Life Cycle Simulation Method to Support Strategic Management that Considers Social Goals

Abstract

Manufacturing companies are expected to make decisions that achieve not only the goals of the company but also the goals of society. Each company’s decisions affect the material flow and demand of other companies. Therefore, each company can play a role in strategic management by predicting in advance the impact of its own and other companies’ decisions on the achievement of social goals. To support such strategic management, this study proposes a life cycle simulation method that can estimate the impact of strategic decisions by considering social goals. The target is a connected life cycle systems (CoLSys) consisting of multiple product life cycle systems and interactions, in which the interactions are operated according to the life cycle system of each product. A decision-making model is included in the proposed method, and changes in the interaction settings are made in each product life cycle system to achieve predefined social and individual goals. To show the effectiveness of the proposed method, a case study was conducted for a CoLSys consisting of six products: electric vehicles, gasoline vehicles, hybrid vehicles, home batteries, battery charging stands, and photovoltaic power generation systems. In the case study, the social goal was decarbonization by 2050 and the individual goal was increasing profits. The simulation results confirmed that the decision-making model would result in greater reductions in CO₂ emissions, including a faster transition from gasoline vehicles to electric vehicles. Moreover, we confirmed that the decision-making model contributed to balancing the achievement of social goals with the benefits of individual systems while adjusting the intensity of the interactions. However, it was found that decarbonization cannot be achieved by 2050 if only the assumed products and interactions are applied in the case study.