Process improvement is mainly triggered by quality, safety, environmental considerations or economic potentials. First, ideas for problem solving and the related economic potential need to be analyzed before proceeding to measure, cost and risk assessment. Economic process improvement potentials and options for realization are identified using a Three Stage Method developed in BASF's Process Engineering department. The method is applied to a case study involving two products and a process improvement option. The main tool for this analysis is based on systems technology and material and energy flow analysis. Cost analysis and allocation are based on the results of material and energy flow analysis and provides a basis for developing engineering solutions. The method and the tools are applicable to a wide range of scales including global interactions of production processes and supply chains. (C) 2011 Elsevier Ltd. All rights reserved.