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7A (1) - Simulation and Modelling (TU9/12) Total Cost of Ownership (TCO) - A tool for economic environmental measures. Saur, Konrad1, Fava, James*,2, Heckmann, John2, 1 Five Winds International, Donzdorf, Baden-Württemberg, Germany2 Five Winds International, Philadelphia, PA, USA ABSTRACT- While progress has been made since the early 1990s in developing, implementing, and integrating environmental and social aspects into decision-making, often decisions are still made with little consideration of the full range of impacts and benefits they may generate. For example: purchasing agents who are given a budget to purchase a particular ingredient, product, or technology often only consider price in their decision to buy. Their budget is not affected by the costs associated with ownership and use of what they buy. Such hidden costs could include higher waste disposal and handling fees and the need to buy protective gear for workers, which, when taken together, may substantially raise the real cost of the purchase. While the decision may be rational at the individual or site level, it is less rational when the system boundaries are expanded. Similarly, materials produced using clean technologies may cause significant environmental impacts in other life-cycle stages. In order to make decisions that lead to a net or overall improvement in the environmental impacts associated with consumption and production, it is necessary to have the framework and information needed for understanding relative impacts, trade-off and opportunities along the product system. Organisations are interested in evaluating products or services by identifying the total system costs associated. Successfully implemented case studies demonstrated, that the identification of life cycle environmental, health, and safety costs can provide a more accurate representation of the true costs. As well, the TCO concept helped in the development and testing of a tool to competitively position products and improve environmental performance. This paper will discuss the underlying methodology and present key findings from case studies. Key words: Sustainabilty, Total Cost of Ownership, Business Benefit |
