Understanding Life Cycle Assessment (LCA)
Life Cycle Assessment (LCA) is a critical process used to evaluate the environmental, social, and economic impacts of a product, process, or service throughout its entire lifecycle. Often referred to as “cradle-to-grave” analysis, LCA examines every stage from raw material extraction through production, distribution, use, and final disposal or recycling. The insights gained from LCA enable businesses to make informed decisions regarding sustainability, cost-efficiency, and risk mitigation.
We once saw a great example of the benefit of this when working on a project with Microsoft. Trying to improve the Scope 3 emissions of an item, the LCA showed that engineering changes on an item could extend the shelf life & efficiency of use for 2-3 years longer. This consideration probably would not have made it into the final configuration of the product had it not been for the ‘LCA’ analysis that showed the long term benefit on scope 3 emissions experience by the end consumer. So in this case, a great example of the better outcomes that can be reached. But what are the stages?
Stages of a Product’s Lifecycle and LCA Considerations
1. Raw Material Extraction (Cradle)
This stage involves sourcing raw materials from natural resources. LCA helps assess the environmental impact of material extraction, considering factors such as:
- Resource Depletion – Evaluating the consumption of nonrenewable vs. renewable materials (EV.2.1, EV.2.2).
- Energy Consumption – Measuring the energy required for mining or harvesting raw materials (EV.1.2, EV.2.3, EV.2.4).
- Greenhouse Gas (GHG) Emissions – Quantifying emissions related to extraction processes (EV.1.4, EV.2.7, EV.2.8, EV.2.9).
2. Material Processing & Manufacturing
At this stage, raw materials are processed and transformed into products. Key LCA considerations include:
- Supply Chain Strategy and Network Design – Ensuring efficiency and sustainability in sourcing (OE1, OE7).
- Waste Management – Monitoring waste generation and diversion strategies (EV.1.5, EV.2.10, EV.2.11).
- Total Supply Chain Management Cost (CO.1.1) – Balancing cost efficiency with sustainable practices.
3. Distribution and Logistics
Once products are manufactured, they must be transported and stored before reaching customers. LCA examines:
- Fuel and Energy Consumption – Identifying renewable vs. nonrenewable energy use (EV.1.2, EV.2.3, EV.2.4).
- Emissions from Transport – Measuring the carbon footprint of logistics (EV.1.4, EV.2.7, EV.2.8, EV.2.9).
- Risk Management – Identifying and mitigating supply chain disruptions (OE9, OE9.1, OE9.2, OE9.3, OE9.4).
4. Product Use & Maintenance
The usage phase of a product’s lifecycle is crucial in determining its long-term sustainability. LCA focuses on:
- Water and Energy Consumption – Assessing operational sustainability (EV.1.3, EV.2.5, EV.2.6).
- Maintenance, Repair, and Overhaul (MRO) – Evaluating service life extension strategies (T3, R3).
- Return on Fixed Assets & Working Capital – Maximizing efficiency in resource utilization (AM.1.2, AM.1.3).
5. End-of-Life Management (Grave or Circular Economy)
The final stage involves product disposal, recycling, or reuse. LCA helps optimize:
- Waste Management Strategies – Reducing landfill waste through circular supply chain principles (OE13).
- Material Recovery & Recycling – Evaluating opportunities for repurposing materials (R1, S4).
- Integrated ESG Reporting – Aligning sustainability goals with corporate strategy (OE10, OE10.6).
Metrics & Key Performance Indicators (KPIs) in LCA
To effectively measure and optimize LCA, organizations rely on key metrics, including:
- Cost of Goods Sold (COGS) (CO.1.2) – Understanding cost implications of sustainable practices.
- Sustainability Standards and Frameworks (HS.0222) – Ensuring compliance with global benchmarks.
- Triple Bottom Line (HS.0191) – Balancing people, profit, and planet in decision-making.
Conclusion
LCA provides businesses with a structured approach to sustainability by integrating environmental, social, and economic considerations throughout the product lifecycle. By leveraging SCOR-based best practices and robust metrics, companies can not only reduce their ecological footprint but also enhance resilience, optimize costs, and drive long-term value creation. Whether through risk management, sustainable procurement, or circular economy initiatives, a comprehensive LCA approach ensures that supply chains are future-ready and aligned with global sustainability objectives.
