BS 8887-3:2018 pdf download.Design for manufacture, assembly, disassembly and end‑ of‑ life processing (MADE)
4.2 The business case
The balance between any additional production costs and the cost advantage of inbuilt end-of-life value is key to the business case for further use policies. Traditional business models are based on a linear model with a policy of direct sales, perhaps including some after-sales servicing for an initial period, with the purchaser making any decisions as to the use and eventual disposal of the product when it is “written-off” as valueless. More recently, some industries have moved to some form of contract lease agreement where the product ownership is retained by the manufacturer, or a related agency, which provides the use of the product to the customer. The customer usually undertakes day-to-day routine maintenance tasks and meets the costs of any fuel or other expendables. The manufacturer carries out major maintenance and upgrades or replaces the product, as necessary. Examples can be seen in the aircraft industry, where airframes and engines are often on separate contracts; in the provision of railway rolling stock to the train operators in the UK; and some areas of shipping, particularly for cargo and container shipment. In these examples, the businesses involved include a major activity where end-of-life products are refurbished, and where necessary re-certified, for further use by another customer. Other industries have taken up a model of buying back both whole products and the replaceable parts available from routine maintenance and putting them back into service. This has been widely adopted in the automotive industry, which is moving towards contract provision for the initial life-in-service, and also for some consumer electronics, such as mobile phones.
For a leasing environment, the manufacturer, or its agents, can directly recover the value, since parts put back into service do not have the costs of extracting and processing the materials. Where major sub-assemblies or components, such as electric motors, structural components or circuit boards, can be used again after appropriate checks and refurbishment, significant savings can be made. Under these circumstances, more favourable initial terms might be offered to customers, making the product more attractive. Where any recognized system of further use is in place, a policy of designing products taking this into account should be established to realize the maximum business advantage. The investment in processing raw materials, from extraction to manufacture as component parts, can be spread over a series of product lives, reducing the associated costs of each cycle. Inevitably, this means that the full return on new product development can only be made over a significantly longer period than has been the norm, but could be much higher giving the OEM (original equipment manufacture) an incentive to retain an interest.
BS 8887-3:2018 pdf download
