The drive for sustainability and minimizing the environmental footprint of products continue to be top of mind for manufacturers in 2012. Design engineers are being tasked with assessing the full product life cycle cost for products they design and produce. There are clear advantages to doing this early in the design process and it helps minimize surprises in production. When it is done right, it can help reduce the life footprint of a product’s impact on the environment from cradle to grave.
But, capturing all of those costs is no simple feat and many smaller things get overlooked. In this white paper titled “Hidden Costs in Product Life Cycle Cost Analysis“, author Ken Kozicki explores some of those hidden costs that are overlooked in product life cycle cost analysis, especially when it comes to public transit vehicles like trains and buses.
In defense of the transit authorities [and from their perspective], many vendors enhance or misrepresent their respective products’ life performance claims and either omit substantiated time-simulated data or exaggerate future savings. Typical cost models have the tendency to be over-simplified and lack the flexibility needed to accommodate specific and customized variables not shared among transit authorities. Lastly, there are hidden, intangible and questionable costs that may be difficult or impossible to estimate.
Just for the interior of a transit vehiclee, the typical life cycle cost analysis goes like this:
Within the interior, seating is one of the five most costly elements of the rail car and is at the top of the list for future refurbishments. Assessing new build costs with forecast refurbishment estimates is seemingly straightforward. As a start, Whole Cost Analysis would include the following factors: (1) the cost of seating for the initial new-build delivery (2) assumptions of how far into the future the transit authority will keep the seats in service before a full or partial refurbishment (3) estimated costs of the refurbishment and (4) historical costs for replacements between refurbishments. Other considerations may include the cost of labor and lost revenue while the seat or rail car is in refurbishment or out of service. Ridership dissatisfaction due to seating discomfort or style could also be identified as an intangible cost. But, regardless of the depth of such an analysis, this list is relatively common and generally used in the decision matrix. There are, however, hidden costs that rarely come to the surface.
In the paper, Ken brings awareness to these other potential hidden costs:
In the development of a seating life cycle cost analysis, Time-to-Refurbishment is most commonly coupled to Loss-of-Comfort. An argument can be made, however, suggesting Compromised Safety as another criterion, which could become a significant source of hidden cost.
Download the paper and discover what other areas need to be considered….