A barrage of materials-compliance regulations is springing up worldwide, challenging manufacturers to be proactive in protecting revenues, avoiding fines, and maintaining product quality. Some, however, have transformed their approach to the regulations from a burdensome compliance “chore” into a competitive advantage.
When Agilent Technologies (USA) learned that it needed to remove lead solder from its electronic test products to meet new European Union (EU) environmental regulations, it took more than five years to comply. Redesigning 2,100 products took 24 months; testing the new designs for performance and durability took another 18 months.
“If we hadn’t gotten out in front of the issue very early, the European market could have banned our products,” said Frank Elsesser, Agilent’s director of Environmental Compliance, Product Regulations and Safety. “We had a third of our annual revenues on the line, about a billion US dollars. And the regulations are expanding.”
A COMPLEX MAZE
Following the EU’s lead, regulations that limit the presence of hazardous materials in products and manufacturing processes are being adopted by government after government, affecting almost every industry. While most manufacturers respect the legislation’s intent, they face a complex maze of evolving and sometimes contradictory regulations that affect the production, distribution, use and disposal of their products.
Given the complexity, environmental compliance cannot be a one-time project, said Meglena Mihova, partner at the European public affairs consultancy EPPA (formerly known as European Public Policy Advisers). With the increasing barrage of regulations, most notably the Restriction of Hazardous Substances (RoHS), the Registration, Evaluation, Authorization and Restriction of Chemical Substances (REACH) and the Waste Electrical and Electronic Equipment (WEEE) directives issued by the EU, Mihova urges manufacturers to be proactive.
GETTING AHEAD OF THE CURVE
Companies shouldn’t sit back and wait for the next regulation, Mihova said, but should get involved as directives are written and expanded. “The politicians involved in creating environmental regulations like RoHS and REACH often fail to understand the complexity of the supply chain,” Mihova said.
“For companies to be compliant, they have to reach out to different continents and, in many cases, completely redesign a very complex product. Sometimes it takes years to find suitable substitutes and retest for the required quality and reliability of a product that may be in use for 20 or 30 years.” Mihova points to US-based Agilent as a strong example of proactive action.
Although the monitoring-and-control- equipment giant was not in the immediate scope of RoHS when the regulations were first enacted, Agilent immediately examined its supply chain and began to redesign its products with compliance in mind. Its manufacturing experts also became active participants in the legislative process.
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