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Deliverable 2.1
Efficiency Framework concept description
Date: 01/03/2016
WP2 Efficiency framework
T2.1 Efficiency framework concept
Dissemination Level: Public
Website project: www.maestri-spire.eu
Total Resource and Energy Efficiency
Management System for Process Industries
Deliverable 2.1
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Authors
Name: António
Surname: Baptista
Organisation: INEGI
Name: Emanuel
Surname: Lourenço
Organisation: INEGI
Name: Eduardo
Surname: Silva
Organisation: ISQ
Name: Stanisław
Surname: Plebanek
Organisation: LEI Poland
Name: Elżbieta
Surname: Pawlik
Organisation: LEI Poland
Name: Mariana
Surname: Gil
Organisation: ISQ
Revision history
REVISION DATE AUTHOR ORGANISATION DESCRIPTION
01 23-02-2016 A. Baptista INEGI 1st draft version
01 25-02-2016 M. Holgado
D. Morgan UCAM 1st revision version
02 26-02-2016 E. Silva
M. Gil ISQ 2ndrevision version
03 29-02-2016 A. Baptista
E. Lourenço INEGI 3rd revision version
04 01-03-2016 E. Silva ISQ Final draft version
05 01-03-2016 M. Estrela ISQ Final version
Deliverable 2.1
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Table of contents
1 Executive Summary ......................................................................................................................... 8
2 Introduction ...................................................................................................................................... 9
3 Eco-efficiency & Efficiency tools and methods ........................................................................ 11
3.1 The eco-efficiency and efficiency assessment tools within the efficiency framework ..11
3.1.1 Eco-efficiency assessment methods and application - ecoPROSYS© ......................11
3.1.2 Efficiency assessment methods and application: Multi-Layer Stream Mapping -
MSM© ..............................................................................................................................................12
3.2 Eco-efficiency and efficiency tools integration - structure and data flow ......................17
3.2.1 Eco-efficiency assessment – ecoPROSYS© ....................................................................17
3.2.2 Efficiency assessment - MSM© .........................................................................................21
3.3 The purpose to integrate ecoPROSYS© and MSM© ............................................................28
3.4 Consequences and critical factors for the efficiency framework.....................................32
3.5 Overview of the efficiency framework concept .................................................................34
4 Management System and standards ........................................................................................ 36
4.1 Overview of Standards ............................................................................................................36
4.1.1 ISO 9001 ...............................................................................................................................36
4.1.2 ISO TS 16949 ........................................................................................................................47
4.1.3 ISO 14001 .............................................................................................................................48
4.1.4 ISO 14031 .............................................................................................................................49
4.1.5 ISO 14040 .............................................................................................................................50
4.1.6 ISO 14045 .............................................................................................................................51
4.1.7 ISO 50001 .............................................................................................................................52
4.2 Plan – Do – Check – Act approach overview ......................................................................53
4.2.1 PCDA conceptual framework to be integrated with efficiency framework ............53
4.3 ISO 14045 integration with the efficiency framework ..........................................................54
4.4 Consequences and critical factors for the efficiency framework.....................................56
5 Definition of the Life Cycle Costing analysis approach ........................................................... 57
5.1 Overview of the approaches..................................................................................................57
5.1.1 Life cycle costing ...............................................................................................................57
5.1.2 Process-Based Cost Modelling .........................................................................................58
5.1.3 Value Modelling .................................................................................................................60
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5.2 Economic approaches aiming for Sustainable Production Perspective ......................... 61
5.2.1 Life cycle perspective ....................................................................................................... 61
5.2.2 Input Parameters ............................................................................................................... 62
5.2.3 Outputs of the approach ................................................................................................. 63
5.3 Consequences and critical factors for the efficiency framework .................................... 64
6 Definition of the environmental assessment approach .......................................................... 66
6.1 The environmental assessment within the efficiency framework ...................................... 66
6.2 Life cycle thinking: methods and application ...................................................................... 66
6.3 Life cycle environmental assessment methodology ........................................................... 67
6.4 Environmental assessment approach ................................................................................... 69
6.4.1 Environmental assessment structure and data flow ..................................................... 69
6.4.2 Environmental characterisation and simulation ........................................................... 73
6.4.3 Life cycle inventory databases ....................................................................................... 74
6.4.4 Life cycle environmental impact assessment ............................................................... 78
6.5 Consequences and critical factors for the efficiency framework .................................... 80
7 Final remarks .................................................................................................................................. 83
8 Bibliography ................................................................................................................................... 85
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Figures
Figure 1 – Main modules of the efficiency framework ...................................................................... 9
Figure 2 - Example of a common VSM of a Metalworking Industry. .............................................13
Figure 3 - MSM© Visual Management ...............................................................................................14
Figure 4: MSM© efficiency scorecard ................................................................................................14
Figure 5 - MSM© ratio calculation ......................................................................................................16
Figure 6 – Schematic representation of MSM©’ bottom-up analysis and aggregation ............16
Figure 7 - ecoPROSYS© Framework ....................................................................................................19
Figure 8 - Schematic representation of the MSM© methodology .................................................22
Figure 9 - Efficiency calculations through MSM© .............................................................................23
Figure 10 - MSM© Data flow and results ............................................................................................24
Figure 11 - Value added (VA) and non-value added (NVA) for deterministic variable. ...........25
Figure 12 – Value added (VA) and non-value added (NVA) for non-deterministic variable ...25
Figure 13 - Value added and non-value added for energy ..........................................................25
Figure 14 – Functional and hierarchical perspectives .....................................................................26
Figure 15 - Vision of KPIs as continuous Improvement enablers for enhanced efficiency ........26
Figure 16 - Example of resource efficiency MSM© dashboard ......................................................27
Figure 17 - Example of operational production efficiency dashboard ........................................27
Figure 18 – Example of summary analysis dashboard .....................................................................27
Figure 19 - Example of MSM© cost analysis ......................................................................................28
Figure 20 - Generic approach overview of the integration of ecoPROSYS© and MSM© ..........29
Figure 21 - Role and outcomes of the MSM© & ecoPROSYS© approach ....................................30
Figure 22 - Structure of a KPI ................................................................................................................30
Figure 23 – Example of ecoPROSYS© and MSM© performance indicators .................................31
Figure 24 - Overview of the integration of MSM© and ecoPROSYS© ...........................................32
Figure 38 - Conceptual Efficiency Framework .................................................................................35
Figure 26 - Example of a standardized work plan for supervisors. .................................................37
Figure 27 - Example of manager's routine (part of standard work for leaders). ..........................43
Figure 28 - Example of an assessment observation and rating form (Mann, 2010). ...................43
Figure 29 - An example of Lean Assessment results presented on a radar chart. ......................44
Figure 30 - Management system audit. .............................................................................................45
Figure 31 - Graphic description of the PDCA wheel (Marchwinski (ed.), 2014) ..........................53
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Figure 32 -Phases of an eco-efficiency assessment (ISO, 2012) .................................................... 55
Figure 33 - Schematic PBCM approach – Adapted from (Ribeiro, Peças, et al. 2013) ............. 60
Figure 34 - Life Cycle Cost Approach ............................................................................................... 62
Figure 35 - PBCM to model production phase ................................................................................. 63
Figure 36 - Value Profile Modulation .................................................................................................. 64
Figure 37 - Working procedure for an LCA (ISO, 2006a). The doted lines indicate the order of
procedural steps and the dotted line indicates interaction. ......................................................... 68
Figure 38 - Theoretical structure proposed for production system concept within the
environmental assessment. ................................................................................................................. 72
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Tables
Table 1 - Example of possible KEPI .....................................................................................................20
Table 2 - Example of value indicators ................................................................................................20
Table 3 - Example of eco-efficiency indicators ................................................................................21
Table 4 - Possible set of value general and specific indicators. (Adapted from Baptista, et al.
2014) .......................................................................................................................................................60
Table 5 – Relation between eco-efficiency options and eco-efficiency principles ...................73
Table 6 – Identification and description of available LCA databases .........................................75
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The MAESTRI project aims to advance the sustainability of European manufacturing and
process industries. This will be achieved by providing a management system in the form of a
flexible and scalable platform and to guide and simplify the implementation of an innovative
approach in organizations with the Total Efficiency Framework, which encompasses:
Efficiency Framework, Management Systems and Industrial Symbiosis.
The overall aim of the efficiency framework is to encourage a culture of improvement within
manufacturing and process industries by assisting the decision-making process, supporting
the development of improvement strategies and helping to define the priorities for
companies’ environmental and economic performance.
This document presents a broad vision of the efficiency framework concept, along with all
the fundamental modules within the Efficiency Framework, namely: Eco-efficiency
(ecoPROSYS©) and Efficiency (MSM©) methods; Management standards (ISO standards);
Cost and Value modelling; and Environmental Assessment.
For each module, a description is given not only for the introduction to its subject domain,
but also a complementary review of how the integration of the modules would be
performed subsequently in the next project activities.
1 Executive Summary
Deliverable 2.1
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The main conceptual contribution of the MAESTRI project consists in the development of a
flexible and holistic integrated Framework to foster manufacturing sustainability in process
industry, the “Total Efficiency Framework”. Based on four main pillars, it aims to overcome the
current barriers and promote sustainable improvements by addressing the following aspects:
An effective Management System targeted for process and continuous
improvement;
Efficiency assessment tools to define improvement and optimization strategies and
support decision making process;
Integration with Industrial Symbiosis concept focusing on material and energy
exchanges;
An Internet of Things Platform to simplify the concept implementation and ensure an
integrated control of improvement process;
In this document we will focus on the conceptual efficiency assessment framework, which
consists of four modules, depicted in the figure below, and their integration.
Figure 1 – Main modules of the efficiency framework
This integration enables an overall efficiency performance assessment from environmental
(including resource and energy efficiency), value and cost perspectives. Such integration
encompasses Environmental Performance Evaluation with Environmental Influence and
Cost/Value assessment models through a life cycle perspective. The aim is to optimize all
process elementary flows by clearly assessing resource and energy usage (valuable /
wasteful), and each flow efficiency. Decision support via value-adding optimization is
foreseen among the integration of the modules.
Eco-efficiency & Efficiency
Environmental impact assessment
Efficiency Framework
ConceptStandards
LCC Structure
2 Introduction
Deliverable 2.1
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The modules of the efficiency framework will be outlined in order to ensure a scalable and
flexible integration. The main goal of each module is stated as the following:
a) Eco-efficiency & Efficiency
Aiming the integration of two innovative methodologies, namely the Multi-layer Stream
Mapping (MSM©) – to assess overall efficiency performance, and Eco-Efficiency Integrated
Methodology for Production Systems (ecoPROSYS©) - to assess and evaluate eco-efficiency
performance.
b) Standards
To identify the standards / methodologies, currently available, which can support and
enhance the efficiency framework.
c) LCC Structure
To define the structure for the LCC analysis, and integrate the LCC structure within the
efficiency framework, taking into account Cost and Value modelling, as well as accounting
approaches.
d) Environmental Impact Assessment
Define and incorporate a structure to be used to assess and evaluate the environmental
influence of production systems, as part of the efficiency framework.
Deliverable 2.1
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The Eco-efficiency & Efficiency is the core part of the Framework, consisting on the
integration of two innovative methodologies. ecoPROSYS© is an integrated methodology
which allows the evaluation and assessment of eco-efficiency performance. MSM© is a lean
based method, developed to assess overall efficiency performance. Next sections aim to
describe these methodologies.
3.1 The eco-efficiency and efficiency assessment tools within the efficiency
framework
3.1.1 Eco-efficiency assessment methods and application - ecoPROSYS©
The Eco-Efficiency Integrated Methodology for Production Systems (ecoPROSYS©) approach
relies on the use of a systematized and organized set of indicators easy to
understand/analyse, aiming to promote continuous improvement and a more efficient use
of resources and energy. The goal is to assess eco-efficiency performance in order to support
decision-making and enable the maximization of product / processes value creation and
minimization of environmental burdens.
Eco-efficiency, the base concept of ecoPROSYS©, measures the relationship between
environmental and economic development of activities as sustainability aspects that
evidence more value from lower inputs of material and energy and with reduced emissions.
Eco-efficiency is commonly expressed by the ratio between value and environmental
influence.
𝑬𝒄𝒐 − 𝑬𝒇𝒇𝒊𝒄𝒊𝒆𝒏𝒄𝒚 =𝑷𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒐𝒏 𝒐𝒓 𝑺𝒆𝒓𝒗𝒊𝒄𝒆 𝑽𝒂𝒍𝒖𝒆
𝑬𝒏𝒗𝒊𝒓𝒐𝒏𝒎𝒆𝒏𝒕𝒂𝒍 𝑰𝒏𝒇𝒍𝒖𝒆𝒏𝒄𝒆 (1)
According to the WBCSD (Michelsen, et al., 2006) the two most common goals of eco-
efficiency assessments are: (i) measuring progress and (ii) internal and external
communication of economic and environmental performance. In order to improve overall
performance, the WBCSD established seven principles (Lehni, et al., 2000):
• Reduce material intensity;
• Reduce energy intensity;
• Reduce dispersion of toxic substances;
• Enhance recyclability;
• Maximize use of renewable resources;
• Extend product durability;
• Increase service intensity.
From a conceptual point of view, in ecoPROSYS© methodology the indicators are generated
by a combination of three components: (1) Environmental performance evaluation (2) Life
Cycle Assessment, and (3) Cost and Value Assessment. The interaction between the different
3 Eco-efficiency & Efficiency tools and methods
Deliverable 2.1
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modules leads to the decision support indicators and to the environmental, value and eco-
efficiency profiles.
In addition, by connecting environmental influence with the inventory data and the goals
defined by the organization for eco-efficiency principles, the ecoPROSYS© methodology
enables also the simulation of alternative scenarios and the evaluation of these goals and
objectives. For the cost assessment, any change made on the production cost is reflected in
the accounting indicators towards alternatives analysis.
3.1.2 Efficiency assessment methods and application: Multi-Layer Stream Mapping - MSM©
In the past decades remarkable progress has been achieved in terms of productivity gains,
either with the introduction of advanced production technology and management systems,
or due to optimised labour management and efficient consumption of raw materials or semi-
finished products. Lean production principles and tools play an important role regarding
productivity and efficiency improvements greatly reinforced the competitive progress within
organizations. Lean tools, like Value Stream Mapping (VSM), enable companies to focus on
the value added activities, and to consequently identify waste, thus, leading to the
introduction of a culture of continuous improvement (Haefner et al., 2014, Shook and Rother,
1999). VSM is a simple and effective method used for the visualisation of value streams in
which the current value of waste within the production systems is exposed. The analysis
focuses on the route of a product or service from the moment that the order is placed until its
delivery (Shook and Rother, 1999). This analysis provides a comprehensive examination of all
processes involved, thus breaking the barriers imposed by each sector or processing unit that
form the value chain. One of the major goals of VSM diagram is to determine, and clearly
distinguish, the productive and non-productive time among the production of a given
product or during a service provision. The "productive time" should be interpreted as the time
needed for the process to occur (time required to add value). The "non-productive time” is
the time spent on transport and waiting (time that adds no value, this is, waste, to the
product or service). Besides the productive and non-productive time of processes / services,
the VSM also considers material flows and information flows inherent to the production
system (such as work in progress quantification and other stock figures analysis).
The MSM© - Multi-layer Stream Mapping was developed between 2012 and 2013 at INEGI in
order to create a method / tool able to achieve an overall efficiency assessment of
production systems. It takes into account the base design elements from the VSM (value
streams), in order to identify and quantify all "value adding" and "non-value adding" actions,
as well as, all types of waste and inefficiencies along the production system (as in - Arbulu et
al. , 2003, Kuhlang et al. , 2011). Therefore, the great similarity to the VSM tool consists in the
identification and quantification, at each stage of the process system, of "what adds value"
and "what does not add value" to a product or service. The basic principle of the MSM©
relates to Lean Principles (i.e. clear definition of waste and value dichotomy).
Deliverable 2.1
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The MSM© is founded by the following main pillars:
Pillar 1: Assess value addition versus not adding value
A value stream mapping consists basically in the collection of all actions (actions that add
value – VA; and actions that do not add value – NVA) that are required to bring a product or
a group of products through the main flow, starting with the customer and ending with the
raw-material (upstream). The primary goal is to identify all types of waste in the value stream
flow and processes in order to take actions to eliminate/ mitigate these, by analysing the
Value Stream Map.
Figure 2 - Example of a common VSM of a Metalworking Industry.
Pillar 2: Systematically evaluate variables (and KPIs) through efficiency ratios
Several resources can take place as variables, for instance energy, material and fuel
consumption, the amount of emissions and waste treated and routed appropriately. For
instance, if efficiency performance is increasing this means that the value being added to
the product has increased, or there is less waste, hence increased resource efficiency.
The following steps are required, in order to systematically evaluate a set of variables:
All the variables that influence the stages of the value chain should be identified;
Key Performance Indicators (KPI) for the variables should be created/identified in
the form of ratios;
Values of the ratios should be always within the range [0-100%];
(KPI )should be always created in order to be maximized;
The analysis of variables with the MSM© is almost unlimited, for instance, the following
variables can be assessed:
Electrical energy
Raw Material
Fuel
CO2 Emissions reduction
Transport
WTS
(input)
Cleaning
WTS
Coating bolt
holes
(manually)
Mixing paint
(pneumatic
mixer)
Applying
primer coat
Drying
primary
coat
Coating
Inspection
2 2 2 2 2 2 2
VA 0,75 h 0,50 h 0,50 h 1,50 h 3,00 h 0,50 h PT 6,75 h
NVA LT 7,89 h
0,38 h 0,03 h 0,20 h 0,15 h 0,15 h 0,06 h WT 1,14 h
𝜑 86%0,70 h0,53 h1,13 h0,17 h
- 66% 94% 71% 89%
Production
Time (hours)
0,56 h3,15 h1,65 h
0,17 h
91% 95%
Deliverable 2.1
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Waste elimination
Toxic materials reduction
Pillar 3: Apply simple methodologies of Visual Management
For a faster assessment of the efficiency, visual management attributes were added, by
relating a very common key of 4 colours (red, orange, yellow, green) in the positive direction
of efficiency, from 0% to 100% (Figure 3).
Figure 3 - MSM© Visual Management
Pillar 4: Aggregate efficiency of unit processes (columns) and the variables (lines)
The production system’s overall performance is shown in the MSM© scorecard (Figure 4). This
layout quantifies the global and unit process efficiency for each processes variable. The
data shown in Figure 4 is of great importance, and useful for assessing efficiency as well as
for quantifying and allocating losses. The outcomes of the MSM© approach are presented as
a dashboard which includes the global production’s system efficiency, the flow efficiency
and the unit process efficiency. Alongside the MSM© “Snapshot” presents a simple efficiency
dashboard, which includes visual management attributes, i.e. colour labels.
Figure 4: MSM© efficiency scorecard.
Process Efficiency 100 - 90%
Process Efficiency 89 - 70%
Process Efficiency 69 - 40%
Process Efficiency <40%
Process Stream Analysis
Mu
lti-La
ye
r Stre
am
Ma
pp
ing
Efficiency Process Stream Analysis
Cleaning
WPTS
Coating
bolt holes
Mixing
paint
Applying
primer Drying Inspection
2 2 2 2 2 2
Unit Process Efficiency
Process Efficiency 100 - 90% Process Efficiency 69 - 40%
Process Efficiency 89 - 70% Process Efficiency <40%
79% 83% 70% 69% 85% 90% 79%
Production Time (hours) 67% 94% 70% 90%
MSM
(reso
urce
efficie
ncy)
90% 80% 82%
Electrical Energy Consumption 69% 65% 70% 65% 80% 95% 74%
85% - 85%Diesel Consumption (kg) - - - 85%
Paint & Curing agent & Diluent
Consumption (kg)- 90% - 35% - - 63%
Auxiliary Material Consumption (kg) 100% - - -
Proper Waste Disposal (kg) - - - -
- - 100%
- 95% 95%
Key
Global efficiencyMSM® efficiency card
Deliverable 2.1
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The main goal of this novel framework is to overcome some of the limitations of the existing
methodologies, for instance:
lack of efficiency performance assessments of the individual processing units, process
parameters and of the overall system (Paju et.al 2010 and Li et.al, 2012)
lack of a direct evaluation of resource efficiency (Faulkner et.al, 2014)
only focus quality aspects which can be seen as a shortcoming, since it has a
reduced spectrum to meet the current industrial challenges, particularly in terms of
resource efficiency (Haefner et.al, 2014)
The MSM© - Multi-Layer Stream Mapping approach aims to assess the overall performance of
a production system, while evaluating the productivity and efficiency of resource utilization
(e.g. energy, raw materials, various consumables, etc.) as well as evaluate the costs related
to missuses and inefficiencies and other process and domains variables (e.g. quality aspects,
specification metrics, bottlenecks, etc.). Despite the MSM© containing an intrinsic link with
the lean tool VSM, this new approach introduces disruptive innovations related with its
applicability and wide assessment solutions for complex systems analysis.
The MSM© is intended to be used, not only for analytical evaluation, but also to support the
decision making process, namely for greenfield design or online systems monitoring, related
with:
• The identification of the most critical resource or process parameters;
• The identification and quantification of inefficiencies of a given production system
and unit process;
• The quantification of resource and operational efficiency, and overall production
system performance and costs;
• The implementation of improvement actions and optimization actions;
• The evaluation of efficiency progress and to incite for continuous improvement
sustainability within organizations.
The MSM© approach is intended to encourage the pursuit of maximum efficiency, (i.e. 100%)
and continuous improvement mind-set along teams and workforce. Unlike the VSM, that
focuses on the added value and non-added value of the time dimension, the innovative
approach of MSM© is to assess the overall performance, taking into account the efficiency
of each process parameters, which are associated to one or more processing units and
variable dimensions “layers”, hence the "Multi-Layer Stream Mapping" and efficiency
integration analysis.
One of the cornerstones of the methodology involves the systematic nondimensionalization
of the variables that characterize the production system, with the ratio between the portion
of the “variable that adds value” to the product and the “total of the variable that enters
the unit process” (Figure 5).
Deliverable 2.1
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Figure 5 - MSM© ratio calculation
Other key aspect is that the unit process efficiency and the overall efficiency performance
of a production system are always evaluated between 0 and 100%, to assure homogeneous
and consistent aggregation and evaluation analysis. Therefore, it is possible to consecutively
aggregate the efficiency along production system, sectors, or even plants, adopting a
bottom-up analysis (Figure 6).
Figure 6 – Schematic representation of MSM©’ bottom-up analysis and aggregation
From a conceptual point of view, in MSM© methodology, the efficiency performance is
generated by quantifying, at each stage of the process system, "what adds value" and
"what does not add value". Moreover, besides assessing if resources, process and other
domains are used to their full potential, the costs related with misuses / inefficiency situations
are also possible to quantify in a simplified manner, in order to support decisions. Furthermore,
it is possible to scrutinize “how”, “where”, and “how much” can a unit process and/or a
production system improve its financial, environmental and global performance. These
aspects are of great importance for decision-making.
In addition, by taking into account scenario values of “what adds value" and "what does not
add value", the MSM© methodology enables also the simulation of alternative scenarios
regarding process efficiency, or even the effect on global efficiency. The scenarios can also
Φ“Value added” fraction
“Value added” fraction + “Non-value added” fraction
74% 70% 60% 𝑥%
(…)
n n n n
Time
Energy
Cost
Variable N (…) (…) (…) (…)
𝑥%
72% 89% 60% 𝑥%
80% 70% 30%
P2 P3 PN
70% 50% 90% 𝑥%
P1
P2
60%
(...)
P2
90%
75%
(...)
(...)
Processes
Lines
Plants
Group
74% 70% 60% 𝑥%
(…)
n n n n
Time
Energy
Cost
Variable N (…) (…) (…) (…)
𝑥%
72% 89% 60% 𝑥%
80% 70% 30%
P2 P3 PN
70% 50% 90% 𝑥%
P1
74% 70% 60% 𝑥%
(…)
n n n n
Time
Energy
Cost
Variable N (…) (…) (…) (…)
𝑥%
72% 89% 60% 𝑥%
80% 70% 30%
P2 P3 PN
70% 50% 90% 𝑥%
P1
Deliverable 2.1
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refer to “what if scenarios”, for instance if an improvement action is to be implemented, the
efficiency performance can be foreseen, along with the avoided costs due to improvement.
3.2 Eco-efficiency and efficiency tools integration - structure and data flow
3.2.1 Eco-efficiency assessment – ecoPROSYS©
When applying ecoPROSYS© methodology, the first task concerns the goal and scope
definition, in line with related existing standards [(ISO, 2012), (ISO, 2006b)]. During this task, the
definition of functional unit is of most importance, once represents a functionally equivalent
basis to evaluate production systems. In practice, the functional unit normalizes data based
on equivalent use to provide a reference for relating process inputs and outputs to the
inventory and impact assessment across alternatives. In addition, it is also important to define
system boundaries. Being a product system composed by unit processes connected by flows
of intermediate products which perform one or more defined functions, the system
boundaries determine which unit processes shall be included within the assessment. In this
matter, the ecoPROSYS© methodology follows the ISO 14044 proposed methodology to
define the system boundaries (ISO, 2006b). According to the ISO 14045, the boundary limits
should be the same for the environmental assessment and for product value quantification.
Any deviation has to be properly justified (ISO, 2012), and taken into account when result are
being interpreted.
Subsequently, data collection is also a very important task since the quality of the input data
influences considerably the final results and conclusions. For this reason, the collected data
must quantify all the input and output flows, preferentially for each unit process, regarding
environmental, cost and value data.
As a result, and considering that industrial production systems are usually complex operations,
it is expected that the input and output flow quantification process generates a large
volume of data, which clearly makes the decision making process more difficult. In this sense,
the ecoPROSYS© methodology aims to generate key performance indicators (KPIs). In
general terms, these indicators correspond to quantifiable metrics that allow the
performance measurement, highlighting the "key" issues, meaning those of most importance
to understand the system performance and simplify the decision making process.
From a conceptual point of view, these indicators are generated by three components, as
previously referred: (1) Environmental performance evaluation (2) Life Cycle Assessment, and
(3) Cost and Value Assessment.
The Environmental Performance Evaluation is a process analysis of environmental aspects
considering the integration of environmental politics, strategies, goals and the targets
defined by the company. The main goal of this component is then to characterize the
intensity and significance of environmental aspects according the eco-efficiency principles.
For this reason, this component is also crucial to integrate environmental protection and
economic growth objectives of the company into the assessment.
Deliverable 2.1
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Quantitatively, the environmental influence generated by the different elementary flows of
the system, is determined through the implementation of a life cycle perspective, namely,
through Life Cycle Assessment (LCA). The ISO 14040:2006 defines LCA as the "compilation
and evaluation of the inputs, outputs and potential environmental impacts of a product
system throughout its life cycle" (ISO, 2006a). The main advantage of implementing a life
cycle perspective is to provide an overall view of the environmental influence of the system,
avoiding the shift of problem from one stage to another. In this sense, in addition to what has
been mentioned, the assessment of each unit process allows the identification of critical
aspects, critical processing parameters and the influence of these factors and parameters to
the environmental performance of the production system. Also using LCA, it enables the
methodology to assess the impact of different system alternatives at the level of the
materials, design, planning, and use different technologies.
The definition of “Value” component in determining the eco-efficiency of a production
system is decisive for the interpretation of results, either in the statement of evolution, or in
comparison with other scenarios or alternatives. Consequently, the Cost and Value
Assessment (CVA) component intends to quantify the economic performance, as well as
determining the importance of each type of cost factor. The production system value, or
value of its outcome, can be a representative amount of their income or costs through
common economic analysis indicators, or a functional feature that is accepted as a metric
associated with productivity.
However, through the rationale of ecoPROSYS© methodology, the use of eco-efficiency as a
metric to foster sustainability implies to assess the product or system performance on a life
cycle perspective. For this, Life Cycle Cost (LCC) can be used as a value related quantity,
since it integrates all the cost associated with a product throughout its life from “cradle to
grave” (Ribeiro, et al., 2008). The LCC methodology evaluates the costs of a product related
to materials, production, transportation, use and end of life. It allows the designer to estimate
the contribution of the various cost factors in the different stages of the life cycle.
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Figure 7 - ecoPROSYS© Framework
Then, the interaction between the EPE, LCA and CVA leads to the decision support indicators
and to the environmental, value and eco-efficiency profiles (Figure 7). The environmental
assessment is a central topic of an eco-efficiency methodology, along with the technical or
physical economic value. The aim of the economic value module is to feed the eco-
efficiency ratios with relevant economic indicators. Actually, the ratio between these two
topics intend to help companies manage the links between environmental and value
performance. The ultimate goal is to provide a clear vision of the system baseline
performance, and to assist the implementation of improvement strategies, which aim to
enhance company competitiveness and environmental performance.
As a consequence of the integration of three components, the resulting decision support
indicators can be considered as Key-Environmental Performance Indicators (KEPI), Eco-
efficiency Indicators and Cost and Value indicators. The KEPI can be presented as specific or
general data. This means that the key indicators may be quantified in terms of physical
values (kg, kWh, m3), by impact category results (kg CO2 eq., kgSO2 eq.), by damage
category (DALY1, PDF2) or even general environmental influence (Pt3). Table 1 presents some
of the KEPI that can be considered to characterise a production system.
1 Disability-adjusted life years.
2 Potentially Disappeared Fraction.
3 Eco-points
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Table 1 - Example of possible KEPI
KEPI
Overall Amount Total amount of material (kg)
Specific Environmental Aspect Paint consumption (kg or Pt) Energy consumption (kWh or Pt)
Environmental Relevance Waste sent to landfill (kg) Waste sent to incineration (kg)
Impact category Greenhouse Gas Emission (kgCO2 eq.) Acidification (kgSO2 eq.)
Damage by Category Total impact on Human Health (DALY)
Overall Environmental Damage Total environmental influence (Pt)
Using the same perspective, the cost and value indicators can be presented as economic
value data or as functional values that characterize the production system, as presented in
Table 2.
Table 2 - Example of value indicators
Value indicators
General Value Indicators
Amount of goods produced (ton, kg, #)
Durability (years)
Sales (€)
Net sales (€)
Specific Value Indicators
Gross Value Added - GVA (€)
Gross Value of Production - GVP (€)
EBITDA (€)
Overall Production Costs
Production Cost per process (€)
Finally, the eco-efficiency indicators intend to help companies on managing links between
environmental and value performance. Their ultimate goal is to provide a clear vision of the
system baseline performance, and to assist the implementation of strategies by connecting
the various levels of the system with clearly defined targets and benchmarks. For this reason
they can also be used to evaluate trends by comparing the results along defined periods of
time. As presented in Table 3, eco-efficiency indicators are calculated by using a value
indicator and the environmental influence (e.g. energy consumption- Pt). Besides the eco-
efficiency ratios, the ecoPROSYS© methodology also proposes a set of performance
indicators. These performance indicators are calculated by the ratio between a value
indicator (e.g. GVA) and the physical amount of environmental aspects (e.g. energy
consumption - kWh).
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Table 3 - Example of eco-efficiency indicators
Eco-efficiency Indicators
Eco-efficiency ratios
GVA (€) / Environmental Influence from Raw material consumption (Pt)
EBITDA (€) / Environmental Influence from Energy consumption (Pt)
GVP (€) / Environmental Influence from Gas emissions (Pt)
Eco-efficiency Performance Indicators
GVA (€) / Raw material consumption (kg)
GVA (€) / Energy consumption (kWh)
GVA (€) / Greenhouse gas emissions (kg CO2 eq.)
GVA (€) / Emissions of acidifying substances (kg SO2 eq.)
The integration of eco-efficiency information into decision making and communication
process is a recommendation of WBCSD (Verfaillie & Bidwell, 2000). An eco-efficiency
performance profile is the combination of environmental indicators with business specific
indicators and meaningful eco-efficiency ratios. The profile structure proposed by WBCSD
was adopted in this methodology (Verfaillie & Bidwell, 2000), including:
Organization Profile – to provide a context for the eco-efficiency information:
employees, business segments, primary products, and major changes in the structure
of the company.
Value Profile – including financial information, the quantity of products, or functional
indicators for specific products.
Environmental Profile – including generally applicable environmental influence
indicators as well as business specific indicators relating to product/service creation
and use.
Eco-efficiency Ratios – including most relevant eco-efficiency indicators to evaluate
the objectives accomplishment within the eco-efficiency principles.
3.2.2 Efficiency assessment - MSM©
The MSM© methodology resembles a matrix (m × n), where "n" is the number of process
parameters evaluated (e.g. time, energy, water) and "m" the number of steps of the
production system (i.e. processing units – P1, P2 … PN). As presented in the figure below (Figure
8), MSM©’s analytic scheme comprises lines (process variables/ parameters) and columns
(processing units). In order to apply the MSM© approach, the following steps should be
carried out:
• Identification of the system boundaries;
• Identification of the processing unit(s);
• Identification of all relevant process variables and parameters;
• Definition of the associated KPI to each variable, always to be maximized and with
values ranging between [0-100%];
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• Analysis of the results and identification of the process parameters and processing
units with lower efficiency results;
• Study and prioritization the improvement actions;
• Implementation of improvement actions and assessment of the efficiency gains
evolution and cost reductions.
It is worth mentioning that it is necessary to identify the several processing units to consider
within the assessment. Alongside, all data has to be collected, i.e. data regarding processing
time, resource and energy consumption data throughout the various processing units and
measure non value-added (NVA) and value-added (VA) fractions. The operational
parameters (e.g. quality), also have to be collected.
All resource and energy data have to be presented according to the functional unit. The
operational variables have to be defined according to a time frame, since the production
planning is defined for a specific time frame. The quality parameter is based on the actual
production planning values, and it is calculated by the difference between the actual total
production and the rejected production. The resource, energy and operational parameters
have to be defined by the head of production and personnel in charge system under
analysis, in order to consider the most important parameter.
Figure 8 - Schematic representation of the MSM© methodology
In terms of efficiency assessment, according to MSM© principles, the following calculations
are necessary:
• For each process parameters in each processing unit, the fraction that adds value,
and the fraction that does not add value must be clearly quantified. With these
values it is possible to compute the Unitary Efficiency Ratio (UEF).
• The Process Parameter Efficiency (PPE), of a specific parameter, is calculated by
the ratio between the total added value and the overall total that is placed in the
system.
• The Processing Unit Efficiency (PUE) is determined by average value of all
efficiency values within the processing unit.
74% 70% 60% 𝑥%
(…)
n n n n
Time
Energy
Cost
Variable N (…) (…) (…) (…)
𝑥%
72% 89% 60% 𝑥%
80% 70% 30%
P2 P3 PN
70% 50% 90% 𝑥%
P1
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• After quantifying the efficiency of all processing units, it is possible to determine the
System Total Efficiency (STE), for resource and operation aspects. This indicator, STE,
is determined by the average value of all PUE values.
• Finally, the Overall Production System Performance (OPSP) for each processing unit
is determined by the product between the resource and the operational
processing unit efficiency.
• Consequently, the average value OPSP determines the Global Production System
Performance (GPSP).
In the figure below it is possible to identify all relevant indicators within the MSM© analysis.
Figure 9 - Efficiency calculations through MSM©.
Process Efficiency 100 - 90% Process Efficiency 69 - 40%
Process Efficiency 89 - 70% Process Efficiency <40%
INFORMATIVE VARIABLES
59% 23% 51%
42% 41%42%
Bottleneck 100% 41% 50% 31%
OEE 42% 42% 36% 42%
56% 71%
Overall Operation efficiency
(%) 82% 82% 79% 77% 86% 77% 80%
Overall resource efficiency (%) 71% 84% 85% 60% 70%
Overall production system
Performance (%)59% 69% 67% 46%
Processing unitFeeding table Calibrating Sanding Cutting
43% 57%
Packing
0,42 0,42 0,42 0,58 0,58 0,58
Stacking
60%
Overall Production System Performance (OPSP)
Global Production System Performance (GPSP)
Process Efficiency 100 - 90% Process Efficiency 69 - 40%
Process Efficiency 89 - 70% Process Efficiency <40%
- 100%
93%- 100% 80% - - -
- 100% 100% - -
- 100% 100% - -
- - 95% - 95%
18% 62%
Sandpaper utilization (m2)
Linear meters sanded per
sandpaper (m)
Appropriate referral of waste
(kg)
Diesel (l)
Electrical energy (kWh) 65% 71% 76% 75% 70%
100% 100%
95%-
56% 71%
Time (h) 78% 50% 67% 9% 70% 12% 36%
Resource overall efficiency 71% 84% 85% 60% 70%
Packing
0,42 0,42 0,42 0,58 0,58 0,58
StackingProcessing unit
Feeding table Calibrating Sanding Cutting
Unitary Efficiency Ratio (UEF)
Process parameters
Processing unit
Process Parameter Efficiency (PPE)
System Total Efficiency (STE)
Processing Unit Efficiency (PUE)
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The MSM© can easily assess resource and operational efficiency. Therefore, the process
parameters or variables regarding resource efficiency can be directly defined in terms of:
• Energy
• Materials
• Water
• Consumables
• waste generated
• Emissions etc.
On the other hand, operational parameters can be defined as:
• Machine speed losses
• Machine availability
• Process temperature
• Product dimensions
• Quality, etc.
Regarding the process cost analysis that the MSM© approach enables, this analysis focuses
on the assessment of inefficiency costs.
Figure 10 - MSM© Data flow and results.
It is worth mentioning that the resource variables are mostly deterministic variables (i.e. non-
randomly behaved), but the operational variables can be a non-deterministic variable (i.e.
randomly behaved, e.g. temperature). In order to quantify the value and non-value added
aspects of a non-deterministic variable, a buffer (or specified tolerance) should be defined.
The values that are within the buffer are accounted to “add value", the ones that are not are
“non-value adding”. The efficiency of a non-deterministic value is calculated by the ratio of
the number of times the values are within the buffer and the total number of times the value
of the variable was collected (i.e. total number of measurement events).
®
Efficiency Fingerprint
Summary analysis
Other variables
OEE
bottlenecks
ResultsInputs
Inventory
Value added and non value added
Customized
ContinuousImprovement
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Figure 11 - Value added (VA) and non-value added (NVA) for deterministic variable.
Figure 12 – Value added (VA) and non-value added (NVA) for non-deterministic variable.
Regarding the energy consumption, and according to MSM© approach, the Value added is
the amount of energy that is equal or below the reference value (value measured to define
optimal energy consumption); the non-value added energy is the amount of energy that is
above the reference value (Figure 13).
Figure 13 - Value added and non-value added for energy.
The Key Performance Indicators – KPIs (MSM© variables) is data that is treated and when
compared over time provide objective evidence of change. Therefore, KPIs assist managers
in strategic decisions, defining the objectives and results and guide and monitor the teams
for sustainable results. In the application of MSM©, performance indicators are defined in a
structure Pyramid - functional or hierarchical perspective (Figure 14) that sets the
presentation of KPIs at different levels
The levels shown in Figure 14 correspond to the following type of information:
Raw Data: data provided by the system relating to equipment or analysis in the
study;
Maximum Reference
Minimum Reference
Maximum Reference
NVAVA
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KPIs0 (Operational Level): At this level, the performance indicators are designed to
represent parameters mainly operational level and corresponding to a short period
of time. Reserved preferably for employees;
KPIs1 (Tactical Level): These indicators, intended primarily for management buffer,
corresponding to an average period of time and help to give an indication of the
system performance or equipment;
KPIs2 (Strategic Level): These KPIs are typically long-term aim direction or
management of the organization and seek to reflect the performance of
company, department, system, etc.
KPIs can be further classified into:
• KPIs Operation: correspond to indicators that reflect the efficiency at equipment
and system levels;
• KPIs Flow: represent the efficiency dates between deliveries, stocks, checks, etc;
• KPIs resources: reflect the efficiency between the input and output of raw
materials
Figure 14 – Functional and hierarchical perspectives.
Figure 15, is a schematic representation of the integration of the two approaches for defining
the KPI focused on Continuous Improvement as means to improve overall efficiency.
Figure 15 - Vision of KPIs as continuous Improvement enablers for enhanced efficiency.
“Hierarchical" Perspective"Functional“ Perspective
RAW DATA
0 – Operational KPIs
1 – Tactical KPIs
2 – Strategic KPIs
Board/top management
Middle management
workers
0 – Machine/Equipment
1 - Section
2 – Line/Product
3 – Department
4 – Company
5 – Group
0 – Machine/Equipment
1 - Section
2 – Line/Product
3 – Department
4 – Company
5 – Group
RAW DATA
0 – Operational KPIs
1 – Tactical KPIs
2 – Strategic KPIs
Board/top management
Middle management
workers
INPUT
System under study KPIs
Operation
Resources
Flow
MSM
OUTPUT
Continuous Improvement
Continuous Improvement
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In terms of the outcomes, these results allow the assessment of the OPSP and the PPE for
resources and operational aspects. The combined use of multiple value streams enables to
see beyond the overall performance of a production system in a simple manner, and
enables the identification and quantification of the inefficiencies of the different processing
units. The outcomes of the MSM© methodology are presented by original “MSM© scorecards”
depicted of individual or composed dashboards (see examples in Figure 16, Figure 17 and
Figure 18).
Figure 16 - Example of resource efficiency MSM© dashboard.
Figure 17 - Example of operational production efficiency dashboard.
Figure 18 – Example of summary analysis dashboard.
Process Efficiency 100 - 90% Process Efficiency 69 - 40%
Process Efficiency 89 - 70% Process Efficiency <40%
Processing unitFeeding table Calibrating Sanding Cutting Packing
0,42 0,42 0,42 0,58 0,58 0,58
Stacking
56% 71%
Time (h) 78% 50% 67% 9% 70% 12% 36%
Resource overall efficiency 71% 84% 85% 60% 70%
18% 62%
Sandpaper utilization (m2)
Linear meters sanded per
sandpaper (m)
Appropriate referral of waste
(kg)
Diesel (l)
Electrical energy (kWh) 65% 71% 76% 75% 70%
100% 100%
95%- - - 95% - 95%
- 100% 100% - -
- 100%
93%- 100% 80% - - -
- 100% 100% - -
Process Efficiency 100 - 90% Process Efficiency 69 - 40%
Process Efficiency 89 - 70% Process Efficiency <40%
Processing unitFeeding table Calibrating Sanding Cutting Packing
0,42 0,42 0,42 0,58 0,58 0,58
Stacking
77% 80%
Availability (min) 62% 62% 62% 62% 62% 62% 62%
Operation overall efficiency 82% 82% 79% 77% 86%
100% 98%Quality (units)
67% 67% 67% 67% 67% 67% 67%Speed Loss (min)
100% 100% 86% 100% 100%
- 100%
Thickness (mm)
Width (mm)
Length (mm) - - - - 100%
- 99%
100%- - - - 100% -
99% 98% 99% - -
Process Efficiency 100 - 90% Process Efficiency 69 - 40%
Process Efficiency 89 - 70% Process Efficiency <40%
43% 57%
Packing
0,42 0,42 0,42 0,58 0,58 0,58
Stacking
60%
Processing unitFeeding table Calibrating Sanding Cutting
70%
Overall production system
Performance (%)59% 69% 67% 46%
42%
56% 71%
Overall Operation efficiency
(%) 82% 82% 79% 77% 86% 77% 80%
Overall resource efficiency (%) 71% 84% 85% 60%
INFORMATIVE VARIABLES
59% 23% 51%
42% 41%42%
Bottleneck 100% 41% 50% 31%
OEE 42% 42% 36%
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The results of the MSM© approach should be determined preferably by the arithmetic
average, as mentioned above. The costs related to the processing unit and process
parameters can also result from the MSM© approach. The results enable a simple cost
analysis which address the value and non-value added costs, namely for resource variables
(Figure 19). Such results may support the decision making process in terms of payback
analysis for improvement actions. For instance, if an investment is made in order to improve
efficiency, i.e. focused in reducing missuses and non-value adding actions, the MSM© cost
analysis may support increased decision information regarding the payback value, as well as,
the economic growth, since non-value added costs will be eliminated/reduced.
Figure 19 - Example of MSM© cost analysis.
In summary, to deploy the MSM©, it is necessary to survey of all the variables that need to be
controlled within the system and then elaborate the proper performance indicators.
Following this task an exhaustive treatment of the data and values takes place in order to
calculated efficiency. Finally, the critical points are identified, i.e. inefficiencies.
Consequently, improvement opportunities are identified in order to reduce inefficiency.
3.3 The purpose to integrate ecoPROSYS© and MSM©
In terms of the integration between ecoPROSYS© and MSM©, the first analysis towards
connecting both methods is presented in Figure 20. The main domains of each method are
different (economical, environmental vs. value added and non-value added) and
complementary.
Added value costs vs. non added value costs
Labour
(k€)
Energy costs
(k€)
Water costs
(k€)
Diesel costs
(k€)
Packaging costs
(k€)
Non-value addedValue added
Co
sts
(E
uro
s)
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Figure 20 - Generic approach overview of the integration of ecoPROSYS© and MSM©.
As mentioned in the previous sections, the ecoPROSYS© deals with the economic and
environmental dimension, considering the entire life-cycle. The ecoPROSYS© is system
oriented, i.e. identification of critical aspects and their causes. On the other hand, MSM© is
more oriented to the operational analysis, in order to identify and quantify value added and
waste along a production system, hence the operations and resource in deep analysis
approach.
In the following figure (Figure 21), the role and outcomes of each method are described.
MSM©’ can be straightforward parametrized to act on real time - in line monitoring and
analysis, while ecoPROSYS© is more oriented towards “offline approach” and analysis with
lower monitoring and analysis frequency level.
The positioning of each method, according to the areas of activity, helps to identify their
common areas, and enables the integration of these methods. ecoPROSYS© and MSM© shall
be integrated in a manner that they will complement themselves and arise as a unique
efficiency framework to characterize the efficiency performance of a production unit or
system. The efficiency framework should identify, quantify and assess the resource efficiency
taking into account, not only the eco-efficiency dimensions, but also the “effective”
efficiency of resources consumed.
As depicted in Figure 21, the MSM© method is oriented to efficiency assessments, Lean
Thinking Principles, namely added value, simulation scenarios creation and decision support.
The ecoPROSYS© is mainly oriented for eco-efficiency assessments, providing a life-cycle
perspective to the production system and allowing simulation and decision support. Yet the
ecoPROSYS© can cover common ground with MSM©, namely in the aspects of “added
value” and “efficiency”, along with the simulation aspects. These common aspects are
taken as the root for integrating ecoPROSYS© and MSM©.
The main goal of the communication tools is to identify information metrics within the
efficiency and eco-efficiency areas of activity, as well as support internal and external
Efficiency Framework
Eco-efficiency
Value/CostEnvironmental
Impacts
Economical dimension
Environmental dimension
Process Efficiency
Value addedNon-value
added
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communications. Additionally, the information metrics – Performance Indicators (PI) and KPIs,
also have an important role for integrating ecoPROSYS© and MSM©, since this performance
information will act like a bridge between the two methods.
Figure 21 - Role and outcomes of the MSM© & ecoPROSYS© approach.
Within the efficiency framework, concerning the sharing and exchange of information
between ecoPROSYS© and MSM©, as well as information for the communication and
decision support, three types of performance information are considered, namely:
Key Result Indicators (KRIs) – indicates the overall condition, i.e. results of how the
systems has performed in terms of results (e.g. costs, profits, ROI, sales, etc.)
Performance Indicators (PIs) – indicates what to do, based on process performance
(e.g. rate of rejected parts, machine downtime etc.)
Key Performance Indicators (KPIs) – indicate what to do to increase performance
dramatically. The KPIs measure performance and communicate "warnings", therefore
enabling process control.
In this context a KPI comprises a set of PIs (Figure 22). A PI will only become a KPI if the system
is revaluated and if the PI is of great importance for process control.
Figure 22 - Structure of a KPI.
MSM
RoleMethod
Operating (in-line): in real time, on the shop-floor
Outcomes
Lean approach (Value added & non-value
added); visual management, KPI
ecoPROSYS
Systemic (offline): overview of the system, identification of critical
aspects and their causes (technological and
operational from the previous one)
Simulate scenarios and evaluate /
simulate optimization
scenarios support decision making process (what to
improve)
Communication tools
Fitted with a set of information and metrics (accurate information) to
bee accessed anytime
Communication to the outside due to legal or commercial purposes.
Intra-company or corporate
Areas of Activity
Life
cyc
le
ap
pro
ac
h
Ec
o-e
ffic
ien
cy
Eff
icie
nc
y
Lea
n
Ad
de
d v
alu
e
Sim
ula
tio
n a
nd
de
cis
ion
su
pp
ort
PIs PIs PIs PIs
KPI
i
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Figure 23 illustrates the breakdown approach of process performance indicators for
ecoPROSYS© and MSM©. As depicted below, the performance indicators for ecoPROSYS©
and MSM© can arise from the same PIs that characterize process overall conditions.
Figure 23 – Example of ecoPROSYS© and MSM© performance indicators.
The outline of the integration of the two methods, ecoPROSYS© and MSM©, is presented in
Figure 24. One important remark for this integration, concerns the exchange of information
between efficiency and eco-efficiency assessments. In particular, the efficiency assessment
based on the eco-efficiency principles and efficiency performance (MSM© ecoPROSYS©);
and simulations for eco-efficiency improvement along with eco-efficiency performance
(ecoPROSYS© MSM©).
Such exchange and integration of information, is the main focus of the integration of the two
methods. Moreover, this integration, will enable the efficiency framework to support the
decision making process, either in real time either through simulation of scenario, considering
efficiency, environmental and economic performance as whole and not as isolated
domains, hence an overall efficiency assessment.
Additionally, the efficiency framework will make use of information of the efficiency and eco-
efficiency assessment (environmental and economic performance) in order to identify the
best scenarios (optimization), in terms of process efficiency and eco-efficiency, by
considering and evaluating the trade-offs between both performance assessment methods,
i.e. assess if the same process efficiency has the same eco-efficiency performance, or vice-
versa. In addition, and acting as a as a strong link for the integration, all non-value adding
action will be assessed in terms of costs and environmental impacts. Such analysis will enable
prioritization of improvement actions, and a clear vision of the best steps towards enhanced
efficiency, environmental and economic performance.
PI sends alerts when:• Low efficiency (according to a benchmark value)• …
PI (ecoPROSYS)
PIsoverall condition of the process/ process characterization
PI sends alerts when:• Exceeds the threshold value (alarmist limit)• The system has an abnormal behaviour (unusual variability)• …
PI (MSM)
Benchmark indicator!Alert!
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Figure 24 - Overview of the integration of MSM© and ecoPROSYS©
One important final remark, concerning the efficiency framework, is related with its ability to
assess eco-efficiency and efficiency in such a manner that one can trace and allocate the
major influence in terms of eco-efficiency, efficiency, costs or environmental impacts to
each unit process or even to a specific material, resource or energy type. Additionally, it is
important to state that the overall efficiency framework, based on the integration of
ecoPROSYS© and MSM©, will still enable isolated assessments for efficiency performance
(MSM©) and eco-efficiency performance (ecoPROSYS©). Moreover, the life cycle
perspective from ecoPROSYS© will be extended into the efficiency assessment (MSM©).
Besides this being another integration point, between the two methods, this will provide a
better understand on the impacts of efficiency improvements (both from environmental,
including energy and resource efficiency, and economic point of view).
In conclusion ecoPROSYS© and MSM© will be integrated within the Efficiency and
Environmental Influence domains; and will be integrated within the Efficiency and Economy
domains.
3.4 Consequences and critical factors for the efficiency framework
The efficiency and eco-efficiency are a critical and central topic for the efficiency
framework. Moreover, these are important enablers for addressing resource and energy
efficiency, which consequently leads to economic and environmental competitiveness and
subsequently overall sustainability.
Support in the identification/definition of PIs and KPIs [assess overall efficiency of the system]• High frequency monitoring/Daily use [fluctuation of efficiency values]• Operational and Control approach using: real time, in-line, on the shop-floor Data; lean principles; visual management.• Parameterization of Efficiency assessment taking into Lean and efficiency principles• Support "on the spot“ informed decision making process• Identification and quantification of value added and non-value added - efficiency
MSM
Eco-efficiency performance evaluation and identification of significant environmental aspects and significant results i.e. PIs, KRIs and KEPIs• Systemic off-line analysis to assess environmental and economic performance• Low frequency monitoring• Consider the eco-efficiency principles for eco-efficiency performance assessment• SIMULATION OF SCENARIOS to support decisions regarding improvements• Communication is fitted with a set of information and metrics that enable communication of accurate information, at anytime• Life-cycle Approaches
ecoPROSYS
Efficiency Framework
• Evaluate overall efficiency• Increase efficiency based on eco-efficiency principles• Support decision considering efficiency, environmental and economic performance
• Identify the best scenarios by considering and evaluation the trade-offs between efficiency and eco-efficiency performance• Assess effectiveness (via eco-effectiveness) of improvement actions• Support tactical management
Simulation of scenarios for eco-efficiency improvement Information of Eco-efficiency performanceInformation of Efficiency performance
Efficiency analysis based on eco-efficiency principles
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To characterize the efficiency performance of a production unit or system, applying
ecoPROSYS© and MSM©, arises as a structured, and enhanced approach to identify,
quantify and assess the resource efficiency taking into account, not only the eco-efficiency
dimensions, but also the “effective” efficiency of resources consumed.
Such combination, efficiency and eco-efficiency, enables the user to see the real and
overall gains regarding the sustainable use of resources. It is possible to assess, or even
simulate alternative scenarios, for instance, where changing the type of material has a
better environmental and economic impact, regardless of the resource efficiency (useful
and waste). Or if by increasing the resource consumption efficiency and economic
performance there are negative environmental impacts (e.g. changing technology or
materials) that until now have been discarded, ignored or even unseen.
One other relevant aspect, is that since eco-efficiency performance may be good, due to
high value (e.g. GVA, EBITDA), i.e. the economic value might cover-up environmental
burdens. Therefore, systems or production units may have high eco-efficiency performance
and low efficiency – resource efficiency or vice-versa. Hence, this justifies the need to
integrate efficiency and eco-efficiency assessments.
It is crucial that the integration of the efficiency and eco-efficiency should be adjustable in
order to assure its application to any process industry regardless the type of industry/sector
and size.
Moreover, the results from the Eco-efficiency and Efficiency integration can be used for four
distinct purposes within the proposed framework:
Eco-efficiency assessment;
Resource efficiency assessment;
Identification of major missuses/inefficiencies;
Support decisions regarding the most sustainable path - less environmental impacts,
less cost, and best use of low impact and cost material to meet requirements;
Provide a technical basis for simulation of alternative scenarios and evaluation of
goals;
Apart from the system overall efficiency, integrated efficiency and eco-efficiency results aim
to provide accurate information on the overall performance. This is particularly important for
the identification of the most significant inefficiencies and major environmental and
economic aspects that should be targeted during the development of improvement
measures.
One important final remark is that, the quality of the efficiency and eco-efficiency results is
highly related with the data quality. Such, deviations regarding data quality should be taken
into account when analysing the results, and the efficiency framework should foresee data
quality control aspects.
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3.5 Overview of the efficiency framework concept
With the development analysis for the articulation of eco-efficiency and overall efficiency,
namely with the methods ecoPROSYS© and MSM©, the conceptual efficiency framework of
MAESTRI is presented in Figure 25. It encompasses several modules, namely for assessing eco-
efficiency (environmental influence and economic performance), resource and energy
efficiency, and for simulating efficiency performance in order to optimize process efficiency,
thus fostering sustainable manufacturing. Additionally, the integration and connection with
ISO standards and international good practices are foreseen in the conceptual framework.
The data flow and its path is also outlined, in the concept presented below. Note that all the
data related with resource, energy efficiency and other process parameter are to be
considered.
Ultimately, it must be stressed, that the cost and environmental impact of non-value added
(NVA) is one of the strongest link between the two methods – enabling trade-off analysis
between both performance assessments and prioritize improvement actions, yet it is not the
only link, as described in section 3.3.
This conceptual integrated approach will be linked, in subsequent project activities, to the
concepts and practices of Management System and Industrial Symbiosis. This then foresees a
conceptual connection between of the efficiency framework and the management System
and Industrial Symbioses (WP 3 and 4 respectively).
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Figure 25 - Conceptual Efficiency Framework.
Standards
ecoPROSYS
Economical dimension
Environmental dimension
Value added Non-value added
Analytic data
Eco-efficiency Assessment
Efficiency Assessment
Simulation
Environmental impact assessment
LCC Structure & PBCM
Efficiency assessment
Improvement actions
Standards
Costs and Environmental Impacts of NVA
Improvement actions
Optimization
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Management systems and standards section in this document, foresees the identification of
methodologies which can contribute and enhance the efficiency framework, namely the
90001, TS 16949, 14001, 14031, 14040, 14045 and 50001 ISO Standards. Next sections aim to
describe these standards.
4.1 Overview of Standards
4.1.1 ISO 9001
4.1.1.1 What ISO 9001 and Lean Management System are?
ISO 9001:2015 Quality management systems – Requirements is an international standard
dedicated to quality management systems. An organization can be certified and registered
by an independent auditing body whether it has a quality management system compatible
with the requirements of this standard. The recent release of that norm was in 2015 and it
included a few changes in comparison with previous editions like: new structure (known as
High-Level Structure), increased focus on risk-based thinking, lack of requirement to have a
dedicated management assignee etc. Different extensions of that norm specific for various
industries exist, for example: ISO/TS 16949:2009 Quality management systems -- Particular
requirements for the application of ISO 9001:2008 for automotive production and relevant
service part organizations, Quality System Requirements QS-9000 or VDA 6.1. In this section of
the deliverable the focus will be on the fundamental standard for quality management
systems namely the ISO 9001 and how it compares to the Lean Management System.
Lean Management System represents all the practices and tools used to monitor, measure,
and sustain the operation of Lean production operations. It helps to identify where actual
performance fails to meet expected performance and to assign and follow up on
improvement activities. Lean Management System contains four basic components:
standard work for leaders (example in Figure 26), visual controls, daily accountability process
and leadership discipline (Mann, 2010). The Lean Management System has been described
in more detail in Deliverable 1.2 – Technology Watch Report.
4 Management System and standards
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Figure 26 - Example of a standardized work plan for supervisors.
Quality management systems as described in ISO 9001 and Lean Management Systems are
both management systems popular around the globe. When defining how a management
system with integrated consideration of ecological aspects should look like, one should
assess the available management systems in order to build on the best practices.
The following sections related to ISO 9001 standard presents a critical review of this standard
from the Lean Management System perspective. It will aim at identifying:
advantages of ISO 9001 that the Management System elaborated within MAESTRI
should build on,
shortcomings of ISO 9001 that should be avoided when designing, implementing,
using and maintaining a management system,
ways to improve the ISO 9001 standard.
4.1.1.2 Advantages of ISO 9001
The main advantage of ISO 9001 is the fact that it is a standard recognizable worldwide.
Therefore it may serve as a proof that a supplier is able to meet customers’ requirements
related especially to quality. However this advantage is strongly related to the fact that ISO
9001 enables certification. This causes misunderstanding and problems with implementing
the quality management system that would improve the management practices in the
company.
The requirements described in ISO 9001 are developed around organization’s one main goal:
around improving customer satisfaction. And this focus can be seen throughout the
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document. A company applying for an ISO 9001 certificate has to prove that it focuses on
meeting its customers’ requirements. This is definitely a strong point of ISO 9001 and a one to
consider when defining a management system.
Another worth noticing aspect is that ISO 9001 promotes the process approach based on the
Plan-Do-Check-Act cycle when developing, implementing and improving the quality
management system. It means determining the processes needed for the quality
management system, their inputs, outputs, sequence, interactions between processes etc.
All this helps to prevent the sub optimization of processes and helps to concentrate on
improving the whole organization.
Even though in ISO 9001 one will not find a concrete recipe on how to develop a quality
management system it is common to find different organizations using similar templates and
tools (for example process map, SIPOC) that enable them to meet the international standard
requirements. It is good that companies can benefit from the experience of others even if
these best practices are not directly derived from ISO 9001.
4.1.1.3 Downsides of ISO 9001
Having in mind the advantages mentioned above this international standard has been
critically reviewed in order to identify any downsides it may have. These downsides identified
can serve as guidelines not only on what to avoid when designing a management system
but also on what to improve in next ISO 9001 releases. Implementing them is both feasible
because of the new ISO 9001 versions being released every few years and could bring a very
large impact because ISO 9001 is very popular with over 1,1 million certificates issued in 2014
around the world (ISO, 2015a).
ISO and Continuous Improvement
When talking about any management system it has to be noticed that in order to give
positive effects the system needs to serve as a way of working for company management.
This means that the management has to know the system, understand it and use it on a day-
to-day basis which is not easy. In our industrial practice we notice a trend that the
management would like to designate the implementation of a management system on a
proxy and not get too much involved. The ISO 9001 standard itself does not provide any
clear guidelines on how to engage management to build the system and make them use it
and maintain it (with the support of a coordinator for example). Only when understood
correctly and used on a day-by-day basis by all the levels of the organization (including the
top management) does the management system enable long-term development of a
company based on PDCA cycle. The base for that is a good justification for implementing a
quality management system based on ISO 9001 requirements. There are several reasons for
implementing that standard and applying for the certificate, the most popular seem to be:
willingness to enter new markets (for example the Russian market for agricultural
machines),
meeting customer requirements,
other marketing purposes.
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When a company implements a management standard and is not using it then it creates
significant consequences for the potential future development of the organization. This
creates a feeling in the employees that a system is a formal thing that impedes everyday
work. In such a case, trying to implement any kind of management system is much more
difficult than in the area where no implementation failures occurred in the past. Even if
employees have a poor experience for instance with a quality management system they
approach any other management system with a similar attitude4. The ISO 9001 standard
does not provide concrete guidelines on how to deal with these risks and how to avoid them.
The model in which a company demands a certain system solution or tool has significant
negative consequences. It places the emphasis on receiving the certificate, a confirmation
from a 3rd party or from the customer that the supplier has obtained a system, other than the
continuous improvement of the supplier that the customer will benefit from. It starts to
happen more and more often that customers demand from their suppliers a certain level of
Lean Management maturity 5 . The same but on a much wider scale is with ISO 9001
implementation. When a customer demands from his supplier he acts from the position of a
stronger entity and he does not help him. This may ruin the suppliers who pretend they use for
example Lean Management but when one looks deeper will notice that they don’t. If one is
willing to have a network of stable suppliers (which is helpful if one wants a long-term
development of the company) he cannot only demand, demand and demand – he also
has to cooperate basing on a relation with the supplier (Liker & Choi, 2004).
ISO and Audits
Another shortcoming of ISO 9001 is related to audits. When talking about the standard two
types of audit are important: internal audits and external audits conducted in the
certification process. The goal for conducting internal audits, as described in the ISO 9001 is
to provide information on whether the quality management system meets the company’s
own and ISO requirements for a quality management system and whether that system is
implemented and maintained effectively. So the internal audits may enhance the attitude of
employees oriented just towards meeting the requirements in order to pass the audit. In this
case these employees may end up having more work because they operate as usual and
before the internal audit they do tasks to make sure they meet the requirements and pass
the audit. The ISO 9001 audits (internal and external) are based mainly on records and
interviews. They check whether the records are done according to the requirements of the
norm or of the organization. And often these records and interviews do not represent the
reality of the organization and problems it encounters. So in the end the audit does provide
a far from real state of the company management system. Third issue related with internal
audits is the person who is doing the audits. In the current version of the standard it is required
that the organization selects auditors so that the objectivity of the audit is ensured. But it is
not suggested who should be that person. However it is a very important issue. The position of
this person in the organization will reflect in the results of the audit. For example if a person
from procurement department would be selected to audit the process of machine
changeover it may happen that this person will not notice the majority of important details
4 LEI Polska internal research 5 LEI Polska internal research
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and will not provide any insights that may help to improve the audited process. On the other
hand if an organization would select an operator from another machine to be the internal
auditor of the changeover process he may provide great improvement ideas but he will not
be responsible for making sure that these ideas will be implemented. Concluding, the
internal audit model of ISO 9001 supports making sure that the organization adheres in its
reports and documentation with the requirements (of the ISO standard or internal company
requirements) but it does not necessarily support continuous improvement of the
organization. Similarly with the external audits. Often they serve as means to show that a
company meets certain predefined requirement, but they don’t support continuous
improvement.
ISO and Process approach
In ISO 9001 the need for applying the process approach (along with Plan-Do-Check-Act) by
organizations is stressed several times. It is true that the process approach enables the
company to plan the processes and the interactions between the processes. However the
ISO 9001 puts a focus on making sure that the process provides expected outputs (by
requiring that the top management assigns responsibility and authority for that role). It is in
contradiction with the rule that the results are a consequence of following good processes
(Koch et al., 2012). Therefore it is important to focus not on meeting the goals and achieving
the results but on eliminating root causes and improving the processes (Lean Enterprise
Institute, 2008).
ISO and Documented information
The ISO 9001 requires documented information on various quality management system
elements. However there are no guidelines on what form this documentation should have,
how should it look like, what critical elements it should consist of. One might argue that it’s a
matter of company, its culture and internal standards etc. However it has been noticed that
the way the procedures, standards, instructions look like determines whether people look
inside them when there is a need and whether they update them or not (because it is
unfriendly and takes a lot of time). In general people have a need to look into an
instruction/standard/procedure when:
the need to remind themselves the process because they do it very rarely (it’s not their
main duty),
they are not sure how to proceed because the process is new to them and they are
learning it,
Additionally the standards are useful for the team leaders, supervisors, etc. to check whether
the process is conducted according to the standard or whether there are some
discrepancies. So by having a poor procedure that has dozens of pages, which nobody is
willing to read, the organization does not support using the procedures when they are
needed. Creating a good procedure (one that employees would be willing to use and
update when needed) requires a concrete method that is based on human sciences like
psychology, andragogy etc. This knowledge is lacking in the ISO 9001 and could be
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beneficial for the organizations implementing a quality management system according to
that norm.
Another flaw of ISO 9001 standard is that it gives just a little recommendation on the level of
detail that the documented information should have. According to the standard the
documented information should be created and updated to the extent that it is necessary
for the organization. This does not help in deciding what should be documented and what
does need to be described in more detail and what does not have to be.
It is also stated that the extent of documented information can depend on competence of
employees. This is an unclear statement that can be understood twofold. The standard does
not clarify whether if an organization has more competent employees (with competences
relevant for their roles in the organization) it requires more or less extensive documentation.
Whether the more competent people are able to create more documented information for
the quality management system and therefore the organization will be expected to have a
more extensive documentation or whether an organization with less competent employees
requires more documentation so that this documented information supports those less
competent workers.
Another shortcoming of ISO 9001 is that in order to have confidence that the processes are
carried out according to the plan it only suggests to keep the documented information
about these processes. This seems not to be sufficient. In order to be sure that the processes
are carried out as planned one (especially a supervisor) cannot rely on reports and other
form of documentation. Supervisors need to visit the place where the processes are carried
out. In case of lack of adherence to the plan it helps them understand the problems and
make better informed decisions. ISO 9001 puts great emphasis on documented information
and does not mention the importance of being in the place where the work is being done
and directly observing the process, empathically asking employees questions, building a
relation with them etc.
Implementing ISO 9001
Another shortcoming of ISO 9001 seems to be the issue of implementing the quality
management system. From the standard one cannot read any clear guidelines on what
should the stages of implementing the management system be, should the system be
implemented in whole or in some smaller parts etc. This general-purpose character of the
standard is beneficial because it can be applied to extremely different organizations but it is
also a flaw because a lack of certain guidelines gives a danger of misinterpretation and
makes the implementation and in consequence the usage of the system more difficult and
subject to misunderstandings.
Last but not least in the whole ISO 9001 standard it is only generally stated why it is important
to implement the standard. However nowhere can be found how to implement certain parts
of quality management system, what options are available. Neither the standard does not
tell why one should do things in a certain way and not in another. Describing these details
would help people to better understand the rationale behind each of the requirements of
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the ISO 9001 and support the use of the standard in a more conscious way by more people
in an organization.
4.1.1.4 Recommendations for ISO 9001
Basing on the analysis of ISO 9001 a possibility to enhance that standard has been noticed.
Recommendations cover modifications of the standard and not the business model built
around it. They may not be a way to eliminate all the shortcomings but they may help to
improve the standard. They are categorized similarly to the shortcomings identified.
ISO and Continuous Improvement
(David Mann, 2010) points out that Lean culture gives 80% of benefits of continuous
improvement and Lean tools only 20%. He perceives Lean culture as management system
which is set of management routines (leaders’ standard work), standardized daily
improvement procedures and visual boards. It is hard to argue with these phenomena.
Continuous improvement is about changing the way managers and team members behave
and interact in the company. Do they analyse how to achieve business goals using A3
approach (Shook, 2008) or improvement Kata (Rother, 2009) or they just claim that
something is impossible. It is not enough to tell people about Total Quality Management (the
concept ISO 9001 is based on) or Lean Management and show them tools. The question is if
they would use these tools on regular basis, will the improvement behaviour become daily
habit? The way to do it is to implement management routines which in turn will become
habits. These routines have to be practiced every day. The same about improvement tools
and methods6. It is not enough to teach people Lean tools and methods. It is important to
create routines of using them on regular basis (Figure 27) as well as a coaching scheme to
ensure that they use the tools and methods in the proper way. These are two important
elements of building improvement culture, which are missing in ISO 9000 norms and other
kind of norms built on similar construction (e.g. ISO 14000):
The norms do not require to implement daily management and improvement routines.
The norms do not require a process to ensure that managers and team members use
improvement methods properly.
6 Not IT tools, the methods and tools as a way of proceeding analysing problems and designing improvements.
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Figure 27 - Example of manager's routine (part of standard work for leaders).
This issue has been analysed by many companies willing to implement Lean Management in
a way to achieve long lasting benefits. They created several methods to implement and
sustain a management system focused on continuous improvement:
Management system daily audits (Figure 28),
Standardised Work daily audits,
Lean assessments (Figure 29).
Category 1: Leader Standard Work
Level 2: Beginning Implementation
Less Yes Exceeds Exists for few isolated positions
Less Yes Exceeds Carried and filled out/followed irregularly
Less Yes Exceeds Original version, no revisions
Less Yes Exceeds Largely seen as a check the box exercise
Notes: Team leaders in assembly have it (revised once). Many carries it, checks it, checks
off items, writes notes. Gary has it, does not carry or make notes. Supervisors do not have it
yet, but showed me drafts. Figure 28 - Example of an assessment observation and rating form (Mann, 2010).
Deliverable 2.1
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Figure 29 - An example of Lean Assessment results presented on a radar chart.
ISO and Audits
The biggest difference between Lean audits (as well as assessments) and ISO audits is that
Lean audits are based on observation of what is really happening in the company not on
records or interviews (like ISO audits). For example to assess if people are analysing problems
properly the auditor needs to observe people working on problem solving. ISO auditor mainly
checks whether the relevant documented information is in place. Lean audit is focused on
understanding if people do all the elements of problem solving in proper way. ISO audits are
focused on checking if people do a problem solving and record it according to the norm.
Also Lean audits are performed every day by managers (not auditors). In this way managers
become responsible for sustaining the Lean way of working. They also can respond quickly to
problems. Managers should also be audited by their supervisors. In Lean Management
System it has a form of a formal, cascaded process of everyday supervision (of the
management system) and development (of direct subordinates) as depicted in Figure 30.
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Figure 30 - Management system audit.
Considering that currently some suppliers implement ISO 9001 only because their customers
demand the certificate and the quality management system based on that standard
doesn’t become a one the suppliers would really use daily. Therefore adding to ISO 9001
new release a guideline dedicated for the customers should be considered. It could state
that the customer should first try to cooperate based on a positive relationship with the
supplier when implementing a quality management system at that supplier, rather than
demanding such a system without offering support. This is very important as it may imply the
way organizations collaborate. Adhering to that guideline would increase the number of
quality management system implementations where the whole management gets involved
and that bring benefits to the supplier (as well as to their cooperating customer).
ISO and Process approach
It is a good thing that the ISO 9001 puts emphasis on the process approach. However the
international standard should shift its focus from assuring that the process provides expected
outputs. ISO 9001 through the quality management system should direct the managers’
attention to assuring that the process is conducted as planned (according to standardized
work, within machine parameters etc.), the root causes of problems are identified and
eliminated and the process is improved. All this would support the rule that the results are a
consequence of following good processes.
ISO and Documented information
ISO 9001 requires documented information for various processes. However it should also
provide more direct guidelines on which processes to document first. It seems clear that not
all processes within an organization should be documented. The processes that should be
described first are the ones that are the most crucial from the business point of view. And this
should be emphasized as some organizations, especially those just willing to obtain the ISO
certificate may select a few process that are easy to be documented and that can serve as
a kind of showroom to an external auditor.
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Additionally the procedures, instructions, standards elaborated to meet the requirements of
ISO 9001 can have various forms. And it is a big potential for improvement in many
companies – the way the knowledge is documented (and therefore also maintained, shared
and used when needed)7. ISO 9001 should provide guidelines on how the instructions or
standardized work sheets should look like, what elements should they consist of etc. basing
on human sciences like psychology or andragogy. An example of a method that describes
how an instruction should look like is the Training Within Industry Job Instruction method
(Graupp & Wrona, 2006).
Another recommendation for ISO 9001 is related to how confidence that the processes are
carried out as planned is gained. Current version of this international standard suggests to
keep the documented information about these processes. However it is not said anywhere in
the standard that the best place to observe whether processes run as planned is the place
where these processes are being done. And in order to identify any deviations from plan and
understand the process one should go there.
Implementing ISO 9001
ISO 9001 is a standard that requires the implementation of its all requirements in order to get
certified. However some people may better understand and be more willing to implement
certain parts of the standard and other people the other ones. It is then a matter of
justification each of ISO 9001 requirements so that people are aware that it is important and
are encouraged to implement them. Therefore the ISO 9001 could have an adjusted form
providing information not only about WHAT to implement but also HOW to do it (in order to
do it efficiently, right the first time, what are the best practices, how to avoid common
mistakes etc.) and WHY it is important to meet a certain requirement (reasons explaining why
each of the HOW’s is important). This would help more people understand the requirements
of ISO 9001 and use this standard in a more conscious way.
4.1.1.5 Conclusions
ISO 9001 standard has many good practices that should be promoted and considered when
developing a management system with integrated consideration of ecological aspects like
for example promoting the process approach within the management system, basing the
system on Plan-Do-Check-Act cycle or supporting the organization’s focus on customer
satisfaction. However it also has some serious shortcomings that should be avoided. Some of
them have been considered in several industry and country specific standards like Formel Q-
Konkret, VDA 6.1 or ISO/TS 16949. The latter one, as the most popular automotive standard is
described in more detail in the next section.
Many of ISO 9001 downsides could be avoided. However main problems arise from the
business model behind ISO 9001 standard and from the certification process. And this strong
demand for certificates in order to meet supplier or market requirements seems to be the
main barrier preventing organizations from largely benefiting from the implementation of ISO
9001-based quality management system.
7 LEI Polska internal research
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4.1.2 ISO TS 16949
The ISO/TS 16949:2009 Quality management systems – particular requirements for the
application of ISO 9001:2008 for automotive production and relevant service part
organizations is an internationally recognizable technical specification. In its content it
emphasizes the importance of continual improvement, defect prevention and reduction of
variation and waste inside the supply chain.
It bases on the ISO 9001:2008 version so it has different requirements than the ISO 9001:2015
described in previous section. Nevertheless, the focus of this analysis is on the items that are
specific to ISO/TS 16949:2009 (and are not part of ISO 9001:2008). These items inside ISO/TS
16949:2009 document are outside the boxes (in contrast to the original text of ISO 9001:2008
which is boxed).
4.1.2.1 Advantages of ISO/TS 16949
The main strong point of ISO/TS 16949:2009 is that it is more concrete than ISO 9001:2015. It is
dedicated to a specific sector (automotive manufacturers and their suppliers). Moreover, it
indicates or at least suggests concrete tools supporting quality assurance like Advance
Product Quality Plan (APQP), Statistical Process Control (SPC), Failure Mode and Effects
Analysis (FMEA), Production Part Approval Process (PPAP) or specific production
management approaches like lean manufacturing.
Worth noting is the fact that this standard is based directly on a more broadly used ISO 9001.
So companies who meet the requirements of ISO 9001 can only add on top of that the
requirements set by ISO/TS 16949 and they can apply for certification. This modular kind of
structure helps especially in a situation when a company has got ISO 9001:2008 certificate
and would like to extend its markets and enter the automotive market as a supplier. In such a
situation that company can add the requirements of ISO/TS 16949 to its existing quality
management system and does not have to change this system’s previous components.
ISO/TS 16949 like ISO 9001:2015 is also a standard recognizable worldwide although it is not as
popular: over 1,1 million ISO 9001 certificates versus 58 thousand ISO/TS 16949 certificates
have been issued in 2014 (ISO, 2015a). The latter one is a sector-specific standard so it has a
smaller group of potential users.
Another positive similarity between the two standards is their focus on customer satisfaction.
Additionally, ISO/TS 16949 emphasizes the importance of such aspects like defect prevention
and reduction of variation and waste. That is worth noting as these elements are not only
automotive-specific. All industries could benefit from defect prevention or variation
reduction.
4.1.2.2 Downsides of ISO/TS 16949
A company that meets the requirements of ISO/TS 16949 receives a certificate. A similar
model like in ISO 9001 applies. A company demands from its supplier having a certain quality
management system and the supplier implements that systems. He gets audited, receives
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the certificate and does not take advantage of the system. And this model has similar
negative consequences as in ISO 9001:
being forced to implement a system is the easiest way to make one not use that
system in between formal checks (audits),
it may give the supplier double work – they need to manage the old way and
maintain the unused quality management system to pass the audits,
an unused system may create a negative feeling amongst employees: that a system
is a formality that impedes everyday work – and later on when the organization will be
trying to implement any kind of management system it will be much more difficult
than in the area without such poor experiences,
4.1.2.3 Conclusions
ISO/TS 16949 is an international standard with several good practices. Especially its focus on
defect prevention and reduction of variability is worth noting. However as it bases on ISO
9001:2008 and has a similar business model behind it also has downsides. The main ones are
related to the fact of certification and are similar to ISO 9001:2015.
4.1.3 ISO 14001
ISO 14001:2015 is the internationally recognized standard that outlines how to develop an
effective Environmental Management System for business and organizations. This standard
helps organizations from all sectors and sizes to develop structured management frameworks
to better control their impacts on the environment, ensures compliance with the
environmental legislation and support continuous improvement (ISO, 2015b). ISO 14001 can
be viewed as a tool to increase profitability, once it helps to improve waste management,
optimizes the use of resources and, consequentially, costs.
The ISO 14001 Standard is based on the Plan-Do-Check-Act methodology (ISO, 2015b),
directly related with the concept of continuous improvement. However, as any other related
standard, it does not present any exact measures, so each business or organization must
define their own targets and performance measures.
The implementation of ISO 14001 in an organisation is based on five principles:
• Environmental Policy (Plan) – includes the review of the processes and products in
order to identify the elements and their impact on the environment. Future
operations must be also assessed in this phase to determine how they will impact
the several environmental aspects.
• Planning (Do) – comprises the identification of resources that are required and
documentation of all procedures. Communication and participation are essential
to ensure success, especially in top management positions.
• Implementation and Operation (Check) – consist of measure and monitor
processes, as well as collect and compile data and results.
• Checking and Corrective Action (Act) – aims to ensure that objectives are being
met by reviewing the management plan. The collected data from the previous
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step are used to determine if any corrective action is needed, and necessary
adjustments should be made.
• Management Review (Continuous Improvement) – intends to expand the
Environmental Management Standards to more businesses areas, enrichment by
managing more processes, products, resources and activities, and upgrade the
organizational and structural framework of the EMS.
Overall this standard helps business and organizations to grow sustainably whilst reducing the
environmental impact of this growth. However, despite the fact that the majority of studies
show that ISO 14001 certification improves environmental performance, some organisations
still suggest that future ISO certification has to include both certain elements of management
performance and certain actions that will ensure everyday harmonisation with the system
demands (Krivokapić & Jovanović, 2009). In fact, being process-oriented and not
guaranteeing an impact on environmental performance, the standard does not identify
environmental performance as key to its certification. Due to this, some organisations stated
that the certification would have greater influence if it is merged with developed
environmental performance measures. In this respect this standard is very close related to
the eco-efficiency concept, the base of the ecoPROSYS© methodology.
4.1.4 ISO 14031
ISO 14031:2013 is the internationally recognized standard that provides guidance on the
design and use of Environmental Performance Evaluation (EPE), ensuring organization's
compliance with the legal and other requirements, supporting the continuous improvement
and the prevention of pollution. It can be used by all organizations, regardless of type, size,
location and complexity. (ISO, 2013)
ISO 14031 guides on the identification and selection of environmental performance
indicators however it does not establish environmental performance levels, neither specific
methods for valuing or weighting different kinds of impacts in different kinds of sectors (ISO,
2013).
The EPE is a process analysis of environmental aspects, which uses KPIs. Applying EPE an
organization can determine trends, evaluate risk and define their own strategic goals and
targets. This process analysis can also be used to report and communicate information about
the organization’s environmental performance in order to show its commitment to
improvement and compliance with legal requirements. For this purpose, ISO 14031 includes
three types of indicators (ISO, 2013):
1. Environmental Condition Indicators (ECI)
2. Operational Performance Indicators (OPI)
3. Management Performance Indicators (MPI)
This standard and the ISO 14001 are complementary, since they provide tools that allow
organizations to track their progress towards more sustainable operations. Regarding
MAESTRI framework ISO 14031 also plays a very important role by guiding the development
of EPE, one of the three major components of ecoPROSYS© methodology. In addition, the
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Performance Indicators resulting from the implementation of this standard are used in the
eco-efficiency and efficiency assessments.
4.1.5 ISO 14040
ISO 14040:2006 describes the principles and framework to perform the Life Cycle Assessment.
However, it does not present the LCA technique in detail, nor does it specify methodologies
for each one of the LCA phases. The application of LCA results is considered in the goal and
scope definition phase, but the application itself is outside the scope of this international
standard. To be noted that this standard is not intended for contractual or regulatory
purposes or registration and certification (ISO, 2006a).
The standard results from the increasing awareness about the importance of environmental
protection and the impacts associated with products, process and services has increased
the interest in the development of methods to better understand and address these impacts.
The LCA approaches all the potential environmental aspects and impacts through the life
cycle of a product, comprising the activities of extraction and acquisition of raw materials, as
well as the production, use, recycling and ultimate disposal (i.e. cradle-to-grave) (ISO, 2006a).
The ISO 14040 defines four major components of an LCA:
1. Goal and scope definition;
2. Inventory analysis;
3. Impact assessment;
4. Interpretation.
In addition, this standard comprises two different types of studies: life cycle assessment
studies (LCA studies) and life cycle inventory studies (LCI studies). LCI studies are similar to
LCA studies but exclude the Life Cycle Impact Assessment (LCIA) phase. To compare the
results of different LCA or LCI studies, the context and assumptions of each study must be
similar. ISO 14040 contains several requirements and recommendations to ensure
transparency on these subjects.
Thus, considering the requirement to identify and quantify all input and output flows (i.e.
environmental aspects), as well as to correlate them with associated environmental impacts
providing a life cycle perspective, it becomes clear that LCA methodology has a very close
relation with ecoPROSYS© methodology. In this regard, LCA is one the best supporting
methods to assess environmental performance and influence.
Its main benefit is to present a structured and comprehensive approach to identify, quantify
and assess the environmental aspects and impacts of product systems. On other hand, it
can also assist on:
• identifying opportunities to improve the environmental performance,
• decision making process regarding environmental performance,
• selection of relevant indicators of environmental performance (i.e. KEPI),
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• environmental communication and marketing (e.g. implementing an eco-labelling
schemes, environmental claims, environmental product declaration, …)
Moreover, LCA is also a dynamic method that can be easily adapted to different product
systems, industrial circumstances, geographies or perspectives, considering both full life cycle
value chains (i.e. cradle-to-grave), or partial life cycle value chains (i.e. cradle-to-gate or
gate-to-gate). For this reason, LCA will also provide flexibility and scalability to the
environmental assessment, which are essential requirements of MAESTRI project platform.
4.1.6 ISO 14045
The ISO 14045, is the international standard that describes the principles, requirements and
guidelines for Eco-efficiency assessment of product systems - a quantitative management
tool.
The eco-efficiency assessment according to ISO 14045 foresees environmental impact
evaluation using Life Cycle Assessment (LCA) throughout the production system. Eco-
efficiency assessment shares with LCA many important principles such as life cycle
perspective, comprehensiveness, functional unit approach, iterative nature, transparency
and priority of scientific approach (ISO, 2012).
On the other hand, requirements, recommendations and guidelines for specific choices of
categories of environmental impact and values are not foreseen in this ISO Standard.
Regarding, the value of the product system, it may be chosen to reflect, for example, its
resource, production, delivery or use efficiency, or a combination of these. The value may be
expressed in monetary terms or other value aspects, for instance, functional value,
economic value or aesthetic value (ISO, 2012).
The ISO 14045 defines that eco-efficiency assessments should include the following five
phases:
goal and scope definition (including system boundaries, interpretation and limitations);
environmental assessment;
product system value assessment;
quantification of eco-efficiency;
interpretation (including quality assurance) (ISO, 2012).
The ISO 14045 main benefit is to present a structured and comprehensive approach to assess
the environmental performance of a product system in relation to its value (ISO, 2012). In line
with this statement and the main phases of ISO 14045, an environmental impacts assessment
and a value assessment, considering a full life cycle of the product system, it becomes clear
that eco-efficiency assessment according to the ISO 14045, has a very close relation with
ecoPROSYS© methodology, being one the best supporting standards to assess eco-
efficiency.
The results of the eco-efficiency assessment relate to the product system, not the product per
se. Moreover, the results of the eco-efficiency assessment will support: product development
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and improvement; strategic planning (Budgeting and Investment analysis); public policy
making; and marketing (Green purchasing) (ISO, 2012).
Regarding the main goals, of this International Standard, are to:
Establish clear terminology and a common methodological framework for eco-
efficiency assessment;
Enable the practical use of eco-efficiency assessment for a wide range of product
(including service) systems;
Provide clear guidance on the interpretation of eco-efficiency assessment results;
Encourage the transparent, accurate and informative reporting of eco-efficiency
assessment results.
Awareness raising
The reporting and critical review aspects of the eco-efficiency assessment, are also foreseen
within ISO 14045. In short all requirements and principles outlined by ISO 14045 will be taken
into account in order to assure that the eco-efficiency assessment within MAESTRI project
platform, is following international standards and good practises.
4.1.7 ISO 50001
Energy management systems are established by the ISO 50001:2011. The purpose of this
international standard is to allow organizations to have the ability to implement the
necessary processes and systems to improve energy performance, and consequently
improve energy efficiency and energy consumption aspects (ISO, 2011).
Therefore, with improvements, regarding energy consumption, possible through the
implementation of an Energy Management System (EMS), it is expected to reduce:
Greenhouse Gas Emissions of (GHG); the environmental impacts related with energy
consumption; and energy bills (ISO, 2011).
This standard specifies the requirements for the implementation of an EMS, which involves:
the development and implementation of an energy policy
the establishment of goal and targets
the development of an action plan
the collection of all legal requirements and information associated with the significant
energy consumption.
Sequentially, this management system leads organizations to comply with their internal
policies to take measures to enhance energy performance and demonstrate their
compliance with international standards. The ISO 50001 standard can be adjusted to address
the specific requirements of an organization (ISO, 2012).
The ISO 50001, can be used to certify, and voluntarily register and declare the EMS of an
organization. However, this standard dose not establish any absolute requirement, just focus
on the activities set out in energy policy, and the legal obligations of organizations. ISO 50001
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is also based on a methodology known as "Plan-Do-Check-Act", following the same
principles of in ISO 14000.
The implementation of this management systems brings environmental and economic
benefits to an organization, therefore it will help enhance eco-efficiency and resource
efficiency performance, within both – ecoPROSYS© and MSM© assessment methodologies.
4.2 Plan – Do – Check – Act approach overview
4.2.1 PCDA conceptual framework to be integrated with efficiency framework
In 1930s Walter Shewhart of Bell Labs developed a systematic problem-solving methodology
known as PDSA (Plan – Do – Study – Act). It has been later on adopted by W. Edwards
Deming who popularized it first in the 1950s amongst Japanese engineers. He used the Plan –
Do – Check – Act (PDCA) name which is therefore nowadays more popular than the original
name. PDCA (also known as Deming cycle) is an improvement cycle. It is based on a
scientific method that consists of four stages (Figure 31):
Plan – developing a hypothesis and experimental design,
Do – conducting the experiment,
Check – collecting measurements,
Act – interpreting the results and taking appropriate action.
Figure 31 - Graphic description of the PDCA wheel (Marchwinski (ed.), 2014).
The PDCA cycle begins with – Plan – the step where the problem-solver studies the problem
or opportunity deeply to understand it from various viewpoints, he or she analyses it in order
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to find the root causes, develops ideas that are countermeasures to the problem or help to
take advantage of the opportunity and prepares an implementation plan. In the second
step – Do – the plan is put into action. It is important not to hesitate with this step. The goal of
problem solving is to eliminate the root cause of the problem as quickly as possible.
Postponing the Do step prevents a problem-solver from learning whether the implementation
plan helps to eliminate these root causes. Additionally when the start of Do step is postponed
the problem-related conditions may change and the plan may become obsolete. In the
third step – Check – the effects of implementation are measured and compared to the
predicted/set target. The fourth step – Act – is about establishing the improvement as a
standard if the results are satisfactory, or taking countermeasures if they are not. (Sobek &
Smalley, 2008)
PDCA raises company’s consciousness about problems that it currently faces and helps to
prevent them from reoccurring in the future. It also aids the organization in improving its long-
term performance as a whole and avoid sub optimization that occurs when problems are
solved mainly only locally. However, achieving these benefits of PDCA requires discipline in
adherence to all four steps of PDCA and a mentor-trainee approach when developing
people as problem-solvers. This level of discipline influences whether a company develops
problem-solvers who only fix the problems (low discipline) or whether it develops people who
are capable of solving a problem and preventing it from reoccurring (high discipline).
4.3 ISO 14045 integration with the efficiency framework
As stated in previously, in section 4.1.6, both assessment methods – ecoPROSYS© and MSM©
are in line with the requirements and principles defined by ISO 14045. This will enable the
practical use of the eco-efficiency assessment within the efficiency framework and ensure
the efficiency framework assessment within MAESTRI project platform is following the eco-
efficiency international standards and good practises.
According to the standard ISO 14045:2012, an eco-efficiency assessment comprises five
interactive phases (Figure 32). The phase sequence should be respected, but several
adjustments (data and methodological) must be made to achieve a desired coherence
between goal and result. Adjustments should be conducted by a sensitivity analysis of
different choices of methodology and data to understand how these affect the results of the
eco-efficiency assessment. The output from each phase is relevant to lay down new
specifications for the previous and the next phase. It means that each step has to be revised
to check if the approach is performing a congruent eco-efficiency analysis (Baptista, et al.,
2014).
In practice, the eco-efficiency analysis is achieved through the pursuit of three core
measurements:
• Increasing the product or service value.
• Optimizing the use of resources.
• Reducing the environmental impact.
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With this in mind and taking into account the scope and main goal of ecoPROSYS© and
MSM© – integrated into the efficiency framework, it is possible to state that the efficiency
framework is well aligned with eco-efficiency three core measurements. Furthermore, by
taking a closer look to the methodological framework defined by ISO 1045 and the
description of each phase, presented in Figure 32, the practical use of eco-efficiency
assessments is assured by the efficiency framework, due to the affinity between ecoPROSYS©
and the ISO 14045 and due the close link and shared goal between the MSM© and eco-
efficiency assessment of optimizing the use of resources.
In conclusion, the efficiency framework will enable the practical use of eco-efficiency
assessment and will follow the eco-efficiency international standard and good practices.
Subsequently, these outcomes, from the MAESTRI project, will support European
standardization for efficiency assessment.
Figure 32 -Phases of an eco-efficiency assessment (ISO, 2012).
Goal and Scope Definition
Quantification of eco-efficiency Definition
Product System Value
Assessment Environmental Assessment
Interpretation
This will allow the user to define the level desired to the Eco-efficiency, describing:
-Purpose of eco-efficiency assessment; -Intended use of the results; -Product system to be assessed and boundaries of
the system and external systems; -Function and functional units; -Environmental assessment method and impact
categories; -Choice of eco-efficiency indicators;
-Interpretations and Limitations.
Based on Life Cycle Assessment according to ISO 14040 and ISO 14044. Our methodology gives the environmental profile of the study object more than individual indicators.
This assessment shall
considerer the full life cycle
of the product system. This
includes the functional
value, monetary value and
others.
The eco-efficiency profile shall be determined by
relating the Life Cycle Impact Asessment profile to
the product system value. The sensitivity analysis
should be conducted carefully. The definition of
weights of some aspects, the possibility of different
scenarios among others variables, suggests an
analysis of results for sensitivity and uncertainty for
eco-efficiency assessments.
Identify significant issues based on the results of environmental and product system value assessment phases. Formulation of conclusions,
limitations and recommendations.
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4.4 Consequences and critical factors for the efficiency framework
The management system, has an important role within the efficiency framework. It is focused
on the incorporation of sustainability aspects in company strategy and objectives. The
standards through the implementation of structured management systems, targeting
resource consumption and energy efficiency, will also enable the concentration of process
efficiency relevant data and information across different departments of the company.
The management system, besides embracing management tools that encompass LEAN
strategies related to sustainable continuous improvements, will also include synergies with ISO
standards (9001, 14001; 14040, 14045, 50001, etc.) in order to support decision making
processes and stimulate competitiveness. Moreover, this will assure that the efficiency
framework is in line with environmental, eco-efficiency and quality ISO standards.
Nevertheless, all shortcomings that arise from the standards would be carefully assessed and
avoided/mitigated.
Consequently, the management system, taking into account standard approaches, will be
able to embed energy and resource efficiency in strategy and daily improvements routines
and support continuous improvement both in term of economic and environmental issues.
As consequence of the integration of the management system (standard bases) and
efficiency framework, the efficiency framework will enable great advantages, namely
facilitate the implementation of the MAESTRI platform by: supporting companies that already
have implemented the standard; assuring international standardized compliance regarding
resource and energy aspects, i.e. resource efficiency and eco-efficiency; and adapting low
cost eco improvement to improve the total efficiency and support continuous improvement.
Ultimately, considering the scope and context of MAESTRI project, it is strongly advisable that
the efficiency framework follows and is in line with the international standards.
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The economic component of Eco-Efficiency is referred to as value. It can be expressed in
monetary indicators as well as characteristic related with its functionality, market purpose,
durability, etc. The monetary-based value indicators depend greatly of the product/process
cost structure and of the cost incurred in the several life cycle phases involved in the analysis.
So, there is the need to establish a way to account for the cost drivers of each life cycle
phase. In this report the cost and value modelling proposed for the general framework are
presented. In addition, a methodology is proposed to estimate the time and resources
needed to allow for sensitivity analysis and simulation for several scenarios.
Therefore, the aim of this section is to provide an overview of the Life Cycle Cost (LCC)
methodologies commonly applied, to explain and clarify the Process Based Cost Models
approach (PBCM) and its applicability in the computing of Eco-Efficiency indicators. An
approach for a complete life cycle analysis of value is presented. This work starts with a state
of the art about the LCC and its derivations, followed by the PBCM description. Finally the
proposed approach to assess the value dimension of the Eco-Efficiency is presented in terms
of inputs, outputs and identified limitations.
5.1 Overview of the approaches
5.1.1 Life cycle costing
The Life Cycle Cost (LCC) is a widely used cost methodology in sustainable production scope
since it accounts the incurred costs of a product or service during its complete life cycle
(from material extraction to End-of-Life treatment (EoL) (Bornschlegl, Kreitlein, et al., 2015)
(Carlsson 2009). In general, the products’ life cycle can be divided in four main phases:
material extraction, production, use and EoL. Despite the life cycle perspective proposed by
LCC, in some analysis/studies only specific life cycle phases are considered (Chakravarty &
Debnath 2014) (Du, Guo, et al. 2015), depending on the studies’ aim. The LCC methodology
is divided in four main steps: 1) Define a goal, scope and functional unit; 2) Inventory costs; 3)
Aggregate costs by cost categories; 4) Results’ interpretation (UNEP/SETAC 2011).
In the first step, the study’s boundaries and duration are defined. Other aspects related to
the analysis as allocation procedures, functional unit, and the perspective of the actor (if it is
a supplier, manufacturer, user or consumer perspective) are defined as well (Korpi, Ala-Risku
2008). The functional unit is the reference for calculation, so all the costs and benefits are
accounted and presented related to this unit. In the second phase the costs related to each
life cycle phase in study are accounted, which in the third phase are aggregated according
to their cost categories. Finally, the fourth and last part of this methodology consists in the
results’ analysis where the costs results are interpreted (UNEP/SETAC 2011).
The LCC methodology aims to be a tool for support the selection of the most effective
available alternative in an economic point of view, in other words, the alternative that
presents the least cost of in its entire life cycle. The importance of producing goods with the
least cost to acquire, use and dispose makes the LCC a powerful tool in the earliest phases
of a project (Folgado, Peças, et al. 2010). The cost considered in LCC can be also classified
5 Definition of the Life Cycle Costing analysis approach
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according to their occurrence in single (e.g. initial investment to purchase a machine),
continuous (e.g. operations costs) and regular / sporadic (e.g. maintenance costs)
(Bornschlegl, Kreitlein, et al. 2015).
Besides the LCC applicability for products assessment, this methodology is also applied to
assess processes’ costs. This kind of analysis is very useful to support the process design
selection, since it allows comparing different alternatives to manufacture the same product
in terms of costs (Chakravarty & Debnath 2014) (Bornschlegl, Kreitlein, et al. 2015).
The complexity to develop an LCC analysis, comprising the complete life cycle of a product,
had promoted the development of simplified approaches. These “simplified LCC”
approaches tend to consider only the more relevant life cycle phases and costs. However,
each simplification must be applied carefully in order to achieve reliable results (Ribeiro,
Pousa, et al. 2009).
The Life Cycle Cost Assessment (LCCA) is another cost assessment methodology, which
derives from LCC. This methodology integrates economic costs, which are accounted in LCC
analysis, and environmental costs, which are costs related to the impacts of the human
activities on the environment (e.g. air pollution, water contamination, acid deposition)
(Warren & Weitz 1994). The way of accounting the environmental costs is a controversial
point, since expressing the environmental damage in terms of costs is a hard assignment
which depends on the technician who performs the study. Besides this problem, the
environmental impact also varies depending on the study’s area, which makes the
environmental cost hard to predict (Gluch & Baumann 2004) (Keoleian, Kendall et al. 2001).
The Dynamic Life Cycle Cost (DLCC) is another variant of the LCC where the costs are
divided in two main types: static costs and dynamic costs. The static costs can be prevised in
the earliest phases of the project and they are fixed while the dynamic costs will depend on
the use and the maintenance strategies. Then, the static and dynamic costs are summed
resulting in the total costs which can be useful to support decision making processes not only
during the design phase but also in the use phase for maintenance strategies selection
(Herrmann, Kara, et al. 2011).
Independently of the applied methodology, the variability of the money in time is another
point of disagreement between researchers. Some researchers believe that the costs of a
product life cycle considering or not the variability of the money in time will not influence
substantially the final results (Korpi, Ala-Risku 2008). On the other hand, some researchers
consider this point as a main factor in the final results. In these cases, usually researchers
apply the discount rate which depends on the inflation, cost of capital, investment
opportunities and personal consumption preferences. The most common form of accounting
the income and outcome payments from different times is by Net Present Value (NPV)
(Gluch & Baumann 2004) (Bornschlegl, Kreitlein, et al. 2015).
5.1.2 Process-Based Cost Modelling
As it is expectable, the LCC methodologies require a high number of inputs. This required
data leads to two main types of performing LCC. In the first type, the LCC is only a kind of a
black box where each product cost is introduced, being the sum of these costs the total cost
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(there are few softwares available commercially). However, this kind of approach does not
allow performing sensitive analyses, since the processes are not modeled. In the second type,
the LCC are developed closely connected with a Technical Cost Modelling (TCM).
The TCM is a range of methods aiming to analyse the economic implications of different
technological alternatives available within product development. So, TCM methods provide
information about economic consequences of a product or a process before they have
been produced, which is very useful in the earliest phases of the product design. There are
two different approaches of TCM: 1) the costs are modelled having as basis similar present
and past processes or products costs, which can limit its application in new technological
processes; 2) based on details of the production and operational conditions (Field, F, Kirchain,
R, et al. 2007). One example of a cost estimation method is the Process-Based Cost
Modelling (PBCM) which first application was to analyse innovations in manufacturing
processes, in order to avoid large investments that could have a bad performance in an
economic point of view (Field, F, Kirchain, R, et al. 2007). The PBCM quantifies the needed
resources as equipment, material and energy for a specified production target, based on
estimates from engineering concepts and industry data available. With the PBCM outputs,
decision-makers could have an idea of the influence of their technical choices in a unit cost
value before those choices are implemented, which will minimize strategic errors (Field, F,
Kirchain, R, et al. 2007) (Ribeiro, Peças, et al. 2013). However, there are some costs extremely
hard to predict/model, since they depend on the product’s way of use, such as the
maintenance costs (Thiede, Spiering, et al. 2012). Despite this limitation, there are some
statistical approaches based in Monte Carlo simulation which minimize the uncertain costs.
The sensitive analysis is another technique commonly applied to minimize the uncertainties of
this kind of costs (Gluch & Baumann 2004). The PBCM also allows considering different levels
of cost estimation, since who applies this tool can select more or less inputs and outputs.
Therefore, in one hand this tool can be applied in simple analysis, where the data collection
would be easier, since less inputs and outputs are considered. In the other hand, PBCM can
also be applied in more comprehensive analyses, where the results accuracy will be higher,
however the data collection could be a lengthy process. In Figure 33 is presented a
schematic approach of a PBCM model, where the first step is to model the process
according to the product description. After this, the process requirements such as cycle time
and equipment specifications are assessed. Having the process requirements and the
production volume defined the required resources are computed through the operations
model. Finally, the financial model with price factors and accounting principles is applied
considering the required results, being the product cost the final result of this process.
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Figure 33 - Schematic PBCM approach – Adapted from (Ribeiro, Peças, et al. 2013).
5.1.3 Value Modelling
One of the main steps of an Eco-Efficiency analysis is the definition of the value profile for the
product / service. There are different approaches to assess the value profile. Therefore, the
value may be determined considering the LCC results together with the monetary indicators
such as value of sales less costs of all inputs and functional performance values such as
production capacity, life time, etc. (Baptista, et al. 2014). Besides these indicators
classification, WBCSD proposes other classes of indicators: general and specific indicators.
The general indicators have a common methodology to calculate independently of the
company, sector or country where the study is being performed. The specific indicators do
not have a well-defined methodology to calculate and can have only relevance for a
specific product or company. Thus, these last indicators have relevance inside the
company’s boundaries but they can be despised in other companies (Verfailie & Bidwell
2000). To clarify these two types of indicators, some examples are introduced in
Table 4 - Possible set of value general and specific indicators. (Adapted from Baptista, et al. 2014)
Value Indicators
General Indicators
Amount of Goods Produced (ton, kg)
Durability (years)
Sales (€)
Net Sales (€)
Specific Indicators
Gross Value Added – GVA (€)
Gross Value of Production – GVP (€)
EBITDA (€)
Overall Production Costs
Production Cost per Process (€)
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5.2 Economic approaches aiming for Sustainable Production Perspective
From the WBCSD documents, Eco-Efficiency must comprehend the value profile definition.
The value profile is built applying the relevant indicators for the specific case in study, which
can vary depending on several factors such as the company’s needs, study scope, country,
etc. (Verfailie & Bidwell 2000).
Depending on the selected indicators to represent the value profile, the data treatment
must be different to perform the Eco-Efficiency Ratios. There are two possible scenarios. In
the first one, the indicators of the value profile are better as higher they are. In the second
scenario the indicators are better as lower they are. As can be easily noticed, the first
indicators can be used directly to perform the Eco-Efficiency Ratios, since as higher is the
indicators higher will be the ratios. On the other hand, when the value is assessed based in
the LCC or other costs, some data treatment is required, since in general the product’s value
is higher as lower these costs are.
To assess the products’ Eco-Efficiency, the LCC and LCA results are commonly applied.
However, in these cases the Eco-Efficiency ratios are not representative of the products’ Eco-
Efficiency, since LCC results are not a value indicator. To perform this kind of analyses with
this data, the graphic solutions were proposed, where each axe represents LCC and LCA
results. Then, the graphic solution shows the position of each alternative depending on the
LCC and LCA results. Considering this graphic solution, the products’ Eco-Efficiency is higher
near the graphic origin (better results as lower are the LCC and LCA results) (Ng, Nai, et al.
2014) (Ferrández-Garcia, Ibáñez-Forés, et al. 2015).
5.2.1 Life cycle perspective
As it can be noticed in the previous sections of this report, Eco-Efficiency can be assessed
considering different types of indicators. Despite the Eco-Efficiency has the life cycle
perspective in its background, in several cases the companies perform the analysis only
considering inputs and outputs inside their boundaries, since these are the processes where
they have the highest control. In these cases, value indicators as sales and processes’ costs
are useful and provide relevant information (GVA, EBITDA, etc.). However, if a life cycle
perspective is adopted, the value profile should comprehend value indicators based on the
LCC results. When combined with the environmental profile data, these two types of
indicators will allow performing Eco-Efficiency ratios from complete life cycle point of view
and Eco-Efficiency Ratios of specific aspects of the product/process. So, this kind of
approach provides information about the overall product/service Eco-Efficiency while in the
same time it provides relevant information to identify the phases and processes where the
improvements can be more significant.
In the present approach, a life cycle perspective of the products/services was considered to
assess Eco-Efficiency. The Figure 34 schematizes the adopted approach to assess the life
cycle costs.
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Figure 34 - Life Cycle Cost Approach.
5.2.2 Input Parameters
The proposed approach (Figure 34) comprehends the complete life cycle. However, a
particular concern is given to the production phase since from the producer point of view
this is the life cycle phase where the improvements are more significant and easier to
implement. Therefore, in the proposed approach the production phase of the product (the
processes of the company) must be modelled under the logics of the PBCM methodology.
The resulting incurred costs outside the production phase should be introduced by the user of
the approach directly or obtained with direct calculation of resources consumptions/use,
translated in cost by general cost ratios.
The proposed PBCM approach to estimate the inputs required and outputs generated in the
product production phase is present in Figure 35. For each production system a specific
PBCM must be developed thus modelling the influence of product features and
characteristics in the processes parameters and the influence of the processes parameters in
the processes performance. In a simple description of the PBCM use, the user introduces
information such as product specification, production volume and process conditions in
order to obtain the time and physical resources required for the production phase, that are
translated in cost afterwards.
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Figure 35 - PBCM to model production phase.
5.2.3 Outputs of the approach
Having the production phase modelled and the required resources of this phase, the cost
breakdown provides two types of costs: variable costs and fixed costs. Having these data,
different Key Performance Indicators (KPI’s) are generated, as well as product and process
cost breakdown depending on the study’s scope. Also, the proposed approach assumes a
permanent link of the PBCM with the System Application and Products (SAP) company’s
data and system.
So, the value profile can be composed by two levels of outputs (for the same period of
analysis):
- The cost breakdown: the cost related information (coming from PBCM), namely the
variable costs (material, energy, maintenance, etc.) and the fixed costs (equipment,
building, overheads, etc.).
- Value related indicators: some of them functional (market and technical related
value) and others (financial related value) coming directly from the International
Accounting Standard (IAS), i.e. EBITDA, GVA, etc.
Having all this data available in the value profile, the proposed approach also allows
performing sensitive analyses and simulation scenarios, which are very useful to assess how
different production conditions influence the value indicators as well as cost and Eco-
Efficiency in general.
In addition, this approach is able to perform sensitive analysis in the value indicators. The user
can change inputs (i.e. type of material, type of machine, level of energy consumption, etc),
which will influence the modelled costs. This costs variation will change the cost breakdown
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results, which also influence KPI’s. Afterwards the KPI’s also varies, being these differences
between the initial and final conditions presented as ΔKPI’s. On the other hand, the financial
indicators which derive from the company’s SAP also changes. Despite the software does
not calculate these indicators, it is able to present their differences between the initial and
final conditions due the costs changes. Therefore, these indicators’ differences are presented
as ΔNPV and ΔEBITDA.
Beyond the economic indicators, the value profile of a product can be complemented with
other indicators such as technical and market indicators (Figure 36). These indicators should
be introduced by the user of this approach, since it depends on the product type, functional
requirements, market needs, etc. The user must introduce these indicators when the products’
characteristics change, since the approach is not able to perform this task by itself.
Therefore, to have the complete Value Profile, the user should introduce the market and
functional indicators that are valued in each case.
Figure 36 - Value Profile Modulation.
5.3 Consequences and critical factors for the efficiency framework
The reliability of the results of the present approach depends on the production process
variables behaviour modelling and inputs accuracy. Therefore, special concern must be
given to processes modulation in order to obtain reliable value indicators.
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In terms of economic indicators, the KPI’s derive from the cost breakdown, which are
obtained by the developed PBCM of the production phase. Therefore, the production
model is the key factor to achieve reliable KPI’s. Still concerning economic indicators, the
NPV and EBITDA are also assessed based on SAP companies’ data. Thus, the SAP data is also
a key aspect to define the value profile, in this case to calculate indicators such as NPV and
EBITDA.
The functional requirements and the market needs have also an important relevance on the
value profile definition. While the functional requirements are easy to define, the market
needs can be difficult to predict, since they depends on several aspects such as the study
scope, product type, country etc. Therefore, to assess the market dimension a subjective
analysis is needed, in other words, these indicators depend on the person who is performing
the analysis. In terms of functional requirements, the products must be according to the
required specifications to accomplish their functions. These functional indicators can be very
different depending on the product in study (e.g. durability, yield strength, work temperature,
etc.) which could be a limitation of the present approach.
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In the following sections the structure to be used to assess and evaluate the environmental
influence is presented. In practice, this represents LCA methodologies, impact assessment
methods, as well as the available databases that can be considered within the efficiency
framework.
6.1 The environmental assessment within the efficiency framework
An accurate management of environmental issues is essential to achieve continuous
improvement, which is a fundamental principle for successful organisations. Implementing an
effective environmental assessment on elements that have an impact on the environment,
can lead not only to a better understanding of performing activities, drivers, and barriers, but
also to cost reduction and long-term prosperity of an organisation (Baptista, et al., 2014).
According to (Madden, et al., 2006) eco-efficiency is a management strategy that
combines economic and environmental performance to create better products and
services (i.e. with more value) while reducing resource consumption, waste generation, and
pollution (i.e. with less ecological impact). Consequently, the environmental assessment is a
central topic of an eco-efficiency methodology. In practice, the ratio between these
economic and environmental topics intends to improve competitiveness and environmental
performance by stimulating productivity and innovation.
6.2 Life cycle thinking: methods and application
In practical terms, Life Cycle Thinking (LCT) supports that products, processes or services result
from successive and interactive stages that make up their life cycle. Therefore, it aims to
provide a systematic and holistic perspective to products, processes or services, covering its
entire life cycle. The main goal of LCT is then to identify improvements by decreasing impacts
across all life cycle stages of goods, production processes and/or services by avoiding
burden shifting from one stage to another. This means minimising impacts at one stage of the
life cycle, or in a geographic region, or even in a particular impact category, while helping
to avoid increases elsewhere (Giudice, et al., 2006).
For each particular stage there are several tools that provide reliable results and enhance its
quality and efficiency. Meanwhile, they can support decision making by allowing more
accurate choices considering the definitions and requirements of products, processes or
services.
From an environmental perspective, Life cycle assessment (LCA) presents a structured, and
principally comprehensive, approach to identify, quantify and assess the environmental
aspects of product systems. Cornerstone to the life cycle thinking is the understanding that
environmental impacts are not restricted to localities or single processes, but rather are
consequences of the life-cycle design of products and services. The product life-cycle
covers all processes from extraction of raw material, via production, use, and final treatment
or reuse [(ISO, 2006a), (Wenzel, et al., 1997), (Guinée, 2001), (Baumann & Tillman, 2004)].
6 Definition of the environmental assessment approach
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In addition, the combination of a quantitative approach and a holistic perspective leads to
trade-offs being clearly stated, which makes LCA a systematic tool well-suited for
environment decision making. In fact, most product systems involve long and complex
supply chains, where environmental improvement in a particular part of the chain may lead
to hidden problem shifts in other parts. For this purpose, a wide impact scope and full life
cycle ensures that trade-offs are properly identified and evaluated, being the main added
value of providing a life cycle perspective, to avoid problem shifting from one stage to
another.
Since its origin as cumulative resource requirements, LCA now is evolved into a scientific field
that includes emission inventory methods and environmental cause-consequence modelling
(Goedkoop, et al., 2002), with standardization of methodology step by step. The revised ISO
standard was completed in 2006 (ISO, 2006a). The field has since then seen tremendous
growth in specific product-oriented methods and applications such as Product Category
Rules (PCRs) and Environmental Product Declarations (EPDs), impact-oriented standards (i.e.
water footprint, carbon footprint, product environmental footprints), and policy applications.
In addition, LCA, eco-design and policy based on life cycle perspective are collectively
referred to as Life Cycle Thinking (LCT). In this matter, the European Platform for LCA presents
a mutual basis for LCT, through the ELCD database for life-cycle inventories and the
Handbook for LCA, intended to provide guidance on the application of LCA within the
European context.
Overall, LCT can promote a more sustainable rate of production and consumption and help
to use financial and natural resources more effectively.
6.3 Life cycle environmental assessment methodology
ISO 14040:2006 defines LCA as the "compilation and evaluation of the inputs, outputs and
potential environmental impacts of a product system throughout its life cycle" (ISO, 2006a).
Thus, it consists of a structured and comprehensive method which studies, assesses, and
quantifies the significant environmental impacts of all relevant emissions and resources
consumed during the entire life cycle of a product, process or service.
ISO 14040:2006 also defines the four major components of an LCA as: (1) goal and scope; (2)
inventory analysis; (3) impact assessment; and (4) interpretation of results, as illustrated in next
figure (Figure 37).
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Figure 37 - Working procedure for an LCA (ISO, 2006a). The doted lines indicate the order of procedural steps and
the dotted line indicates interaction.
Following the standard rationale, a LCA starts with an explicit statement of the goal and
scope of the study, which shall include a clear description of the product system, the
functional unit, the system boundaries, the assumptions and limitations, the data
requirements and the allocation procedures to be used, and the types of impact and the
specific methodology for impact assessment. The goal and scope includes a definition of the
context of the study which explains to whom and how the results are to be communicated.
The functional unit is a quantitative measure and corresponds to a reference function to
which all flows in the LCA are related. Allocation is the method used to partition the
environmental load of a process when several products or functions share the same process.
In the inventory analysis, a flow model of the technical system is constructed using data on
inputs and outputs. The flow model is often illustrated with a flow chart including the activities
that are going to be assessed and also gives a clear picture of the technical system
boundary. For that purpose, the input and output data required for the system model
characterisation are collected (i.e. resources, energy requirements, emissions to air and
water and waste generation for all activities within the system boundaries). Following, the
environmental loads of the system are calculated and related to the functional unit, and the
flow model is finished.
The inventory analysis is followed by impact assessment, which involves the translation of the
environmental burdens identified in the inventory analysis into environmental impacts.
Impact Assessment is typically a quantitative process involving characterization of burdens
and assessment of their effects. In the classification stage, the inventory parameters are
sorted and assigned to specific impact categories, accordingly to the selected impact
assessment methodology. The next step is characterisation, where inventory parameters are
multiplied by equivalency factors for each impact category. Thereafter all parameters
n
n n Impact Assessment
Classification
Characterisation
Normalisation
Weighting
n
n n
n
n
n
n
n
n
n
n
Goal & Scope
Definition
Interpretation Inventory Analysis
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included in the impact category are added and the result of the impact category is
obtained.
For many LCA, the assessment ends with this characterization step, which is also the last
compulsory stage according to the standard (ISO, 2006a). However, some studies involve
further steps including normalization and weighting. In normalisation the results of the impact
categories are compared to better understand the magnitude of each category result.
During weighting, the different environmental impacts are weighted against each other to
get a single number for total environmental impact.
Finally, the results from the phase of inventory analysis and impact assessment are
summarised during the phase of interpretation. The outcome of the interpretation is the
conclusions and recommendations for the product system under study. The interpretation
should include:
• identification of significant issues for the environmental impact,
• evaluation of the study considering completeness, sensitivity and consistency,
• conclusions and recommendations.
The working procedure of LCA is iterative as illustrated with the dotted lines in Figure 37. The
iteration means that information gathered in a later stage can cause effects of a former
stage. When this occurs the former stage and the following stages have to be reworked
considering the new information.
Accordingly, from a general perspective, LCA evaluates the environmental performance of
products, processes or services throughout its entire life cycle, from its “cradle” all the way to
the “grave”. The life cycle model of a product, process or service usually starts with the
acquisition of raw materials and energy that is needed for the production of the studied
object, the “cradle”. The model follows the stages of processing, transportation,
manufacturing, use phase and finally, waste management, which is considered as the
“grave”. The assessment is accomplished by identifying quantitatively and qualitatively the
stages requirements for energy and materials, and the emissions and waste materials
released to the environment related to the product under study.
6.4 Environmental assessment approach
6.4.1 Environmental assessment structure and data flow
For the purpose of the described approach, the production system is composed by the
interaction of different unit processes connected by flows of intermediate products which
perform one or more defined functions. In this sense, in accordance to a life cycle thinking
approach, to calculate the environmental influence of a production system all input and
output flows should be properly identified and quantified.
The rationale is then that the more detailed mapping of environmental aspects (i.e. input
and output flows) related to the production system, the more accurate will be the results and
greater will be the advantage taken from the environmental assessment. Consequently,
each input and output flow should be considered as separate as possible, meaning also that
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both direct and indirect environmental impacts should be considered. Taking into account
the source and its consequential impact, direct environmental aspects are all the aspects
that can be controlled directly by the company and/or over which the company has a
direct influence. On the other hand, indirect aspects are those that are related to the
activities included in the process or product life cycle, but occurring in premises owned or
controlled by third parties, e.g. upstream stages related to raw materials and consumable
goods production.
Accordingly, from a generic perspective, the input and output flows of a production system
can be define as follows:
Materials – includes all substances and materials essential to the manufacturing
process, or its proper functioning, which can form an integral part of the product or
not.
Energy – includes all form of energy essential to the manufacturing process, or its
proper functioning, which can form an integral part of the product or not.
Resources – includes all substances, materials and energy forms that are not essential
the manufacturing process, but which are intended to assist its proper functioning.
Primary Products – main material, substances or form of energy resulting from the
manufacturing process.
Co-products – products resulting from the manufacturing process which can be used
directly and without modification, in another manufacturing process within or outside
the same company.
Residues – any substance or material which the holder discards, intends or is required
to discard, including those identified in the European List of Waste8.
Emissions – direct or indirect discharged substance, material or form of energy, to the
atmosphere, water or soil, in gaseous, liquid or solid form, respectively.
Thus, considering this requisite of identify and quantify all input and output flows (i.e.
environmental aspects) of the product system, as well as to correlate them with associated
environmental impacts providing a life cycle perspective, it becomes clear that LCA
methodology should represent the best support method for the proposed environmental
assessment structure.
At its genesis LCA is one of several environmental management methods, alongside with risk
assessment, environmental performance evaluation, environmental auditing or
environmental impact assessment. However its main benefit is to present a structured and
comprehensive approach to identify, and principally quantify and assess the environmental
aspects and impacts of product systems. On other hand, and in addition to the support of
proposed environmental assessment structure, it can also assist on:
identifying opportunities to improve the environmental performance,
decision making process regarding environmental performance,
8 COMMISSION DECISION (COM 2000/532/EC) of 3 May 2000, replacing Decision 94/3/EC establishing a list of wastes
pursuant to Article 1(a) of Council Directive 75/442/EEC on waste and Council Decision 94/904/EC establishing a list of hazardous waste pursuant to Article 1(4) of Council Directive 91/689/EEC on hazardous waste.
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selection of relevant indicators of environmental performance (i.e. KEPI),
environmental communication and marketing (e.g. implementing an eco-labelling
schemes, environmental claims, environmental product declaration, …)
Moreover, LCA is also a dynamic method that can be easily adapted to different product
systems, industrial circumstances, geographies or perspectives, considering both full life cycle
value chains (i.e. cradle-to-grave), or partial life cycle value chains (i.e. cradle-to-gate or
gate-to-gate). And note that the Efficiency Framework should be adjustable in order to
assure its application to any process industry regardless the type of industry/sector and size.
For this reason, LCA will also provide flexibility and scalability to the environmental assessment,
which are essential requirements of MAESTRI project platform.
However, as a consequence of this correlation with LCA methodology, the outcome of the
environmental assessment and characterization will be permanently dependent on the
quality of the collected data. For this reason, the connection between the environmental
assessment, and consequently the Efficiency Framework, with the metering and monitoring
system and the overall platform is evident and of high relevance for proper implementation.
In addition, it is intended an expansion of what is normally considered a production system.
According to literature a production system is generally considered as a manufacturing
subsystem that includes all functions required to design, produce, distribute, and service a
manufactured product. For the purpose of the proposed environmental assessment, and
consequently the Efficiency Framework, the production system should also include the
functions that influence the performance or result from the production system, even
indirectly. From an environmental perspective, this includes the identification of opportunities
that can result in exploitable synergies with other production systems, both internally or
externally the company.
To better understand the proposed definition of production system to be used on
environmental assessment, the following figure (Figure 38) presents its schematic theoretical
structure.
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Figure 38 - Theoretical structure proposed for production system concept within the environmental assessment.
As visible in previous scheme, for the purpose of current environmental assessment, the
characterisation of a production system should be expanded to include the identification of
unused materials, energy and resources. As mentioned, this intends to integrate the
identification of opportunities, which are part of the production system outcome and usually
considered as wastes, residues or emissions, in order to exploit possible synergies with other
production systems. Apart from being strongly related to Industrial Symbiosis concept, aimed
for development in WP4 of MAESTRI project, or end-of-waste criteria (i.e. when waste ceases
to be waste and obtains a status of a product or a secondary raw material), this integration
aims also to incorporate this identification exercise into the daily routine of decision making in
every company.
In addition, several publications [(Spielmann & Scholz, 2005), (Blomberg, et al., 2011) and
(Frischknecht, et al., 2007) also refer to the importance of including equipment and, in
particular, infrastructure, in order to get a full view on the resource uses and emissions by the
product system. For this reason, the framework could additionally foresee the inclusion of
these parameters as part of the production system, not only from economic but also from an
environmental point of view. Moreover, despite not directly mentioned, the production
system can also include the required activities to affect movement of products between the
different stages and unit processes (e.g., transportation).
As a result, and considering the different mentioned flows, it is expected that this
quantification process will generate a large volume of data, which will clearly make the
decision making process more difficult. In this sense, in addition to compile all the information
from metering and monitoring system – which is also a relevant result considering that this
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type of data is disperse in most companies – the correlation with LCA methodology aims also
to generate key environmental performance indicators. In general terms, these indicators
correspond to quantifiable metrics that allow the environmental performance measurement,
highlighting the "key" issues, meaning those of most importance to understand the system
performance and simplify the decision making process.
6.4.2 Environmental characterisation and simulation
To provide effective support in decision making, the proposed framework should include a
simulation module to evaluate alternative scenarios, as well as defined goals and objectives.
The main goal will be to enable modelling of different production scenarios and production
system configurations and designs, by providing critical information for the implementation of
improvement measures.
This will be achieved by creating connections of direct influence between inventory data of
production system and goals defined by the company to each eco-efficiency principle, as
presented in Table 5.
Table 5 – Relation between eco-efficiency options and eco-efficiency principles
Eco-efficiency Options Eco-efficiency Principles
Optimize the use of resources
Reduce material intensity; Reduce energy intensity; Reduce dispersion of toxic substances;
Reduction of direct environmental influence
Reduce dispersion of toxic substances; Enhance recyclability; Maximize use of renewable resources;
Increase the value of the product / service Extend product durability; Increase service intensity.
However, being based only on environmental influence of elementary flows or reciprocal
allocation with eco-efficiency principles, the implementation of this model can lead to
incorrect conclusions. In fact, for this purpose a multi-directional approach should be
included, considering the characterisation provided by the user during the environmental
performance evaluation. As explained in section 3, the environmental performance
evaluation as part of the ecoPROSYS© methodology aims to characterize the significance of
all identified environmental aspects according to each eco-efficiency principle. Thus, from
the simulation module perspective, this characterisation can be considered as a
parameterization of the production system regarding the importance of each elementary
flow to each eco-efficiency principle. In practice, for the creation of new scenarios by
defining goals in each eco-efficiency principle, this means that each elementary flow would
be affected accordingly to the parameterization of the production system, which represents
the view of the company and the way it understands the production system.
In addition, it is clear that the simulation module would include a consequential influence
approach to, at least, predict the effect of an elementary flow variation in all other
elementary flows. This can consist on building links between directly related elementary flows,
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in order to determine how the overall production system is affected by a variation of a single
elementary flow. To provide this prediction characteristic, the simulation module may include
a direct complementarity with Material and Energy Flow Analysis (MEFA) method. Based on
mass and energy balance approaches, MEFA is an analytical method that quantifies flows
and stocks of materials, substances, products or energy forms in a defined system. One of its
main purposes is then to understand the metabolism of the different elements and flows
within a system. Thus, as consequent of this complementarity, it is expected that the
simulation module will be able to predict how the production system behaves considering
different scenarios, configurations and designs.
Finally, and as previously mentioned, a strong connection with efficiency assessment should
be also considered. Logically, it is evident that a variation of any elementary flow has an
influence on the process efficiency and/or on the production system productivity. In practice,
based on mass balance approach, this intends to represent the logical aspect that a
decrease of a certain raw material consumption has direct influence on the production
system productivity, unless it is supported by an increase in this raw material use efficiency.
For this reason, to enable the effectiveness of the relationship between process mapping
modifications, production system productivity and efficiency, a strong connection with the
MSM© methodology should be explored as far as possible.
Summing up, by the environmental point of view, the approach followed by the simulation
module would enable to:
Simulate alternative scenarios through the definition of eco-efficiency principles goals
or performing changes on inventory data;
Evaluate how the inventory data influences the achievement of eco-efficiency
principles goals, and prioritise changes according to the organisational objectives;
Define eco-efficiency principles goals and organisational objectives through the
creation of scenarios and evaluation of their consequences.
6.4.3 Life cycle inventory databases
From a process industry perspective, the Life Cycle Inventory (LCI) consists on the
identification and quantification of all input and output flows from every unit processes within
the production system. However, as presented above, including a “cradle-to-gate”
perspective to the production system makes this a very difficult task, once materials,
products and services are diverse and geographically disperse in their resources,
manufacturing and assembly operations. This highlights the need to obtain data that
accurately and consistently measure the environmental aspects of production systems
activities. In fact, the quality of an LCA outcome is a reflection of the underlying data and
how it’s assembled.
With this in mind, for the past decades, several free and commercial databases have been
developed, maintained, and updated by different general database providers, by
academics and researchers, by industry sector database providers, and by industry internal
groups. These databases are mainly intended to facilitate the entire characterization process
of all environmental aspects associated with a product or production system.
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For the purpose of current report, a comprehensive assessment of available databases was
performed in order to create a scientific basis for the Efficiency Framework concept, and
better understand the consequences of their availability to Efficiency Framework
implementation. As a result of this assessment, Table 6 presents a brief description of
identified databases.
Table 6 – Identification and description of available LCA databases
Database
Name
Developer/
Provider Description Scope Availability
ELCD -
European
reference
Life Cycle
Database
European
Platform on
Life Cycle
Assessment
Comprises LCI data from front-running EU-
level business associations and other
sources for key materials, energy carriers,
transport, and waste management. In
addition, the respective data sets are
officially provided and approved by the
named industry association.
European Free
available
APME – Eco-
profiles
Association of
Plastics
Manufacturers
in Europe
(APME)
Includes data on the consumption and
recovery of plastics used in the main
application sector of packaging, building
and construction, automotive and
electric and electronic.
European Free
available
LCA Food DK 2.-0 LCA
Consultants
Provides environmental data on
processes in food products chain and on
food products at different stages of their
value chain.
European Free
available
SPINE@CPM Chalmers
University of
Technology
Contains detailed information on all types
of freight transports, energyware
production, production of selected
materials and waste management
alternatives.
European Free
available
GEMIS
(Global
Emission
Model for
Integrated
Systems)
International
Institute for
Sustainability
Analysis and
Strategy
(IINAS)
Includes data to determine energy and
material flows for mainly energy,
materials, and transport systems.
European Free
available
Ecoinvent Swiss Centre
for Life Cycle
Inventories
central
database
Worldwide leading LCA database. The
entire database consists of over 10.000
interlinked datasets, each of which
describes a life cycle inventory on a
process level, for different geographical
regions, activities and allocation
procedures.
European/
World
Purchase
database
GABI Thinkstep Comprehensive and mainly special-
purpose LCA database based on primary
data collection, mainly from industry. It
addresses several industries from
agriculture to electronics and retail,
through to textiles or services.
Europe/W
orld
Purchase
database
World Food
LCA
Database
Quantis Food-specific database considering
environmental inventory data in food and
food related products and processes.
Europe/W
orld
Purchase
database
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Database
Name
Developer/
Provider Description Scope Availability
KCL EcoData KCL Contains nearly 300 data modules,
covering various sectors related to pulp
and paper industry.
Europe Purchase
database
IVAM LCA
Data 4
IVAM UvA BV It consists of about 1350 processes,
leading to more than 350 materials from
different industrial sectors
Europe Purchase
database
Athena Athena
Institute
Comprises more than 90 structural and
envelope materials datasets for building
and construction sector.
North
America
Purchase
database
US LCI
Database
National
Renewable
Energy
Laboratory
(NREL)
Provides a cradle-to-grave accounting of
the energy and material flows into and
out of the environment that are
associated with producing a material,
component, or assembly. It's an online
storeroom of data collected on
commonly used materials, products, and
processes.
North
America
Free
available
GREET U.S.
Department of
Energy's Office
of
Transportation
Technologies
Database allowing the evaluation of
various engine and fuel combinations on
a consistent fuel-cycle basis.
North
America
Free
available
IISI Database International
Iron and Steel
Institute
Database including resource use, energy
and environmental emissions associated
with the processing of eight stainless steel
industry products, from the extraction of
raw materials to the steel factory gate.
World Free
available
GTGLCI US Department
of Energy
Database for several materials used in
wind turbine manufacturing.
North
America
Free
available
UPLCI – Unit
Process Life
Cycle
Inventory
US Department
of Energy
Contains data to assess a product life-
cycle at the manufacturing stage. Data is
in the form of a heuristic to establish
representative estimates of the energy
and mass loss from a unit process in the
context of manufacturing operations for
products.
World Free
available
ProBas German
Federal
Environment
Agency
(Umweltbunde
samt)
It includes unit as well as aggregated
processes, for the following topics: Energy,
Materials & Products, Transportation
services and Waste. ProBas+ is an
extension and refinement of ProBas which
contains 1,800 additional data sets, data
updates, corrections for transport
processes, and an improved process
linking and data structure.
Europe Purchase
database
Agribalyse French
Environment
and Energy
Management
Agency
(ADEME)
It includes different aggregated and unit
processes, which must be connected to
background ecoinvent v.2.2. database.
Europe Free
available
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Database
Name
Developer/
Provider Description Scope Availability
USDA United States
Department of
Agriculture
(USDA)
Contains agricultural data sets with a US
background, plus crosswalks to upstream
Ecoinvent v.2.2 data sets
North
America
Free
available
Ökobaudat German
Federal Ministry
of Transport,
Building and
Urban
Development
Database mainly focused on construction
materials and processes for building
sector.
Europe Purchase
database
NEEDS New Energy
Externalities
Developments
for
Sustainability
It contains industrial LCI data on future
transport services, electricity and material
supply.
Europe Free
available
Bioenergieda
t
German
Federal Ministry
for the
Environment,
Nature
Conservation
and Nuclear
Safety
Contains processes for bioenergy supply
chains, mostly with German background.
Europe Free
available
AusLCI -
Australian
National Life
Cycle
Inventory
Database
Australian Life
Cycle
Assessment
Society
(ALCAS)
It is in its development stage but contains
nearly 300 processes mainly related to
agricultural activities in Australia.
Oceania Free
available
KNCPC
Database
Korea National
Cleaner
Production
Center
Consists on several datasets focusing
electronics, chemicals, transport systems
and waste treatments, based on a series
of industry-requested surveys.
Asia Free
available
CRMD -
Canadian
Raw
Materials
Database
University of
Waterloo
Database profiling the environmental
inputs and outputs associated with the
production of Canadian commodity
materials.
North
America
Free
available
Wood for
Good
Wood for
Good
campaign
Online information hub containing
environmental and design data
necessary to specify wood and timber
materials.
Europe Free
available
MiLCA Japan
Environmental
Management
Association for
Industry
Presents more than 3000 data sets in both
gate to gate and cradle to gate type,
mainly on Japanese industrial activities.
Asia Free
available
Space
Materials
and
Processes
database
Ecodesign
Alliance for
Advanced
Technologies
Presents a comprehensive database with
more than 400 datasets mainly related to
space and aeronautic materials and
manufacturing processes.
Europe Free
available
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From the table above it is evident the existence of numerous initiatives aimed to assist and
disseminate the implementation of LCA methodologies in different regions, sectors and
industrial circumstances. This also highlights the evolving nature of the methodology for
which is expected an increase of its application in the near future, taking into account the
overcome of its main barrier - the existence of consistence databases to model the
environmental impacts of processes and products.
Moreover, there are several other background initiatives aiming to provide consistence to
available databases and guidance principles for their development. In this matter, UNEP,
through its Life Cycle Initiative, has produced a report provide guiding principles on how
data should be collected, how datasets should be developed and how databases should
be managed (Sonnemann & Vigon, 2011). In this way the publication provides the bridge
between the data users and the data providers, making basic information easily accessible
for computing the environmental footprints of materials and products that are key to make
and judge green claims and to allow institutional and individual consumers to make
informed consumption choices.
In a complementary way, the CO2PE! initiative (Cooperative Effort on Process Emissions in
Manufacturing) has been initiated as a response to the current status of existing databases
and their highly generic nature and incomplete coverage (Kellens, et al., 2012). It is an
international initiative aiming to improve documentation and analysis of the environmental
footprint for a wide range of available and emerging manufacturing processes with respect
to their direct and indirect emissions, i.e. consistent with the objective of an LCA. CO2PE! was
developed for current and emerging manufacturing processes for discrete part
manufacturing. For this reason, its inventory database is considered to represent state-of-the-
art for manufacturing processes due to its coverage of conventional and non-conventional
processing, and its temporal relevance. Also, being the database developed for discrete
part manufacturing, it facilitates its use as a fundament for specific adaptations of the
inventories.
Concluding, in the scope of the proposed environmental approach, it is expected that the
risk of exposure to the lack of data for production systems environmental characterization is
relatively small. However, due to the existence and importance of this exposure risk, this
should be taken into account during the decision-making process for the Efficiency
Framework development.
6.4.4 Life cycle environmental impact assessment
According to ISO 14040:2006, the impact assessment is primarily intended to enhance
understanding of the LCI results (ISO, 2006a). Due to the complexity of the Life Cycle Impact
Assessment (LCIA) process many methodologies have been developed during the last
decades. However, in practice, these LCIA methodologies can be divided into two main
categories (Jolliet, et al., 2003):
• Theme oriented methods, which convert the inventory results into a number of themes,
usually greenhouse effect (or climate change), natural resource depletion, stratospheric
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ozone depletion, acidification, photochemical ozone creation, eutrophication, human
toxicity and toxicity.
• Damage oriented methods, also starts by classifying a system's flows into presented
environmental themes, but modelling each environmental theme's damage into
damage categories, as human health, ecosystem and depletion of resources.
In practice, the main differences of available methods are related to the interpretation and
weighing provided to each category, both from damage or impact perspectives. This usually
makes the whole process of selecting the best method applied to each case in a very
difficult task, which can be even more complicated if one considers the possibility of
selecting different categories from different methods in order to find the most suitable
assessment.
More recently, the Institute for Environment and Sustainability in the European Commission
Joint Research Centre (JRC), in co-operation with the Environment DG, has developed the
ILCD handbook (JRC, 2011), as part of the Commission’s promotion of sustainable
consumption and production patterns. This guidance document provides recommendations
for LCIA applications in the European context, in particular on models and characterisation
factors that should be used for LCIA. At its core, it supports the analyse of emissions into air,
water and soil, as well as the natural resources consumed in a single integrated framework in
terms of their contributions to different impacts on human health, natural environment, and
availability of resources. In this sense, it supports the calculation of indicators for different
impacts such as climate change, ozone depletion, photochemical ozone formation,
respiratory inorganics, ionising radiation, acidification, eutrophication, human toxicity, eco-
toxicity, land use and resource depletion (JRC, 2011).
The ILCD Handbook is also in line with international standards and has been established
through a series of extensive public and stakeholder consultations. For this reason, and
considering the scope and context of MAESTRI project, the LCIA application in the
environmental assessment approach that under development would follow these
recommendations.
However, the scope of the ILCD Handbook is just focused on impact categories, at midpoint
level, and damage categories, at endpoint level. This means that recommended approach
just implement the connection between inventory results and environmental impacts results
with similar impact pathways, at midpoint level, and damage results, at endpoint level. In
practice, this means that it does not allow the calculation of a single score result representing
the entire environmental influence of a production system, as required by the explained
environmental assessment approach. This includes both normalisation and weighting, which
are used to better understand the relative magnitude of each category result of the
production system. For this reason, all available LCIA methods were evaluated in order to
assess the most adequate approach to fulfil the defined requirements for environmental
assessment and best suit the process industries reality.
After this comprehensive analysis of current available methods, the LCIA selected for the
present assessment will be ReCiPe impact assessment methodology (Goedkoop, et al., 2013).
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The ReCiPe method is a damage oriented method which comprises harmonised category
indicators at the midpoint and the endpoint levels. Midpoint categories are considered to be
links in the cause-effect chain of an impact category, prior to the endpoints, at which
characterization factors or indicators can be derived to reflect the relative importance of
the impact (Bare, et al., 2000). It has been developed by RIVM and Radboud University, CML,
and PRé Consultants, being also the most currently used LCIA method.
In summary, ReCiPe method comprises eighteen impact categories, at midpoint level, and
three damage categories, endpoint categories, and enables to perform both normalisation
and weighting (Goedkoop, et al., 2013). In addition, due to weighting can represent an
additional source of uncertainty, ReCiPe method includes three different perspectives of the
methodology, using the archetypes specified in Cultural Theory [(Thompson, et al., 1990),
(Hofstetter, 1998)]. Considering the archetype view provided by this theory, different
weighting factors are assigned to the results reducing substantially the uncertainty of
weighting process.
Also considering the impact scope of proposed framework, the extension of conventional
life-cycle impact methods as recommended by ILCD Handbook, more specifically for critical
raw materials and REACH chemicals is also advised. For this reason, the conventional
characterization methods should be supplemented by aspects that shall be identified in the
life cycle of production systems, including:
• Hazardous substances as defined in the REACH authorization list;
• Critical raw materials as defined by the European Commission9.
6.5 Consequences and critical factors for the efficiency framework
The environmental assessment is a central topic of an eco-efficiency methodology. The ratio
between economic and environmental topics intends to improve competitiveness and
environmental performance by stimulating productivity and innovation.
To characterize the environmental performance of products, processes or services, applying
a Life Cycle Thinking, the Life cycle assessment arises as a structured, and principally
comprehensive, approach to identify, quantify and assess the environmental aspects of
product systems.
LCA is also a dynamic method that can be easily adapted to different product systems,
industrial circumstances, geographies or perspectives, considering both full life cycle value
chains (i.e. cradle-to-grave), or partial life cycle value chains (i.e. cradle-to-gate or gate-to-
gate). For this reason, LCA will also provide flexibility and scalability to the environmental
assessment, which are essential requirements of MAESTRI project platform, once the
Efficiency Framework should be adjustable in order to assure its application to any process
industry regardless the type of industry/sector and size. However, the outcome of the
environmental assessment and characterization will be permanently dependent on the
9 European Commission, “COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL,
THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS On the review of the list of critical raw materials for the EU and the implementation of the Raw Materia,” 2014.
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quality of generated data. For this reason, the connection between the environmental
assessment, and consequently the Efficiency Framework, with the metering and monitoring
system and the overall platform is evident and of high relevance for proper implementation.
One other important remark is that the production system analysis would include the
functions that influence the performance or results of the production system, even indirectly,
and would also be expanded to include the identification of unused materials, energy and
resources. This will allow identification of opportunities that can result in exploitable synergies
with other production systems, both internally or externally the company. This integration aims
also to incorporate this identification exercise into the daily routine of decision making in
every company.
Moreover, the results from the environmental assessment can be used for four distinct
purposes within the proposed framework:
• Present LCA results – providing an accurate information on the environmental
influence exerted by different environmental aspects, individually;
• Generate eco-efficiency ratios – providing a quantified result for environmental
influence of production system, its unit processes and environmental aspects;
• Generate KEPIs – providing quantifiable metrics that reflect the environmental
performance of a system;
• Provide a technical and practical basis for simulation of alternative scenarios and
evaluation of goals.
Apart from the system overall environmental performance, the presentation of LCA results
aim to provide accurate information on the environmental influence exerted by different
environmental aspects, individually. This is particularly important for the identification of the
most significant aspects that should be targeted during the development of improvement
measures.
Regarding eco-efficiency ratios, they intend to help companies on managing links between
environmental and value performance. Their ultimate goal is to provide a clear vision of the
system baseline performance, and to assist the implementation of strategies by connecting
the various levels of the system with clearly defined targets and benchmarks. In the same
way, KEPIs are quantifiable metrics that reflect the environmental performance of a system.
They provide businesses with a tool for measurement by focusing on ‘key’ measures – i.e.
those most important to an understanding of a business. For this reason, while eco-efficiency
ratios present the generated value in accordance to the environmental influence produced,
KEPIs are presented in quantities or environmental impacts as a function of these quantities
(e.g. kWh of electricity, kg of residues, tonnes of CO2 emitted).
In order to provide an effective support for decision making, the simulation module would be
based on connections of direct influence between inventory data of production system and
goals defined by the company to each eco-efficiency principle. Additionally, a multi-
directional approach should be also included, considering the characterisation provided by
the user during the environmental performance evaluation. Furthermore, to allow prediction
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the simulation module should also include a direct complementarity with Material and
Energy Flow Analysis (MEFA) method.
In this matter, a strong connection with efficiency assessment should be also considered. To
enable the effectiveness of the relationship between process mapping modifications,
production system productivity and efficiency, a strong connection with the MSM©
methodology should be explored as far as possible, in order to.
• Simulate alternative scenarios through the definition of eco-efficiency principles goals
or performing changes on inventory data;
• Evaluate how the inventory data influences the achievement of eco-efficiency
principles goals, and prioritise changes according to the organisational objectives;
• Define eco-efficiency principles goals and organisational objectives through the
creation of scenarios and evaluation of their consequences.
The quality of an LCA outcome is a reflection of the underlying data and how it is assembled.
In the scope of current proposed environmental approach, it is expected that the risk of
exposure to the lack of data for production systems environmental characterization is
relatively small. However, due to the existence and importance of this exposure risk, it should
be something that must always be present during the decision-making process for the
Efficiency Framework development.
Finally, considering the scope and context of MAESTRI project, it is strongly advisable that
LCIA methods follow the recommendations presented by ILCD handbook from JRC, specific
for the application of LCA in European context. In order to determine the overall
environmental influence, the recommendations from ILCD handbook should be
complemented with ReCiPe impact assessment methodology.
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This section summarises the main aspects for the integration of ecoPROSYS© and MSM© into
the conceptual efficiency assessment framework for MAESTRI project. The aim of this
framework is to optimize all process elementary flows by clearly assessing resource and
energy usage (valuable / wasteful), and each flow efficiency.
The main features for the integration of the four modules of the efficiency assessment
framework are outlined herein.
ECO-EFFICIENCY AND EFFICIENCY ASSESSMENT TOOLS
• The efficiency and eco-efficiency are a critical and central topic for the efficiency
framework.
• The efficiency and eco-efficiency are important enablers for attaining resource and
energy efficiency.
• From the integration of ecoPROSYS© and MSM©, arises as a structured, and enhanced
approach to identify, quantify and assess the resource efficiency taking into account, not
only the eco-efficiency dimensions, but also the “effective” efficiency of resources
consumed.
• The results depended on the quality of generated data.
• The efficiency framework will enable to see the real and overall gains regarding the
sustainable use of resources.
• The efficiency framework will support decisions based on simulate scenarios.
MANAGEMENT SYSTEM AND STANDARDS
• The management system, has an important role within the efficiency framework, since it is
focused on the incorporation of sustainability aspects in company strategy and
objectives
• The management system will encompass sustainable continuous improvements include
synergies with ISO standards (9001, 14001; 14040, 14045, 50001, etc.) in order to support
decision and stimulate competitiveness.
• Will assure that the efficiency framework is in line with environmental, eco-efficiency and
quality ISO standards.
• The management system encompassed by the efficiency framework will enable great
advantages, namely, assure that the efficiency framework follows and is in line with the
international standards, and all shortcomings are avoided mitigated.
LIFE CYCLE COSTING ANALYSIS APPROACH
The reliability of the results of the present approach depends on the production process
variables behaviour modelling and inputs accuracy
In terms of economic indicators, the KPI’s derive from the cost breakdown, which are
obtained by the developed PBCM of the production phase
7 Final remarks
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The functional requirements and the market needs have also an important relevance on
the value profile definition.
The functional indicators can be very different depending on the product in study (e.g.
durability, yield strength, work temperature, etc.) which could be a limitation of the
present approach.
ENVIRONMENTAL ASSESSMENT APPROACH
• The environmental assessment is a central topic of an eco-efficiency methodology.
• LCA is a dynamic method that can be easily adapted to different product systems.
• The results regarding the environmental assessment and characterization are
permanently dependent on the quality of generated data.
• Results from the environmental assessment can be used for: present LCA results; to
generate eco-efficiency ratios; to generate KEPIs; and provide a technical basis for
simulation of alternative scenarios and evaluation of goals
• The simulation will be based on connections of direct influence between inventory data
of production system and goals defined by the company to each eco-efficiency
principle.
• To determine the overall environmental influence, the recommendations from ILCD
handbook should be complemented with ReCiPe impact assessment methodology.
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