Integrating life-cycle thinking in business processes
Life Cycle Thinking (LCT) is about going beyond the traditional focus on production site and manufacturing processes to include environmental, social and economic impacts of a product over its entire life cycle (ref). The approach shapes all widespread sustainability standards and methods, from ISO14001 to the GHG Protocol or GRI. The holistic approach is even more important in circular business models, where products, components and materials are embedded in closed loops.
Adopting a life-cycle perspective is a task for the whole company, where every function is sooner or later involved, and the perspective must be embedded in the business processes and daily business, to have a real impact at operative level.
Together with a team of students from the Montanuniversität Leoben (MUL) we investigated how to do that.
The case study was an imaginary medium-size electronic company operating in B2B markets, with a global supply chain. Goal of the study was to identify the most relevant processes, to trigger their revision and adaption to include life-cycle thinking.
Starting from the overall process landscape, the team analyzed for the single processes:
- the relevance of LCT for the process;
- the role of the process for the adoption of LCT;
- The priority of adapting the process to LCT.
Most of the processes with the highest ranking (high relevance and high urgency) are all part of the core processes (define, develop & deliver products). They embrace the very first steps in market analysis and product definition, as well as manufacturing, facilities, supply chain management etc; processes usually associated to the topic of sustainability. But management, support and marketing have also important functions: controlling can for example define non-financial KPIs and investment criteria; the processes around strategy are a key aspect to leverage the potential of life-cycle thinking in innovation and operations; IT processes are pivotal to collect and manage the data for impact assessment and reporting, internally and with other stakeholders.
LCT has also a strong interplay with quality management. On one side
it supports the management system in topics like context analysis, stakeholder
management, risks and opportunities; on the other sets new challenges to
quality assurance, for example introducing secondary raw materials or re-selling used products. Sustainability and quality management complement and
support each other.
Companies that want to have a real control on their impact must adopt a life-cycle perspective. This demands the involvement of many different functions and departments across the company, well beyond the operations-quality tandem usually associated to this topic. Companies with established business processes can leverage them to integrate life-cycle perspective in their everyday business and in their strategy.
Performing the study at the highest level of process landscape led to a quick and effective analysis of the processes and definition of priorities. The implementation can be then delegated to the specialists inside the company.
A sincere THANK YOU to the students team of the QM course, WBW Institute of the MUL for their engagement, creativity and know-how, and to the Institute's team for the support during the project.