Use of Life Cycle Costing Management Technique at Glazer's, Inc. Research Paper

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Management

Rationale for the use of life cycle Management at Glazers

LCM (Life Cycle Management) is a framework which manages and scrutinises the performance and sustainability of services and goods. This framework aims to achieve the long-term objectives of the business, and gives less stress on the short-term objectives. For getting a more sustainable value chain, organizations are making use of this framework, which would in turn improve their economic and social performance. Businesses throughout the world are making use of this framework for many purposes, like to improve their standing within the market, to strengthen the relationships with the stakeholders and to produce more environment friendly goods.

LCM urges the companies to look away from their own processes, and focus on activities which are not under the direct control of the company. Such activities include the upstream and the downstream operations that become a part of value chain. In previous days, more stress was given on the production line but now days as the trade takes place on national as well as international platform, so it gets necessary to incorporate LCM in Glazer's, to give it an international touch. This would enable the business to meet more challenges.

Sustainability and the bottom line

Many opportunities can be availed by Glazer's if their sustainability challenges are met. In today's world where there are so many inflexible stakeholders and even the resources are so scarce, one needs to address the problem of sustainability, which would lead to the emergence of new business models. While answering the questions on sustainability, the leading companies, like Glazer's, discovered business models which were new and more profitable.

After meeting the sustainability challenges, a company gets ahead of its competitors who are not able to face these challenges. Those companies which successfully offer their customers what they currently desire and what they would be looking for in future are making a safe place for themselves in future.

LCM is such an approach that it benefits every business irrespective of its size. These days sustainability is regarded as a growing concept and every company which wants to see itself high up in the future, need to plan before hand. Hence, Glazer's should ensure making use of LCM.

Section 2: In-depth analysis of the Life-Cycle Costing management technique

A value chain is fundamentally connected to the suppliers, the distributors, the consumers and the end- customers. An industry wide worldwide chain is made by the synchronised interactions of individual or local value chains. Different economic sectors are mobilized when a mix of goods and services are offered to the customers. If sustainability within supply chain is enhanced, then corporations can achieve a sustainable value chain management.

What sustainability approaches can companies use?

In three categories the sustainable consumption approaches can be grouped:

1) Innovation: Innovation is a process under which a business offers new and much better products and services to the customers. For maximization of societal values and for becoming more environmental friendly, companies have started incorporating provisions.

2) Influencing the choice: Marketing and awareness programs enable the customers to get the knowledge about the goods and services which makes it easier for them to make selection.

3) Editing choice: It refers to participating with others in removing the unsustainable goods from the markets or by means of market mechanism.

At this end, sustainability tools which can be used are LCS (Life cycle assessment), LCC (Life cycle costing), and green procurement, factoring in consumption patterns of customers and then making them sustainable.

Working with suppliers and outsourcing

Without keeping an eye on the bigger picture, profitable solutions cannot be reached. Production can have significant impacts on environment and it can even act as a socioeconomic burden for the world. The manufacturing and distributing task is always complex as it involves producers, suppliers, designers, retailers and consumers. All these people are interlinked and they affect each other in one or the other. Networks and interlinks can be managed and addressed by making use of LCM.

Life cycle Management Workflow

While the differences between products and sectors were being highlighted from the past few years, now the difference between risks and opportunities along with the efforts of the management and the value chain are highlighted by UNEP/Wuppertal Institute Collaborative Centre on Sustainable Consumption and Production (Schaller et al., 2009). If we consider the overall situation, then an inconsistent type of managerial effort is seen as far as compliance is concerned. Under production phase often problems are not identified, in fact problems take place in the downstream or upstream chains.

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There is 80/20 mismatch, under which the management's efforts are devoted towards 80% of the problems, while the rest requires more time (Steiner, Valdivia and Mozur, 2009).

Management should start focusing on the more environment friendly ways of doing the work. They should adopt safer ways of extracting the resources and even the production methods used should not harm the environment. Companies need to pay attention towards the usage phase as well. Those areas where the supply chain ends, gives greater opportunities of improvement, which could be brought in social, environmental and business performance (Steiner, Valdivia and Mozur, 2009).

For the implementation of LCM, businesses have adopted a number of strategies. In addition to the organizational strategies, following are also some tools: green procurement, LCC, LCS, ecological and carbon footprint, environmental product declaration, energy and eco labelling, environment performance indicators and sustainability assessments with approaches. All these tools are essential for implementation (Steiner, Valdivia and Mozur, 2009).

Terms like footprint and value chain are going to be used in section 3, so definitions of these terms are being provided here. There are three very important tools, namely; LCC, LCA and CMM (capability maturity model). A summary of these tools is given in this study. These three tools can be used by the companies to proceed in different circumstances. With every unique situation a new solution or way is going to be followed. Therefore, flexible tools are required by the organizations.

Besides LCA and LCM, other approaches are also used by businesses. The tools which are developed by WBCSD comprise of global water tool, framework to measure impact, corporate ecosystem service review, resource kit, and sustainable purchase of wood, GHG protocol and guides for paper-based products (Global Water Tool, 2007).

What is a value chain?

A corporate value chain comprises of a complete product portfolio of the company, while a product chain completely covers one product. If the social and economic impacts are brought into consideration after every step in a chain, then the value chain can be made more sustainable.

When a product makes a move in its life cycle i.e. when it moves from one phase to another, its value increases. Let us take an example of a mobile phone that is being manufactured.

Firstly, the product is designed and then processed for development

Selection of raw materials take place, and then they are supplied to the desired destination

The manufacturing process takes place. After developing the product, the mobile phone is marketed, packed and then distributed.

Mobile is retailed, purchased by someone, used, and then services also take place.

Finally, recycling takes place, and then it is disposed off.

What is life cycle management?

The framework that manages and analyses the sustainable performance of services and goods is known as LCM.

LCM is an approach of business management that is utilized by many organizations and businesses for the improvement of their sustainability performance, and it is a method which can be utilized by both large and small firms. The main purpose of this is the surety of a much better stable and maintainable value-chain management. According to Remmen et al., (2007), LCM can also be utilized to organize, manage, analyse and target product related activities and information to a rapid improvement with the life cycle of product.

LCM can be much favourable to businesses with an aim of continuous growth by making the product sustainability and life-cycle thinking in an operational condition. Many businesses are working hard to reduce their operational procedures and minimize their socio-economic and environmental problems as well as looking for ways to maximize their socio and economic values.

What is life cycle assessment?

The awareness of value chain or the life cycle along with addressing and understanding the impacts of any development in the consumption and manufacturing of products on our environment has been increased sufficiently. LCA, one of the basic tools for this purpose, has been introduced by the International Standardization Organization (ISO) (ISO 14040/14044, [2006]).

LCA is the evaluation and the collection of inputs and output, and other interferences with the potential or current environmental impacts and aspects throughout the life cycle of a product, such as resources utilization and the consequences for the environment due to the releases, from raw material to the manufactured good, use, end of life-cycle, recycling and disposal or termed as cradle to grave.

LCA can help:

To identify the prospects for the improvement of the….....

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