REDUCING PRODUCT ENERGY CONSUMPTION WITH LEASING

Consumer demand and government regulation have led to increasing energy efficiency among consumer products to reduce environmental impacts. Continual improvement of the use-phase energy consumption results in points where it is environmentally beneficial for the product to be replaced with the newest model. Life cycle optimization is used to determine the product life spans that minimize energy consumption. Unfortunately, optimal life spans are found to be significantly shorter than current replacement periods and consumer behavior. This paper introduces the concept of using leasing as a tool for manufacturers to regulate product life spans as well as provide frequent maintenance and upgrades to improve product performance. Leasing offers flexibility that can be used to control product flow with varying replacement intervals necessary to make manufacturing optimal. Because ownership is maintained by manufacturers who are responsible for the product at its end-of-life, remanufacturing becomes an appealing alternative to landfilling, and offers additional energy savings by avoiding significant manufacturing processes. When remanufacturing is combined with optimal life cycles, significant long-term energy savings can be realized. In this paper we reveal some basic trends that could lead to a larger, more detailed study of product replacement and efficiency gains with respect to leasing. Refrigerators, dish washers, clothes washers, and vehicles are used as case studies.