Logistics: Lifecycle Cost Analysis

Cost overruns in project planning are a major concern for those providing the resources for a project. Researchers can improve the costs associated with a particular project by reviewing the lifecycle cost analysis and identifying ways to reduce spending. When investing in simulation modeling and analysis during the operational planning stage, analyzing the benefits of single-use systems can provide an alternative to permanent systems. 

There are many benefits to applying a single-use system to the operational processes of simulation modeling. In the biopharmaceutical field, researchers have found that single-use systems increase the success rate, reduce the possibility of contamination, provide quicker changeover between experiments, reduce the amount of waste product and, most importantly, reduce operational cost (Barnoon & Bader, 2008). Other factors that determine the success of the single-use system include the application of the system, the scope of the project and the location of the project (Barnoon & Bader, 2008). Disposable systems can affect the logistics management surrounding the project and impact areas like labor demands, cleaning times, building requirements and procurement deadlines (Barnoon & Bader, 2008). The project will see immediate benefits in the reduction of acquisition costs of disposable systems versus more permanent systems, but that benefit can be negated depending on the frequency of use of the disposable system (Barnoon & Bader, 2008). Overall, the full scope of the project must be taken into consideration when determining whether a disposable or permanent system is the optimal decision.

Businesses investing in simulation modeling and analysis will continue to look for ways to reduce costs in their operations management department. By thoroughly analyzing the lifecycle costs and the operational effects of a disposable, single-use system, researchers can better utilize the funds for the project.

Reference

Barnoon, B. & Bader, B. (2008). Lifecycle cost analysis for single-use systems. Biopharm International; Nov 2008; ProQuest Central.