Comparative Case Application: Dashboard crossmember

In this phase, the C-Level Board sets the financial boundaries and governance weightings for the decision algorithm:

• Market-Driven Price = €40.00
• Target Margin = €8.00 (20%)
• Target Cost = Market Price – Margine = € 40.00 – € 8.00 = € 32.00
• Strategic DtGC Score Weights (W_i) : W_c + W_e + W_f + W_r = 1
  • W_c (Cost)= 0.3 (30%)
  • W_e (Green OpEx)= 0.4 (40%)
  • W_f (Functional Performance)= 0.1 (10%)
  • W_r (Supply Chain Risk)= 0.2 (20%)
• Supply Chain Risk Index (R^A) = 0.9 The Extra-EU supplier is evaluated as low vulnerability in a range 0-1

Engineering teams break down functional requirements and verify non-negotiable minimum thresholds (Pass-Fail Gate):

• Structural Requirements: 9.40 kg gross weight of primary virgin steel.
• Hard Constraint Validation (Fⁱ ≥ F_min ): Product A satisfies all mechanical and safety requirements (F^A = 1.00 ), passing the technical admissibility threshold. Engineering team defined the minimal structural performance index : F_min = 0.85

Analytical separation between direct industrial costs (Cost Engineering) and environmental liabilities exposure (Green Engineering):

• Cost Engineering :
  • Direct Industrial Cost : Ce^A = € 15.72
  • Logistic Cost Log^A = € 13.73
  • Target Cost of Goods Sold = Target Cost – Log = € 32.00 – € 13.73 = COGS^A = € 18.27
• Green Engineering :
  • Total Carbon Footprint ( LCA analysis ): Ge^A = 61.19 kg CO2e
• ESG Controller :
  • CBAM Regulation CBAM^A = € 1.97
  • EPR Directive EPR^A = € 0.02
  • EU ETS System ETS^A = € 0.09
  • index Eco-Efficiency Ratio : Ce^A / Ge^A = € 15.72 / 61.19 kgCO2e = iER^A= 0.25 €/kgCO2e
  • Environmental Exposure : CBAM^A + EPR^A + ETS^A = Green OpEx^A= € 2.08
  • Total Integrated Cost of Production : = Ce^A + Log^A + Green OpEx^A = TCP^A= € 31.53
  • Extra Target Margin (TCP target – TCP) = Target Cost – TCP^A = € 32.00 – € 31.53 = € 0.47 Target Cost PASSED

Cross-functional teams apply the levers of the 7R Framework (Redesign, Reduce, Recycle, Re-source, etc.) to generate alternative bill of materials (BOM) configurations.
Below we report only the parameters that change compared with Product A

Gate 1 – R&D & Engineering (Technical Eco-Efficiency Check):

Δ iER Comparison : Solution A,B,C

Metric	Product A (Baseline)	Product B (Full DtGC)	Product C (traditional DtC)
Description	Conventional supplier Extra-EU	Eco-Design: -10% kg EU	Value Optimization: -10% kg Low-Cost supplier Extra-EU
Direct Industrial Cost (Ce)	€ 15.72	€ 16.56	€ 13.60
Total Exposure (Green OpEx)	€ 2.08	€ 0.02	€ 2.28
Logistic Cost (Log)	€ 13.73	€ 2.50	€ 13.73
Total Integrated Cost (TCP) (Target Cost = 32.00 €)	€ 31.53	€ 19.08	€ 29.61
Carbon Footprint (Ge)	61.19 kg CO₂e	58.40 kg CO₂e	67.31 kg CO₂e
Direct Industrial Cost Delta (Δ Ce)	Baseline	+ € 0.84	– € 2.12
Integrated Cost Delta (Δ TCP)	Baseline	– € 12.45	– € 1.92
Emissions Delta (Δ Ge)	Baseline	– 2.79 kg CO₂e	+ 6.12 kg CO₂e
Eco-Efficiency Ratio ( iER )	0.25 €/kg CO₂e	0.28 €/kg CO₂e	0.20 €/kg CO₂e
Delta Eco-Efficiency Ratio (Δ iER)	Baseline	+ 0.03 €/kg CO₂e	– 0.05 €/kg CO₂e
Extra Target Margin	+ € 0.47 (Target Surpassed)	+ € 12.92 (Target Surpassed)	+ € 2.39 (Target Surpassed)
Green Deal Cost Impact (Product Changes)	Baseline	Reduction	Increase

Key Notes

• Product B achieves deep decarbonization (-2.79 kg CO₂e , -4.6%) while simultaneously cutting overall integrated costs by €12.45 thanks to this carbon reduction.
• Product C yields slightly higher short-term cost savings (-€2.11 , -13.4%) but with a carbon increase (+ 6.12 kg CO₂e, +10.0%), leaving the organization heavily exposed to future environmental levies (€2.28 residual exposure).

Gate 2 – C-Level Board & ESG Controller (Strategic Selection):

Quantitative Step-by-Step Calculation: Min-Max Normalization & DtGC Score

Using the corporate strategic weights Wc = 0.30, We = 0.40, Wf = 0.10, and Wr = 0.20, the min-max normalization values across the four alternatives are calculated as follows:

Product Option	CN (Integrated Cost)	EN (Green OpEx)	FN (Function)	RN (Supply Risk)	DtGCscore
					Wc x (1 – CN )+ We x (1 – EN )+ Wf x FN + Wr x RN )
Product A (Baseline)	1.00	0.91	1.00	0.60	25.50
Product B (Full DtGC)	0.00	0.00	1.00	1.00	100.00
Product C (Trad. DtC)	0.85	1.00	0.00	0.00	4.62

Comparative Results Matrix: iER vs. DtGC Score

The summary matrix below presents the financial, environmental, and strategic evaluation across all four product options

• Cost Engineerign, Green Engineering & Value Engineering are focus on the ΔiER
• Financial & Purchasing department are focus on DtGC Score

Option	Ce (€)	Log (€)	Green OpEx (€)	TCP (€)	Ge (kg CO2e)	iER (€/kg)	ΔiER (€/kg)	DtGC Score	Net Margin (€)
Product A (Baseline)	15.72	13.73	2.08	31.53	61.19	0.25	Base	25.50	8.47
Product B (DtGC)	16.56	2.50	0.02	19.08	58.40	0.28	+0.03	100.00	20.92
Product C (trad. DtC)	13.60	13.73	2.28	29.61	67.31	0.20	-0.05	4.62	10.39

Key Executive Takeaways & Strategic Insights

1. Product B is the Global Winner (DtGC Score 100/100):
   Although Product B incurs a +0.84 € direct industrial material premium, its eco-design architecture reduces carbon emissions by 4.6% and eliminates CBAM tariffs. Green OpEx drops from €2.08 to €0.02, yielding a total integrated cost of €19.08 (below the €32.00 target) and delivering the highest sustainable net margin (€20.92 vs €8.00 target).
2. The Failure of Traditional Cost Management (Product C – DtGC Score 4.62/100):
   Sourcing a lower purchase price (-€2.11) without addressing carbon intensity increases environmental liabilities (€2.28). The real net operating margin collapses to €10.39.

Continuous tracking and P&L reconciliation led by the ESG Controller:

• ESG Controller Diagnosis: Identifies that Product A exposes the company to severe financial vulnerabilities (realized margin of only € 8.47 ) and heavy dependency on carbon tariffs and ETS market fluctuations.
• PDCA Cycle: The optimization of Product A triggers an immediate Redesign Loop, steering the engineering team toward low-carbon, low-integrated-cost solutions.