cost drivers learning event, 2 nd november 2005 presented by gareth coates end-of-life costing...

Cost Drivers Learning Event, 2nd November 2005

Presented by Gareth Coates

End-of-life costing within the automotive sector


Contents

Research background

Why is EOL costing becoming important?

Stakeholders & Contemporary market drivers

Development of the End-of-life cost model

Decision support based on the model


Research background

“To create a cost oriented decision support for the recovery of the most amount of end-of-life value while at the same time meeting the legislative requirements.”

Research Aim

• 2 year ESPRC funded project

• 5 industrial collaborators

• Value recovery is focused at the automotive sector (End-of-life Vehicles = ELVs)

• Research to form the basis for PhD


- On average 2.1 million vehicles are scrapped in the UK every year [SMMT Ltd, 2000], of which :-

• 1,500,000 million are natural ELVs

• 400,000 crashed/premature write-offs.

• 200,000 are abandoned vehicles

Problem or opportunity ?

- EU legislation becoming increasingly prevalent

• Landfill Directive

• Waste Electronic and Electrical Directive

• Waste Incineration Directive

• End-of-life Vehicles Directive…


EU Directive (Summary) U.K. regulations (Summary)

• The banning of environmental detrimental substances. Dismantling

information made available.

• Supply chain software to check vehicle material composition (IMDS). Dismantling

info made available (IDIS).

• Recovery rates will be monitored by assumed metallic fraction from shredding trials. (e.g. ≈

70% metal recovered only the extra 10% needs to be measured)

• All “scappies” (ATFs) to be regulated by the Environmental Agency.

• Manufacturers to create an “own-marquee” collection network.

• The recycling and recovery of 95% of a vehicles weight (85% recycling) by 2015.

• The recycling and recovery of 85% of a vehicles weight (80% recycling) by 2006.

• The establishment of standards for the storage, treatment and de-pollution.

• The collection and processing of ELVs at no cost to the last owner.


37 shredder sites run by 8 companies

• Vehicle shredded• Magnetic separation• Eddy current separation• Approx 72% recovered through ferrous content

4 dense media separation plants

• 4% of shredded material separated by density • 24% waste, mostly landfilled

995 Registered Authorised Treatment Facilities (ATFs) in the UK

• Certificate of Destruction (CoD) issued• Car de-polluted • Some manual disassembly for part reuse


• Scrap metal value

- Easy separation process- High export value- Low logistical cost • Spare parts market

- Non-existent for natural ELV’s- Market struggling

• De-pollution costs

- High labour cost- Low resale value

• Auto plastics value

- High labour cost- High purity required- Lack of processing routes

• Landfill tax

- Slowly rising- Relatively low compared to EU

Plastic recovery

Non-ferrous scrap

Ferrous scrap

Tier 1

Manufacturer

Sales

User

ATF

Shredder

Non-ferrous recoverer

ReuseMechanic / Hobbyist

Tier 2,3…

Reconditioning

Materials reprocessors

Landfill sitesIncineration sites

Other value chains

Plastic / Aggregate

Shredder Residue

Contemporary market drivers


Cost model development

• The development of an holistic End-of-life activity map for the automobile

• Understand and modelling of the Direct and Indirect vehicle processing costs

• The influence of materials, parts and waste management markets

• The inclusion of estimate uncertainty within the model

• Validation of the model via appropriate case study data

• Tailored viewpoints to suit the user

• Effective decision-support to improve value recovery

Model requirements


VEHICLE DISMANTLERS

(Authorised Treatment Facility)

Collection & documentation processing

De-pollution

Part-removal & recycling

Crushing & transportation

Storage & movement

Last

use

r

Hulk Fragmenting

Air-classification, magnetic separation, Eddie current

separation, Manual separation

Part sale (Reuse/reconditioning)

Materials recyclingmarkets

Waste materialscosts and markets

SHREDDERS

Ferrous scrapmarket

Non-ferrous scrap

market

DENSE-MEDIA SEPARATIONLandfill

Density separation, Eddie current separation, Manual

separation, imagine recognition


Activity Based Costing (ABC)

Tim

e s

tud

ies

Pa

ram

etr

ics

Theoretical separation model


VEHICLE DISMANTLERS

(Authorised Treatment Facility)

Collection & documentation processing

Crushing & transportation

Storage & movement

Last

use

r

Hulk Fragmenting

Part sale (Reuse/reconditioning)

Materials recyclingmarkets

Waste materialscosts and markets

SHREDDERS

Ferrous scrapmarket

Non-ferrous scrap

market

DENSE-MEDIA SEPARATIONLandfill

De-pollution

Part-removal & recycling

Air-classification, magnetic separation, Eddie current

separation, Manual separation

Density separation, Eddie current separation, Manual

separation, imagine recognition


+

Last Owner

ELV dropped off

-

Vehicle storage

(2.3.2.0)

Documentation processing

(2.2.0.0)

Abandoned vehiclesMerchantnetworks

Accident damaged

B1

+A2

-A1

Address, V5 and identification of last owner

collected, de-registered and CoD issued

(2.2.2.0)

VIM located on vehicle (2.2.1.0)

ELV weighted & assessed

(1.4.0.0)

ATF collects (1.0.0.0)

Journey in (1.3.0.0)

Vehicle loading (1.2.0.0)

Journey out (1.1.0.0)

Buy-back of vehicle (1.5.0.0)

ATF processing (2..0.0.0)

Vehicle unloading

(2.1.0.0)

= Cost or revenue (when money exchanges hands to someone outside the boundary of the operation)

= Process or materials description

= Processing route

= Sub-task processing route


De-pollution

As required under EU directive. (2.4.0.0)

Crushing / Compacting

Compacting of the vehicle (2.7.0.0)

Transportation to shredders

Tipper used to transport (2.8.0.0)

+

-B2

-

B6

+

B7

-

B8

+

B5-

Vehicle moved for processing

(2.3.0.0)

Vehicle assessment & prep (2.4.1.0)

Operation identification (2.4.1.1)

Filler caps opened (2.4.1.2)

Battery removed

(2.4.2.0)

Top accessible fluids removed (2.4.3.0)

Tyres removed (2.4.4.0)

Coolant removed (2.4.3.1)

Washer-fluid removed (2.4.3.2)

Brake-fluid removed (2.4.3.3)

Steer-fluid removed (2.4.3.4)

AC-fluid removed (2.4.3.5)

+

-B3

Place on rig (2.4.5.0)

Bottom accessible fluids removed (2.4.6.0)

Petrol removed (2.4.6.1)

Engine oil removed (2.4.6.2)

Gearbox oil removed (2.4.6.3)

Dif oil removed (2.4.6.4)

+

B5-

Catalytic removed (2.4.7.0)

Wheel de-rimming (2.4.4.1)

Pb weights removed (2.4.4.2)

+

- F1+

-B4

Remove from rig (2.4.8.0)

Air-bag deployment (2.4.9.0)

Removal of hazardous substances from the vehicle (2.4.A.0)

Vehicle moved for

bailing (2.6.0.0)



Tipper loaded (2.8.1.0)

Vehicle moved (2.3.1.0)


Petrol and Engine oil drained42%

Sump opened1%

Petrol tank is drilled1%

Petrol checked1%

Vehicle picked up and placed on rig7%

Wheel bolts removed7%

Setup coolant drain2%

Caps removed off the f luid containers

2%

Bonnet poped and battery removed

7%

Setup w asher fluid drain2%

Setup brake fluid drain2%

Drain coolant, w asher & brake7%

Collection and placement6%Vehicle picked up and placed

7%

Catalytic removal6%

De-pollution time study costing


Documentation processing

(2.2.0.0)

De-pollution

As required under EU directive. (2.4.0.0)

Parts/Material dismantling

Opportunity for parts removal, if non hulk moved straight to bailer.

(2.5.0.0)

Crushing / Compacting

Compacting of the vehicle (2.7.0.0)

Address, V5 and identification of last owner

collected, de-registered and CoD issued

(2.2.2.0)

VIM located on vehicle (2.2.1.0)

+

C2

+

C1

+C3

Vehicle moved for processing

(2.3.0.0)

Vehicle unloadin

g (2.1.0.0)

Vehicle moved for

bailing (2.6.0.0)

Assessment of dismantling

(2.5.1.0)

Hulk unloading (2.7.3.0)

Vehicle loaded (2.7.1.0)

Removal of resale parts

(2.5.2.0)

Catalogue part (2.5.2.2)

Remove part (2.5.2.1)

Store part (2.5.2.3)

Removal of material

(2.5.3.0)

Removal of reconditioning parts

(2.5.4.0)

Dismantling assessment information gathered

(2.5.3.1)

Destructive disassembly

(2.5.3.2)

Sorting of materials

(2.5.3.3)

Catalogue part (2.5.4.2)

Remove part (2.5.4.1)

Store part (2.5.4.3)

Compaction (2.7.2.0)

Transportation to shredders

Tipper used to transport (2.8.0.0)

ATF processing

(2..0.0.0)


What’s recyclable? (IDIS Database for all makes)

Cross-reference

- Mass- Material - Zonal location- No. of attachments- Type of fixture - Tool

IDIS make/model parameters available:

Zonal break-down and analysis of all vehicle IDIS components

0

100

200

300

400

500

600

0 10 20 30 40 50 60 70 80

Number of attachments (n)

Dis

ma

ntl

ing

tim

e (

se

cs

)

Depolution

Doors & Glazing

Exterior

Dashboard

Seats

Interior

Engine Comp

Load space

- Accessibility - Tool & Fixture removed - Instruction required - Force requirement

What is disassembly time actually dependent on?

- Accessibility - Tool & Fixture removed - Instruction required - Force requirement

What is disassembly time actually dependent on?

ZONAL ASSESSMENT OF PARTS RECOVERY

0

50

100

150

200

250

300

350

400

450

INTERIOR TIMES LOAD SPACE TIMES ENGINECOMPARTMENT

TIMES

EXTERIOR TIMES DASH BOARD TIMES SEAT TIMES DOORS andGLAZING TIMES

Ave

rage

Zon

al D

ism

antli

ng T

ime

(Sec

s)

Times

How long does it take? (Non-destructive dismantling times from manufacturers)

Parametric equations to create disassembly

times.

How long does it take? (Destructive dismantling times

from tear-down study)

Parametric estimating of material removal costs


+

Eddy current separation

ASR-Light further separated (3.5.0.0)

Waste stream transport (3.3.1.0)

D1

Magnetic separation

Ferrous and non-ferrous content separated. (3.4.0.0)

Non-ferrous content Ferrous content

Cyclone separation

Ferrous and non-ferrous content separated.

(3.3.0.0)

Manual separation

Picking line removes non-metals (3.6.0.0) -

E1

F1

Hammer Mill

90t/h-180t’h input feed rate (3.2.0.0)

Organic. Earth/Dirt

Material processing

(3..0.0.0)

- Loading Mill (3.2.1.0)

Feed control (3.2.2.0)

Waste stream transport(3.2.1.0)


SR heavy fraction SR light fraction



Assessment (3.6.1.0)

Manual sort (3.6.2.0)






Tipper loaded (3.7.1.0)

-E1


• Processing routes vary from facility to facility

• Different makes/types of machines have varying separation capabilities

• Separation capabilities of a machine is dependent on the waste stream placed through it.

• Industrial data on separation processes is difficult to obtain

• The value of recovered materials from the SR is highly dependent on its contamination

Post-fragmentation cost modellingProblem

Solution

• A typical based model established

• Basic material characteristics used to indicate theoretical separation

• Process efficiencies (i.e. recovery & grade) can be set

E.g. Eddy-current separation


What potential uses are there for this recovery chain cost model?


Mass = Material Removal RateTime


0

50

100

150

200

250

300

350

400

450

INTERIOR TIMES LOAD SPACETIMES

ENGINECOMPARTMENT

TIMES

EXTERIOR TIMES DASH BOARDTIMES

SEAT TIMES DOORS andGLAZING TIMES

Ave

rag

e Z

on

al D

ism

antl

ing

Tim

e (S

ecs)

0.0000

0.0050

0.0100

0.0150

0.0200

0.0250

0.0300

0.0350

0.0400

0.0450

Ave

rag

e M

ater

ial R

eco

very

Rat

e (K

g/s

)

Times MRR


Mass x Value = Value Removal Rate

Time


0

50

100

150

200

250

300

350

400

450

INTERIOR TIMES LOAD SPACETIMES

ENGINECOMPARTMENT

TIMES

EXTERIOR TIMES DASH BOARDTIMES

SEAT TIMES DOORS andGLAZING TIMES

Ave

rag

e Z

on

al D

ism

antl

ing

Tim

e (S

ecs)

0.000

0.001

0.002

0.003

0.004

0.005

0.006

0.007

0.008

0.009

Ave

rag

e V

alu

e R

eco

very

Rat

e (£

/s)

Times VRR

Labour rate: 15k/annum @ £7:20/h = 0.002 £/s


1.2 Automatically updated with information

1.5 Cost analysis of operations and returns (make and model specific)

1.1 Documentation processing via live DVLA web-link

1.4 Make and model checked against parts request database and past

sales data

1.3 Live local, national and global materials purchasing

prices

1.6 Revenues, costs, work throughput and compliancy can be indirectly measured by the ATF if required


Summary

• Manufacturer “producer responsibility” has dramatically reformed the recovery chain

• EU directive implemented at a time when ELVs are viewed as valuable resource

• The long term stability of contemporary market drivers can not be guaranteed

Hence… An economic understanding of the current recovery chain is paramount

• The model described accounts for indirect and direct costs to all stakeholders

• Micro and Macro functional viewpoints possible once a base model is established

• Value improvement via decision-support can be most appropriately selected

Questions ?

cost drivers learning event, 2 nd november 2005 presented by gareth coates end-of-life costing...

Documents

cost drivers

eddie current separation

cost model development

life value

life vehicles directive

dense media separation

reuse slide

cost oriented decision