lifetime costs.
high quality products manufactured with high social and environmental standards are commonly associated with elevated costs. however, if you consider the cost of products over their entire useful life, you may come to a different conclusion.
understanding lifetime revenue and costs of your customers are important aspects of profitability. in a similar way, your investment in remote controls needs to contemplate the total lifetime cost over their useful life.
total lifetime costs include not only the upfront price you pay or the manufacturing cost but also all the costs incurred to get the product to your customers, support it over its life and eventually return and refurbish it for additional customers.
breaking this down further, support costs are almost always hidden but if a remote control needs to be repaired due to inferior materials, design or manufacturing, this results in increased customer calls, replacement costs plus additional shipping, all of which increase upfront costs by at least 3x.
extending this concept of lifetime cost to environmental impacts, one easily show that higher replacement rates lead to higher consumption of materials, higher emissions during production and distribution and consequently to higher total environmental impacts. while an approach to improve the environmental impact of products is to optimize their lifespan (karana et al., 2014), exactly the opposite is achieved when disposable, inferior products are purchased.
although the initial aim to order cheaper products is to save money, an investment into high-quality devices would be one third cheaper in the long run.
all three pillars of sustainability can thus be promoted though the procurement of high-quality products:
- the ecological pillar through a reduced need for product replacement,
- the social pillar for high manufacturing standards, and
- the economical pillar for cost savings over the total product lifetime (purvis, 2019).
by thinking about the product lifecycle and costs in this way, you quickly conclude that higher quality products that last longer and are made with refurbishment and re-use in mind, lower lifetime costs, improve profitability and have a lower environmental impact.
