Life cycle costing (LCC) as a contribution to sustainable construction ...

More documents

Recommendations

Info

Towards a common European methodology for Life Cycle Costing (LCC) – Guidance Document 8 2.6 How to integrate LCA and LCC As discussed above, in LCC the primary driver in decision-making is cost and LCA informs decisions on the basis of potential environmental impacts. The use and sequence of LCC and LCA will depend on the priorities of the decision-maker. The range of approaches might cover, for example: Use of LCC and LCA as two of the criteria in the evaluation of a single investment option (such as the decision to construct an asset), where other evaluation criteria might include functionality, aesthetics, speed of construction, future investment returns etc. Use of LCC and LCA as two of the criteria in the evaluation of a number of alternative investment options (either entire constructed assets or specific components, materials or assemblies within them) Use of LCC to provide a financial/economic evaluation of those sustainability impacts that have a widely agreed and readily calculated monetary value Use of LCC to provide a financial/economic evaluation of alternative options identified in a LCA assessment Use of LCA as a means of identifying alternative options with a good environmental performance and then carrying out a LCC analysis on those options only Use of LCC to select cost effective options, then making a final decision in the light of a process of LCA carried out on those options only. Thus it can be seen that LCC and LCA can either be used alongside each other in a broader evaluation process, or either process can form an input into the other. Davis Langdon Management Consulting May 2007
Towards a common European methodology for Life Cycle Costing (LCC) – Guidance Document 9 3 Overview of the Common LCC Methodology 3.1 Stages in the Methodology The key stages in the LCC Methodology and their broad sequence, are shown on the process map overleaf. The Methodology document describes the essential activities necessary to complete each stage in the process, and identifies what users can expect to have achieved having completed each stage. A summary of each stage and the outcomes that can be expected from it is provided below. Table 3: Summary and overview of LCC Methodology STEP OUTCOME / ACHIEVEMENT 1 Identify the main purpose of the LCC analysis 2 Identify the initial scope of the analysis 3 Identify the extent to which sustainability analysis relates to LCC 4 Identify the period of analysis and the methods of economic evaluation 5 Identify the need for additional analyses (risk/uncertainty and sensitivity analyses) 6 Identify project and asset requirements - 7 Identify options to be included in the LCC • Statement of purpose of analysis • Understanding of appropriate application of LCC and related outcomes Understanding of: • Scale of application of the LCC exercise • Stages over which it will be applied • Issues and information likely to be relevant • Specific client reporting requirements Understanding of: • Relationship between sustainability assessment and LCC • Extent to which the outputs from a sustainability assessment will form inputs into the LCC process • Extent to which the outputs of the LCC exercise will feed into a sustainability assessment • Identification of the period of analysis and what governs its choice • Identification of appropriate techniques for assessing investment options • Completion of preliminary assessment of risks/ uncertainties • Assessment of whether a formal risk management plan and/or register is required • Decision on which risk assessment procedures should be applied • Definition of the scope of the project and the key features of the asset • Statement of project constraints • Definitions of relevant performance and quality requirements • Confirmation of project budget and timescales • Incorporation of LCC timing into overall project plan • Identification of those elements of an asset that are to be subject to LCC analysis Davis Langdon Management Consulting May 2007
Page 1 and 2: May 2007 Final Guidance Life cycle
Page 3 and 4: Towards a common European methodolo
Page 9: Towards a common European methodolo

Life cycle costing (LCC) as a contribution to sustainable construction ...

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?