15.5 Life cycle evaluation of factories: Approach, tool and case study

T. Heinemann1, S. Thiede1, K. Müller2, B. Berning1, J. Linzbach3, C. Herrmann1 1Sustainable Manufacturing and Life Cycle Engineering Research Group, Institute of Machine Tools and

Production Technology, Technische Universität Braunschweig, Germany 2 Siemens AG - Corporate Technology, Germany

3 Festo AG & Co. KG, Germany

Abstract

During the planning phase of the build up or overhaul of factories a large share of the life-cycle-spanning impact of such production facilities is determined. This fact creates a big challenge as a factory is a very complex system and there are various uncertainties regarding the mode of operation and unexpected events that can affect the costs and ecological as well as social impact of a factory during its entire life cycle. Furthermore the life cycle of a factory often even exceeds the time horizon of strategic management decisions. So do also the ecological burdens that are created by the factory. Against this background this paper presents an integrated life cycle evaluation approach for a streamlined economical, ecological and social life cycle assessment of factory systems. The approach also gets transformed into a tool which is used in order to evaluate case studies on machine and factory level. Keywords: Factory Planning; Life Cycle Evaluation; Strategic Decision Support; Total Cost of Ownership

1 INTRODUCTION

Through various drivers increasing the sustainability of factories is a major concern in manufacturing companies nowadays [1]. According to the definitions like given from the Brundtland commission this involves three dimensions: economic, ecological and social sustainability [2]. Whereas traditionally the economic perspective was and still is the major driver, companies strive towards a more balanced set of objectives. However, solving this challenge is a complex task and might cause conflicts of goals. Even more, it is important to take the full life cycle of products and processes into account in order to avoid local optimization of one phase with possible problem shifting to other life cycle phases [3]. For assessing the economic, ecological and social performance a variety of specific methods and tools (based on the basic paradigms of Life Cycle Costs/LCC, Life Cycle Assessment/LCA, Social Life Cycle Assessment/SLCA) were developed over the years. They require significant amounts of data and are rarely used in synergetic combination (e.g. usage of same data input). Even more, due to the complexity of the system those approaches are typically not used for factories as a whole with all its relevant elements. Against this background, this paper provides a framework for the life cycle evaluation of factories from economic, ecological and social perspective. Even more, this framework was already embodied into a comprehensive software tool which guides the user through the life cycle oriented evaluation process. Besides presenting the methodological background, the paper demonstrates applicability and benefits through a case study.

2 THEORETICAL BACKGROUND

2.1 Holistic system comprehension and Factory

Elements

The first step of an analysis and evaluation process is naturally the clear definition of the considered system and its boundaries. Within this paper, the factory system as a whole is the subject of investigation. It consists of three main subsystems which shall all be taken into account and analysed in an integrated manner (Figure 1) [3] [4]:

production equipment: processes/machines which form value adding process chains

technical building services: responsible for providing production conditions (in terms of moisture, temperature and purity) and energy as well as media

building shell: physical boundary of the factory system and to the outside which includes influences of the local climate

Those subsystems dynamically interact over time and therefore have to be considered as a meta-control system. However, their individual design and control involves diverse disciplines like civil, production, energy or electrical engineering which impedes a synergetic planning of the factory system. Thus, methods and tools to overcome those interdisciplinary challenges are a proper way towards more sustainable solutions.

G. Seliger (Ed.), Proceedings of the 11th Global Conference on Sustainable Manufacturing - Innovative Solutions ISBN 978-3-7983-2609-5 © Universitätsverlag der TU Berlin 2013

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T. Heinemann, S. Thiede, K. Müller, B. Berning, J. Linzbach, C. Herrmann

Figure 1: Holistic understanding of factory system.

2.2 Life Cycle Costing / Total Cost of Ownership

Life cycle costing (LCC, economic life cycle evaluation) is an extension of traditional acquisition cost oriented concepts. It considers all economically relevant monetary flows over the whole life cycle of products [3]. Therewith, LCC allows analysing trade-offs between different life cycle phases and, thus, supports to derive optimized solutions from a comprehensive perspective. Within the last years, diverse general frameworks for life cycle costing in form of standards, norms or guidelines have been developed (e.g. VDMA 34160, VDI 2884, DIN EN 60300). They differ in terms of e.g. involved life cycle phases, definition of cost portions, stakeholder perspectives, rules for calculation (e.g. consideration of discounting) or transferability to different branches [5]. In this context, Total Cost of Ownership (TCO) is a selected perspective on life cycle costs. It focuses on the operator/user perspective of the considered object and all the costs that occur during the course of ownership. Examples are costs for acquisition, installation, training, energy, maintenance, planned or unplanned downtime and disposal (e.g. [6]). To ease application, manifold software based tools which also differ in terms of scope, field of application and general functionalities were developed over the years [7]. However, those solutions tend to be quite specific for selected applications (e.g. components, specific technical equipment) and are rather focusing on single object whereas less considering systems as a whole – i.e. tools for supporting LCC/TCO calculation for factory systems with all relevant subsystems cannot be found so far. 2.3 Life Cycle Assessment

Life cycle assessment focuses mainly on environmental aspects and potential impacts throughout a product’s life

cycle from raw material acquisition through production, use, end-of life treatment, recycling and final disposal [8]. Manufacturing processes are considered as part of a product evaluation to achieve optimal overall sustainability performance of a product. Several researchers have also investigated the environmental impact of specific manufacturing processes to support the development of environmental conscious processes and the decision on process alternatives to be considered for the manufacturing of

a product. There are numbers of publications on product and process metrics to be evaluated [9]. On the factory level there is a common sense on reporting environmental, economic and social performance indicators under the framework of the Global Reporting Initiative (GRI) [10]. In this context of reporting, the efficient operation of a factory and its processes is focused and measurements and investigations on machine, workstation or line level take place partly. However, understanding a factory as a changing system with its own life cycle enabling a sustainable business has not been investigated sufficiently neither has the life cycle assessment been integrated into factory planning processes. During the factory planning phase there are a number of areas to be investigated and developed and the methodology of the life cycle assessment could deliver a comprehensive decision support e.g. for

Location planning, Rough and revised layout optimization, Material flow planning, Dimensioning and selection of technologies, Assessment of technical, economic variations and benefit

analysis, etc.

3 LIFE CYCLE EVALUATION APPROACH AND

ARCHITECTURE

3.1 Scope and requirements

There are manifold challenges to deal with as a factory is a very complex system and there are various uncertainties regarding the mode of operation and unexpected events that can affect the cost and ecological as well as social impact of a factory during its entire life cycle. Furthermore the life cycle of a factory often even exceeds the time horizon of strategic management decisions. So do also the ecological burdens that are created by the factory. Due to this fact an integrated life cycle evaluation approach needs to be developed that combines detailed financial controlling schemes and ecological as well as social impact assessment tools for the life cycle of factories in order to support sustainable decisions for future eco-factories. Through this approach the planning team for new factories or factories that need to be overhauled shall be enabled to make estimations about the total cost of ownership, the ecological impact and social issues that result from the installation and operation of a factory. After applying the life cycle evaluation approach there shall be transparency over the structure and drivers of the cost and ecological as well as social impacts of the factory and the comparison of different configuration options is possible in order to identify the most sustainable factory system. The life cycle evaluation approach is part of the total factory planning process. Within this process it is applied in an early stage as soon as first drafts of the new factory system and its sub-elements are defined. The life cycle evaluation approach is used in order to evaluate and preselect first planning scenarios which will be developed further afterwards. During the later stages of the factory planning process the life cycle evaluation approach can iteratively be used in order to assess the economic, ecological and social impact of more detailed drafts of the planned factory even regarding the chosen components of single factory elements.

process

FACTORY BUILDING

process/machine 1

process/machine n

energy

e.g. gas, oil, electricity

technicalbuildingservices

(TBS)

e.g. temperature, humidity, radiation

coolingheating

exhaust air, waste heat

production environment

energy/media

e.g. comp. air, steam, electricity

MACHINEraw materials

energy/media

auxiliaries

personnel

information

products

by-products , scrap/waste

gas emissions

heat

information

local climate

emissions

e.g. gas, wastewater

products

scrap, waste

by-products

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Life cycle evaluation of factories: Approach, tool and case study

Therefore this paper focuses mainly on the system elements of the focused factory such as the building shell, the technical building services and the production equipment itself. Given these boundary conditions the described life cycle evaluation approach is used when the decision to build a new or overhaul an existing factory at a given location has been taken and does not cover the location planning and the interaction between workstation, production line, layout, and schedule in detail. The following three main requirements have been considered developing the life cycle assessment approach of factories: 1. The life cycle evaluation of factories shall enable the

assessment of different hierarchical layers in the factory system and therefore also enable the processing of data with diverse levels of detail: System level: A comprehensive overall view considering all system elements of the factory: building shell, technical building services and production equipment on relevant ecological, economic and social effects to figure out main drivers and to prioritize system elements to take care of and reduce environmental and social impacts as well as total cost of ownership before implementation. Equipment level: A detailed comparison of alternative technologies and technical equipments, workstations, machines to figure out the best solution to implement from an overall life cycle perspective.

2. The life cycle evaluation of factory planning shall also allow different time-resolutions to investigate a one-year-period as functional unit of the factory as well as the time horizon of the overall system. So the input data regarding physical flows and monetary as well as ecological evaluation factors needs to be aggregated to datasets one a yearly basis.

3. Depending on the stage of the factory planning process the approach shall allow different levels of accuracy of the input data (e.g. estimations, default values, measurements). In early phases only basic information is available and the remaining required input data base on default data or preconfigured models. As the factory planning process precedes more and more information is available and the life cycle model of the factory can be detailed and enhanced.

3.2 Architecture of the Life Cycle Evaluation approach

The Life Cycle Evaluation approach requires a set of general settings data with predefined values, a data entry section to model the different factory elements and a calculation section to report the environmental indicators, input and output flows as well as total cost of ownership in a table and diagram format. All calculations and evaluations within the life cycle evaluation approach are based on cumulated physical input and output flows (see Figure 2) over each evaluation period within the life cycle (such as life cycle inventories) of the focused system, which can be a factory system or selected sub-systems. These flows are based on energy, media and material consumption profiles which are taken from data sheets of the single elements of the factory system as well as from (externally simulated) forecasts of the operation modes of the factory. It is important to state that during the use phase of the factory and its system elements also the utilization, shift models, downtimes, etc. are used in order to calculate (and simulate) real consumption profiles as basis for the overall physical input and output flows. Every factory element that shall be modelled gets described as a set of parameters with physical units first before any evaluation can start. All (economical and ecological) evaluation is done afterwards by transforming the physical flow data into financial or ecological impact information by multiplying it with cost/benefit-factors as well as ecological impact factors (such as CO2eq.) which are partly predefined in the tool but also can be adapted freely according to the demands of the tool’s customer. The resulting cost/benefit schedules are enriched with interest rates and depreciation allowances in order to calculate the total cost of ownership of the factory system. Social issues within the Life Cycle Evaluation Tool are addressed regarding individual indicators which correspond with the guidelines of the GRI such as the amount of non-precarious jobs that are created through the factory system and the needed level of qualification for these jobs. Following this logic the approach is coherent to the steps of a Life Cycle Assessment. The definition of the general settings of the evaluation project constitutes the goal and scope of the evaluation, the calculation of physical flows creates a life cycle inventory analysis (LCI) and the transformation to economical and ecological impact categories builds up a life cycle impact assessment (LCIA), which can be interpreted afterwards. [8]

Figure 2: Architecture of the Life Cycle Evaluation Approach.

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3.3 Data sources and tool interaction

Although the developed approach (and the derived tool) can be used as a standalone solution it can also be integrated into existing other approaches in two directions (see Figure 3): 1. Linking existing life cycle assessment data into the factory

model, 2. Using results from the factory model for an in-depth and

comprehensive environmental assessment.

Figure 3: Data processing between tools.

As companies perform more and more life cycle assessments of their products there is a great opportunity to use existing assessments on equipment or building material in the factory model. Equipment suppliers might be requested to provide life cycle assessment data of their machines offered which can be integrated into the tool. The tool provides a number of existing equipments or building types which the user can select and combine to the model of the observed factory and/or compare different factory configuration options. If there are no life cycle assessment results available the factory elements get characterized by the technical data sheet of these elements and impacts are calculated based on the general settings in the tool (e.g. emission factors, energy cost). Due to the driving force of energy efficient factories the developed factory model focuses on the global warming potential as environmental impact category. However, a more detailed assessment of the factory’s environmental impact

can be done using existing life cycle assessment software and databases. As a result of the factory model all input and output flows are reported. Without modelling the factory itself, the environmental impact of input and output flows can be characterized according to different impact categories or characterization methods of interest. All major life cycle assessment tools offer import functionalities so it is quite easy to transfer the results of the Life Cycle Evaluation Approach to such tools by matching the input and output flow to existing processes in the life cycle assessment databases for further evaluation. In order to facilitate this data ex- and import the derived Life Cycle Evaluation Tool provides an extra table of all calculated physical flows that is prepared in order to be easily transferred to third-party LCA software tools. 3.4 Interaction with further tools of a green factory

planning approach and output of the tool

Besides the interaction with other life cycle assessment tools the life cycle evaluation approach also supports green factory planning approaches (which are under development in the underlying EMC²-Fatory project) through the evaluation of planning scenarios regarding cost and ecological impacts [11] [12]. Therefore the results of the life cycle evaluation approach can be used in order to complement the results of

single-machine-focused decision making tools which are used in order to support the individual selection of production equipment. Such decision making approaches can make use of the cost schedules and the ecological impact data which result from the life cycle evaluation tool. In case that the cost determining behaviour of some elements of the factory system is highly dynamic and cannot be estimated sufficiently, energy oriented factory system simulation approaches can give valuable input to the life cycle evaluation approach [13] [14]. Input from such a factory system simulation would be an exact prediction of the physical flows which are processed by the single factory elements such as energy and the yearly demand of auxiliary materials [15].

4 APPLICATION OF THE LIFE CYCLE EVALUATION

TOOL

The Life Cycle Evaluation approach has been embodied into a software solution as a supporting tool to the factory planning process. The application of the tool follows a workflow which is depicted in Figure 4 and gets guided via an MS Excel™

based interface.

Figure 4: Workflow for the usage of the LCE Tool. Before the modelling of a factory planning project the basic conditions of this project get defined in the Define Settings section. The definition of settings incorporates the definition of possible physical flow variables, their prices and the individual rate of price increase as well as their individual carbon footprint (CO2eq). Furthermore the settings section enables the user to modify the operating hours per year, the projection period (up to 30 years) for the factory planning project and the general design of the building shell (one floor vs. two floors, concrete walls with/without windows, etc.). After the definition of the general settings, the user can model the single elements of the factory system such as machines, technical building services, the building shell and basic information about the employed workforce. The modelling of the technical elements is illustrated in Figure 5 using the example of the module Add Machine.

Figure 5: Machine modelling within the LCE Tool.

T. Heinemann, S. Thiede, K. Müller, B. Berning, J. Linzbach, C. Herrmann

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Life cycle evaluation of factories: Approach, tool and case study

For each of the technical elements a set of general parameters needs to be set. These parameters are annual operating hours, required space, lifetime, maintenance interval (mean time between maintenance operations), maintenance expenses per average maintenance operation, initial investment costs, period of installation within the projection period, replacement after lifetime (yes/no) and the amount of identical machines. Besides these general parameters the utilization (process, idle) as a percentage of the operating hours, the state dependent electrical power consumption and all relevant physical input and output flows need to be defined. The physical flows can be selected from the list of physical flows which has been defined in the settings section. Having modelled the factory system and all its technical elements in the described way, it is possible to check and correct single variables and their values using the Show

Components module. If all inserted data is correct the Calculation module can be run. This module accumulates all parameterized physical flows individually per evaluation period also regarding the states of the technical system elements. After the period based accumulation of physical flows has been done these flows get multiplied by the predefined economical prizes and ecological impact factors. The results of these calculation routines as well as further sustainability indicators that have been selected from the GRI [10] get visualized in the Cockpit module which generates printable reporting sheets that have the right format in order to support decision making meetings of the observed factory planning project. The comparative assessment of different factory configuration options or different machines and process technologies gets done through the individual modelling of these scenarios and the later comparison of the individual reporting sheets. 5 CASE STUDY

In order to show the application and potential of the Life Cycle Evaluation Tool a case study based on a generic SME case from metal processing sector has been conducted. For reasons of simplification, this case study only regards the physical flow of electrical energy in the use phase of the technical factory elements. The factory elements and general settings of this enterprise are depicted in Table 1:

Table 1: Selected model parameters for generic small enterprise in the metal processing sector.

Equi

pmen

t Machines 3x Milling, 3x Turning, 3x Grinding Technical Building Service 1x Air compressor Building shell 1 building, aerated concrete

walls, 1 floor, no windows

Tim

e Annual operating hours 1650 h/a Projection period 30 years

Ele

ctric

ity Electricity prize 0,15€/kWh

Ecological impact 0,559 kg CO2eq/kWh Energy mix European Energy Mix

Fina

nce

Space costs 8 €/m² Interest rate 3% Inflation 1% Calculation options Dynamic discounting and inflation

rates enabled.

Assu

mpt

ions

The environmental impact of the setup & disposal phase of the factory result only from the setup and disposal of the building shell. The ecological impact of the production equipment and technical building services results only from its usage, i.e. in this case only from its energy consumption. The data of the ecological impact of four generic types of building shells has been imported from a tool that creates LCAs for buildings [16].

Together with the general settings and the detailed modelling of the technical factory elements the Life Cycle Evaluation Tool calculates the economical and ecological performance of the observed factory system. The following figures are taken directly from the reporting sheets of the Life Cycle Evaluation Tool. They illustrate some of the basic results, regarding economical, ecological and energy oriented issues. Figure 6 shows the development of the TCO of the entire system as well as the cost development of the factory elements. One conclusion from this diagram is in year 15 the cost development of the production equipment exceeds the cost of the building shell although this has been by far the largest initial investment. Figure 6 also illustrates the cost fractions of the factory elements after the projection period of 30 years. Here the negligible impact of the technical building services can be observed. (This is only an effect of the specific case study and cannot be generalized, of course.)

Figure 6: Cost development (a) and cost fractions (b) of the

factory elements over 30 years. Figure 7 shows the contribution of the life cycle phases to the ecological impact of the factory system. Under the given assumptions and restrictions the use phase of the factory is dominant. Within the use phase the usage of the production machinery determines most of the ecological burden compared to the technical building services.

Figure 7: Contribution of life cycle phases to ecological impact

of the factory system.

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Figure 8 shows the state related electrical energy consumption of machines and technical building services during the factory use phase. By comparing both diagrams becomes obvious that in this case the energy consumption of the building services is relatively small compared to the production equipment. Looking at the production machines it stands out that the energy consumption during idle mode seems to be quite high. So the result visualization of the LCE Tool can even be used to identify fields of action for meaningful improvement measures of the factory planning project.

Figure 8: State related electrical energy consumption of

machines and TBS during the factory use phase 6 CONCLUSION AND OUTLOOK

This paper presents a comprehensive Life Cycle Evaluation Approach and Tool for factory systems that is exemplarily applied to a case of a generic small enterprise from the metal processing industry. This LCE Tool incorporates externally generated data about ecological impacts and cost factors in a structured calculation routine. It enables the life cycle spanning evaluation of factory planning projects and generates indicators like e.g. total cost of ownership and ecological impact (global warming potential). It has to be stated that LCE Tool depends on a good data quality as an input and that the technical and logical meaningfulness of the evaluated scenarios or factory configuration options needs to be confirmed externally as this cannot be supported by the LCE Tool. Nevertheless the LCE Tool demonstrated its potential in order to facilitate the economical and ecological evaluation of different options in factory planning projects already at a very early stage of the factory planning process. Future work will focus on more detailed case studies that represent real industry scenarios and innovative technological developments of the underlying EMC²-Factory project. 7 ACKNOWLEDGMENTS

The research leading to these results has received funding from the European Community's Seventh Framework Programme (FP7/2007-2013) under grant agreement n° 285363. The funded project’s title is Eco Manufactured

Transportation Means from Clean and Competitive Factory”

[EMC²-Factory]. For further information about the project visit the website www.emc2-factory.eu. 8 REFERENCES

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