Page 128 - Design for Environment A Guide to Sustainable Product Development

Performance Indicators and Metrics 107

Economic metrics
• Average life-cycle cost incurred by the manufacturer
• Purchase and operating cost incurred by the customer
• Cost savings associated with design improvements

Value creation metrics
• Utilization of renewable resources
• Avoidance of waste or pollution
• Reduction in energy requirements
• Human health and safety improvement
• Fulfillment of human needs (nutrition, mobility, etc.)
• Restoration or reuse of nonproductive assets
• Enhancement in environmental quality, land use, or
biodiversity
• Enhancement in community quality of life
• Enhanced economic development and job creation
• Improvement in customer environmental performance

At the aggregate level, these metrics represent the overall perfor-
mance of the manufacturing enterprise; they are sometimes called
primary or high-level metrics. Typically they are driven either by a fun-
damental customer need or by important internal constraints (e.g.,
process capability). The relationship of primary metrics to product
goals and objectives is illustrated in Table 7.1.
Primary metrics can be used to establish measurable overall
objectives for a product development team. However, in order to be
useful for quality improvement, primary metrics generally need to be
decomposed into operational metrics, which represent observable and
controllable measures associated with a product or process. These
operational metrics can be used not only to monitor continuous
improvement but also to develop incentives and reward systems for
individual employees or teams.
Operational metrics can be defined through a business model
that relates the performance of company assets and functional activi-
ties (e.g., fuel procurement) to the environmental performance of the
company as a whole (e.g., hazardous air emissions). In particular,
product metrics become operational when they are associated with a
specific feature, module, or component of a design, and can, there-
fore, be estimated, tested and verified. Similarly, operational process
metrics represent observable and verifiable measures associated with
particular operations and business processes (e.g., number of defects
per million units produced). Figure 7.4 illustrates how operational
metrics can be derived from primary metrics related to recyclability
of durable goods.