rahman
Keyword(s):  
Life Cycle ◽  
Cost Analysis ◽  
Life Cycle Cost ◽  
Net Present Value ◽  
Cost Effective ◽  
Concrete Bridges ◽  
Analysis Tool ◽  
Life Cycle Cost Analysis ◽  
Remedial Measures ◽  
Present Value

Artikel ini membincangkan kajian ringkas berkaitan analisis kos kitaran hayat terhadap langkah-langkah pembaikan pengaratan bagi jambatan dan struktur marin konkrit yang terdedah kepada karbonasi atau serangan natrium klorida daripada air laut atau sumber-sumber lain. Perisian kos kitaran hayat, Bridge LCC 2.0 digunakan untuk menjalankan analisi kitaran hayat untuk tiga kes kajian melibatkan kaedah nilai bersih kini. Keputusan kajian menunjukkan analisis kos kitaran hayat berkeupayaan untuk membantu jurutera dan agensi pengangkutan dalam menilai keputusan penyelenggaraan yang efektif berkaitan dengan masalah pengaratan. Ia boleh digunakan sebagai alat analisis ekonomi kejuruteraan yang membantu mantaksir kos-kos perbezaan dan membuat pilihan terhadap langkah pembaikan pengaratan yang berkesan. Analisis kos kitaran hayat bagi langkah pembaikan dipengaruhi oleh banyak pemboleh ubah seperti kos permulaan, kos penyelenggaraan, tahun kekerapan, dan jangka masa analisis. Amalan terbaik untuk analisis kos kitaran hayat bukan sahaja mengambil kira perbelanjaan oleh agensi, tetapi perlu mempertimbangkan kos-kos oleh pengguna dan analisis sensitiviti di sepanjang jangka hayat sesuatu langkah pembaikan. Kata kunci: Analisis kos kitaran hayat, jambatan konkrit, pengaratan, langkah, pembaikan, pemulihan struktur, keberkesanan kos, kaedah nilai bersih kini (NPV) This paper discusses a short study on life cycle cost analysis (LCCA) on corrosion remedial measures for concrete bridges and marine structures, which are subjected to carbonation or ingress of sodium chloride from sea water and other sources. Life cycle costing software, Bridge LCC 2.0, was used to perform life cycle cost analyses on three case studies, based on net present value method. The analysis of the results showed that LCCA is capable of assisting engineers or transportation agencies to evaluate optimum maintenance decisions in corrosion–related problems. It can be used as an engineering economic analysis tool that helps in qualifying the differential costs and choosing the most cost–effective corrosion remedial measures. Life cycle costs for the remedial measures are influenced by many costing variables such as initial costs, periodic maintenance costs, frequency years and analysis period. The best practice of LCCA should not only consider agency expenditures but also user costs and sensitivity analysis throughout the service life of a remedial measure. Key words: Life cycle analysis, concrete bridges, corrosion, remedial measures, structural rehabilitation, cost-effective, net present value method (NPV)

scholarly journals General Concerns Life-Cycle Design of Economical Ice-Resistant Structures in the Bohai Sea

2017 ◽  
Vol 24 (s2) ◽  
pp. 164-171
Author(s):  
Da-yong Zhang ◽  
Song-song Yu ◽  
Qian-jin Yue
Keyword(s):  
Life Cycle ◽  
Life Cycle Cost ◽  
Design Theory ◽  
Bohai Sea ◽  
Cost Effective ◽  
Bohai Bay ◽  
Offshore Platforms ◽  
The Bohai Sea ◽  
Life Cycle Design ◽  
Whole Life Cycle

Abstract In China, the oil and natural gas resources of Bohai Bay are mainly marginal oil fields. It is necessary to build both iceresistant and economical offshore platforms. However, there are many risks during the life cycle of offshore platforms due to the imperfect preliminary design for the Bohai Sea economical ice-resistant structures. As a result, the whole life-cycle design should be considered, including plan, design, construction, management and maintenance design. Based on the demand of existing codes and research of the basic design, structural ice-resistant performance and the reasonable management and maintenance, the life-cycle design theory is discussed. It was concluded that the life-cycle cost-effective optimum design proposed will lead to a minimum risk.

scholarly journals Uncertainty estimation in railway track life-cycle cost: a case study from Swedish National Rail Administration

2008 ◽  
Vol 223 (3) ◽  
pp. 285-293 ◽  
Author(s):  
A P Patra ◽  
P Söderholm ◽  
U Kumar
Keyword(s):  
Life Cycle ◽  
Life Cycle Cost ◽  
Cost Effective ◽  
Railway Track ◽  
Statistical Characteristics ◽  
Maintenance Cost ◽  
Cost Models ◽  
Effective Decision ◽  
Effective Decision Support

Life-cycle cost (LCC) is used as a cost-effective decision support for maintenance of railway track infrastructure. However, a fair degree of uncertainty associated with the estimation of LCC is due to the statistical characteristics of reliability and maintainability parameters. This paper presents a methodology for estimation of uncertainty linked with LCC, by a combination of design of experiment and Monte Carlo simulation. The proposed methodology is illustrated by a case study of Banverket (Swedish National Rail Administration). The paper also includes developed maintenance cost models for track.

scholarly journals The cleaner, the greener? Product sustainability assessment of the biomimetic façade paint Lotusan® in comparison to the conventional façade paint Jumbosil®

2016 ◽  
Vol 7 ◽  
pp. 2100-2115 ◽  
Author(s):  
Florian Antony ◽  
Rainer Grießhammer ◽  
Thomas Speck ◽  
Olga Speck
Keyword(s):  
Life Cycle ◽  
Life Cycle Cost ◽  
Sustainability Assessment ◽  
Life Time ◽  
Cost Effective ◽  
Optical Quality ◽  
Resource Saving ◽  
Aesthetic Value ◽  
Scenario Analyses ◽  
The Social

Background: The debate on the question whether biomimetics has a specific potential to contribute to sustainability is discussed among scientists, business leaders, politicians and those responsible for project funding. The objective of this paper is to contribute to this controversial debate by presenting the sustainability assessment of one of the most well-known and most successful biomimetic products: the façade paint Lotusan®. Results: As a first step it has been examined and verified that the façade paint Lotusan® is correctly defined as a biomimetic product. Secondly, Lotusan® has been assessed and compared to a conventional façade paint within the course of a detailed product sustainability assessment (PROSA). For purposes of comparison, the façade paint Jumbosil® was chosen as reference for a conventional paint available on the market. The benefit analysis showed that both paints fulfil equally well the requirements of functional utility. With respect to the symbolic utility, Lotusan® has a particular added aesthetic value by the preservation of the optical quality over the life cycle. Within the social analysis no substantial differences between the two paints could be found regarding the handling and disposal of the final products. Regarding the life-cycle cost, Lotusan® is the more expensive product. However, the higher investment cost for a Lotusan®-based façade painting are more than compensated by the longer life time, resulting in both reduced overall material demand and lower labour cost. In terms of the life-cycle impact assessment, it can be ascertained that substantial differences between the paints arise from the respective service life, which are presented in terms of four scenario analyses. Conclusion: In summary, the biomimetic façade paint Lotusan® has been identified as a cost-effective and at the same time resource-saving product. Based on the underlying data and assumptions it could be demonstrated that Lotusan®-based façade paintings have a comparatively low overall impact on the environment. Summarizing our results, it can be emphasized that Lotusan® is the more favourable product compared to Jumbosil® according to sustainability aspects.

A Decision Support Framework for Cost-Effective and Energy-Efficient Shipping

2020 ◽  
Author(s):  
Khanh Q. Bui ◽  
Lokukaluge P. Perera
Keyword(s):  
Life Cycle ◽  
Decision Support ◽  
Energy Efficient ◽  
Life Cycle Cost ◽  
Performance Monitoring ◽  
Cost Effective ◽  
Life Cycles ◽  
Maritime Industry ◽  
Decision Support Framework ◽  
Maritime Operations

Abstract Stringent regulations regarding environmental protection and energy efficiency (i.e., emission limits regarding NOx, SOx pollutants and the IMO greenhouse gases reduction target) will mark a significant shift to the maritime industry. In the first place, the shipping industry has strived to work towards feasible technologies for regulatory compliance. Nevertheless, life cycle cost appraisal attaches much consideration of decision-makers when it comes to investment decisions on new technologies. Therefore, the life cycle cost analysis (LCCA) is proposed in this study to evaluate the cash flow budgeting and cost performance of the proposed technologies over their life cycles. In the second place, environmental regulations may support innovation especially in the era of digitalization. The industrial digitalization is expected to revolutionize all of the aspects of shipping and enable the achievement of energy-efficient and environmental-friendly maritime operations. The so-called Internet of things (IoT) with the utilization of sensor technologies as well as data acquisition systems can facilitate the respective maritime operations by means of vessel operational performance monitoring. The big data sets obtained from IoT should be properly analyzed with the help of Artificial Intelligence (AI) and Machine Learning (ML) approaches. Our contribution in this paper is to propose a decision support framework, which comprises the LCCA analysis and advanced data analytics for ship performance monitoring, will play a pivotal role for decision-making processes towards cost-effective and energy-efficient shipping.

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