Whole Life Cycle Costing (WLCC) and Life Cycle Costing (LCC) are both approaches used in project management, specifically in infrastructure and civil engineering government-funded projects, to assess the total cost of a project over its entire lifecycle.
While they share similarities, there are distinct differences between the two concepts:
- Life Cycle Costing (LCC): Life Cycle Costing is a financial analysis technique that evaluates the total cost of ownership of an asset or project over its entire lifecycle, from planning and design through construction, operation, maintenance, and eventual decommissioning or disposal. Life Cycle Costing aims to provide decision-makers with a comprehensive understanding of the financial implications of different design, construction, and maintenance options.
Life Cycle Costing typically includes the following cost categories:
- Initial Costs: These are the costs incurred at the beginning of the project, such as design, construction, and installation expenses.
- Operating and Maintenance Costs: These are ongoing costs required to keep the asset functioning properly over its lifespan. This includes routine maintenance, repairs, and operational expenses.
- End-of-Life Costs: These include decommissioning, removal, disposal, or any other activities associated with the asset’s end-of-life phase.
- Whole Life Cycle Costing (WLCC): Whole Life Cycle Costing expands upon the concept of Life Cycle Costing by considering the financial costs associated with a project and broader environmental, social, and economic factors that can influence decision-making. In addition to the costs outlined in Life Cycle Costing, Whole Life Cycle Costing considers non-financial considerations like environmental impact, social benefits, and potential risks.
Whole Life Cycle Costing includes all the cost categories of Life Cycle Costing while adding the following dimensions:
- Environmental Impact: This involves assessing the environmental consequences of a project, such as carbon emissions, pollution, and resource consumption, and factoring these impacts into the decision-making process.
- Social Considerations: Whole Life Cycle Costing considers the social benefits and drawbacks of a project, including impacts on local communities, public health, and quality of life.
- Risk Assessment: Whole Life Cycle Costing incorporates risk analysis to evaluate uncertainties and potential disruptions that could affect the project’s lifecycle, such as regulation changes, technological advancements, or market shifts.
In summary, while Life Cycle Costing (LCC) and Whole Life Cycle Costing (WLCC) analyse the total costs of infrastructure and civil engineering projects, Whole Life Cycle Costing extends the analysis beyond financial aspects to include environmental, social, and risk considerations. This broader perspective allows decision-makers to make more informed choices that align with sustainability goals, societal well-being, and long-term project resilience.