What is
Life Cycle Management (LCM)?
The Life Cycle Concept
Every activity that a business performs has an impact - on a social, economic and environmental level. Often these impacts are not obvious or immediate, there are many that are hidden or indirect, that only appear when you take a more holistic view - essentially, when you take a step back and examine the complete life cycle of your products and services.
A life cycle is made up of all the activities that go into making, selling, using, transporting and disposing of a product or service - from initial design, right through the supply chain.
Life Cycle Management completes the picture
Life Cycle Management (LCM) has been developed as a business approach for managing the total life cycle of products and services. By learning how to more effectively manage this cycle, a company or organisation can uncover a wealth of business, environmental and social value - and make the choice to engage in more sustainable activities and production patterns.
Life Cycle Management is a framework for business planning and management that helps business to:
- Analyse and understand the life cycle stages of the business, product or service;
- Identify the potential economic, social, or environmental risks and opportunities at each stage; and
- Establish proactive systems to pursue the opportunities and manage or minimise the risks.
Some examples of potential risks and opportunities are summarised in the "Trends and looking ahead" section.
Life Cycle Management need not be complex, or expensive to implement. Adopting a life cycle perspective helps ensure that your choices as a business are environmentally sound. At the same time it helps you to identify opportunities to gain a stronger competitive advantage, reduce costs, improve strategic decision-making, design better products, identify new business opportunities and markets, and improve relationships with key stakeholders and even manage any inherent risks - both up and down your supply chain.
Why is Life Cycle Management useful?
Life Cycle Management is all about making more informed business decisions - and chances are that life cycle considerations are already influencing the decisions you are currently making in your business on a daily basis, such as those listed below:
- Which products to manufacture
- Design of the product or service
- Sources of energy to use
- Type and amount of packaging
- Management of manufacturing wastes
- Recycling considerations
- Preferred suppliers and their alignment with your values
Life Cycle Management is simply about helping you make these decisions in a more deliberate and systematic way - so you can engage in more sustainable production and consumption, and clearly define and measure the business value you are gaining by doing so.
To be a success, Life Cycle Management should not be deployed only as a specific methodology, technique or "add on" environmental requirement. Nor does it mean designing one green product or service that is then badged "sustainable".
It is a systematic approach, mindset and culture that is embraced throughout the business, where decisions are made that effect both the input and outputs of your product or service life cycle - from corporate strategy development, product design, production, purchasing and procurement, marketing, human resources and more.
Life Cycle Management is...
- A practical approach for improving decision making.
- A means of integrating environmental improvements and sustainability with economic efficiency.
- A basis for identifying mutual opportunities among companies at different stages in the product or service life cycle.
- An improved process for conceptualising and structuring the work that you and your supply chain may already be doing to improve efficiency and reduce risks.
- Systematic integration of product sustainability in company planning, product design and development, purchasing decisions and communication programs.
- Supported by a range of tools that provide you with vital information, data and learnings that you can feed back into your organisation to improve your performance and to create a culture of life cycle thinking.
Tools that support Life Cycle Management
Life Cycle Management is not interchangeable with Life Cycle Assessment (LCA). Life Cycle Assessment (LCA) is a specific method for systematically identifying, quantifying and assessing inputs and outputs (i.e. sources of environmental impact) throughout a product or service's life cycle. It is one of a range of tools that support Life Cycle Management, but does not have to be part of adopting Life Cycle Management.
Similarly, eco-efficiency, ecological footprint, product stewardship, Life Cycle Costing and supply chain management are also tools that support the implementation of a Life Cycle Management approach.
Drivers for the adoption of Life Cycle Management
Many people have heard the term Life Cycle Thinking. Life Cycle Management is simply life cycle thinking in practice.
Life Cycle Management is a relatively new approach that brings together different elements of practices that have been used in businesses around the world for decades. Life Cycle Management grew out of the application of business efficiency and Life Cycle Assessment tools and the need for us to experience and share the learnings from Life Cycle Assessment across all aspects of a businesses operation and strategic planning.
Key Drivers
Multi-national companies and small businesses alike are adopting life cycle approaches in response to a range of drivers:
- Governments around the world are introducing regulations and co-regulatory schemes that are prompting businesses to take action on becoming more sustainable and implement Life Cycle Thinking (eg. Europe - End of Life Directives for Vehicles and Electronic Equipment, Japan - Law for the Life Cycle Economy, Australia - National Packaging Covenant and proposals for similar co-regulatory schemes for TVs and Computers)
- The increasing need to manage supply chain risk due to increasing pressure from stakeholders;
- Supply chain management is being driven by customer demand - for product information and corporate purchasers' needs to identify and reduce product or reputation risk;
- The need to understand product impacts and gain a competitive position in the environmental marketplace (including preparation for environmental defence); and
- The requirements of international conventions on environmental issues, for example, ozone depleting substances, waste management and greenhouse gas emissions.
UNEP Life Cycle Initiative
The United Nations Environment Program's (UNEP) Life Cycle Initiative is designed to promote sustainable consumption and production patterns. UNEP suggests that "the concept of Life Cycle Thinking integrates existing consumption and production strategies, preventing a piece-meal approach. Life cycle approaches avoid problem shifting from one life cycle stage to another, from one geographic area to another and from one environmental medium to another. Human needs should be met by providing functions of products and services, such as food, shelter and mobility, through optimised consumption and production systems that are contained within the capacity of the ecosystem."
"Consumers are increasingly interested in the world behind the product they buy. Life Cycle Thinking implies that everyone in the whole chain of a product's life cycle, from cradle to grave, has a responsibility and a role to play, taking into account all the relevant external effects. The impacts of all life cycle stages need to be considered comprehensively when taking informed decisions on production and consumption patterns, policies and management strategies."
Klaus Toepfer, Executive Director, UNEP
