LCA and Management “Nature abhors a vacuum.” Baruch Spinoza (1632 – 1677) and so does Management! Management decision are generally made within a complex framework of competing interests, with both internal and external drivers. If and how LCA fits into the decision- making process depends on the unique combination of factors that characterizes each firm.

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External Factors Regulatory environment Product sector record Customer chain interests and demands (market niche) Supplier chain interests and demands Financial market expectations (especially for publicly held corporations) Societal expectations and legal norms

Internal Factors Resource constraints (people, time, money, knowledge) Business objective Risk profile (by risk) Product performance expectations Decision-maker’s individual preferences and influences Perception of external factors

Some typical factors in management decision-making Note: factors are not necessarily independent – the price you pay for complicated systems. Cost Schedule Performance Risk Competitive advantage Manufacturing capacity Worker relations Stakeholder relations Reception on Wall Street Cost

Injecting environment into the discussion – some examples CO2 emissions – fuel efficiency (mpg) and combustion technology – operating costs – competitive advantage Fuel efficiency (mpg) and combustion technology – CAFE Standards – regulatory risk Heavy metals usage – recyclability – product take-back requirements – regulatory risk Heavy metals usage – soil and water contamination – regulatory risk and future financial liability risk Heavy metals usage – worker exposure – personal protective equipment – schedule delays and cost

Decision-making Toolkit Risk – return/benefits charts Cost – benefit analysis Return on investment analysis Multi-attribute tools Analytic Hierarchy Process (AHP) Multi-attribute Utility Theory (MAUT) Expected value analysis

Cost to implement High Low Risk of environmental violation.. High Low.. Expected warranty costs Access to new markets.. baseline design new design Chart examples

A few last thoughts! Don’t come to me with a 200 page report and pages of tables and charts. Don’t tell me it will take several years to complete the LCA. Give me one or two numbers at most. When I say risk, I mean risk to the business, not risk to the environment. Try to learn some of my terminology and language.