Comment and Opinion: RoHS: Is time running out for business to comply?

Forget the Millennium Bug, decimalisation and even a change of government; the RoHS (Restriction on the use of certain Hazardous Substances in Electrical and Electronic Equipment) Directive is potentially the biggest issue to hit electronics manufacturers, suppliers and retailers in living memory. The trouble is, an alarmingly high number of people who should know better have never heard of it and have little idea of what they need to do to comply.

Under the EU Directive - which is due to be enforced in the UK from July 1, 2006 - manufacturers, importers, brand owners, and potentially even retailers, of electrical goods must be able to demonstrate their products are RoHS compliant and do not exceed threshold limits for six toxic substances.

Paul James, general manager at Exel examines the impact RoHS legislation will have on the manufacturing supply chain and what the electrical and electronic sectors need to do to cope with the demands of environmental regulations. Some manufacturing engineers may ask what RoHS actually is and how it fits in with the WEEE (Waste Electrical and Electronic Equipment) Directive, which is concerned with the disposal of electrical goods. Like WEEE, the purpose of RoHS is to 'reduce the waste management problems linked to substances likely to pose risks to health and the environment'. It will apply to the same producers and product range as described in the WEEE directive, but will focus on the manufacturing side of the equation.

From July 1, 2006, new electrical and electronic equipment must not contain more than agreed levels of lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls (PBBs) or polybromided diphenyl ethers (PBDEs).

Certain applications are exempt from the Directive, such as mercury in certain types of fluorescent lamps, lead in the glass of cathode ray tubes, electronic components and fluorescent tubes, lead in electronic ceramic parts and haxavalent chromium as an anti-corrosion of the carbon steel cooling system in absorption fridges.

Implementing RoHS may look relatively straightforward in principle but presents some huge potential dilemmas in practice for manufacturers. Although the single market route delivers regulation uniformity for all member states, there are a number of subsequent factors that start to complicate things.

The scope of the directive is huge, with thousands of electrical and electronic products in every day consumer and industrial life that are unique to each marketplace. Add to this mass market the complexities of dealing with several suppliers for the same component part as well as the differing requirements in each member country and its easy to see how the devil will certainly be in the detail.

For many businesses, the task of data collection concerned with RoHS compliance is proving onerous, with many putting off the challenge until its importance starts to bite home.

Manufacturing companies need to be reviewing their components now in light of RoHS as even simple product redesign can take months to complete. Add to this the time taken to obtain compliance certificates from large numbers of both UK and overseas suppliers and it is easy to see how the need to act now in readiness for July 2006 could not be more pressing.

The bottom line is: if you can't demonstrate full supply chain compliance by next summer, you are likely to lose business.

Evidence from Holland suggests that penalties have real teeth - as a major manufacturer found to its cost when its product was removed from warehouses when it was found to contain banned substances. The episode - which is reported to have forced the withdrawal of 800,000 game consoles - may be a bitter foretaste of what's to come in the UK and other European countries.

This doomsday scenario has massive implications for supplier relations, as RoHS compliance is only as good as the weakest link in the supply chain. A mobile phone manufacturer, for instance, needs to ensure that every one of its suppliers - which can number hundreds - are providing RoHS compliant components and materials. Recent evidence suggests that manufacturers are experiencing problems getting smaller suppliers to respond with confirmation of compliance. Without this confirmation, the whole supply chain breaks down.

Manufacturers need to set up scaleable systems now that can handle the potentially huge amount of data needed to prove compliance. This is an issue that will not go away and is likely to grow in size as all manufacturers will invariably need to meet the highest environmental standards.

Further afield in the United States there are already moves to enlarge the list of restricted materials, which can only set the global bar higher for manufacturers wishing to sell in the US. In the final analysis, electronics is a global market and any manufacturer wanting a place at the top table will need to meet the highest, not lowest, environmental standards to remain global.

Therefore, manufacturing engineers need to act now if they are to make sense of the RoHS directive and turn a potential crisis into competitive advantage. Without traceable data that includes part numbers for all suppliers' parts and their current status on RoHS compliance, the issue of changeover come July 2006 could become a disaster for many businesses.

Without forward planning and careful systems control, engineers could be faced with huge stocks of non-compliant components next summer, which will need to be written off.

Unlike WEEE, companies can't simply pay their way to get round the RoHS directive. The name of the game is: comply or die. Manufacturers who are not already working on compliance may get a rude awakening next summer when they lose contracts to compliant competitors.

About Exel Packaging Datastore

  • Exel is the global leader in supply chain management, providing customer-focused solutions to a wide range of manufacturing, retail and consumer industries. Exel's comprehensive range of logistics solutions encompasses the entire supply chain from design and consulting through freight forwarding, warehousing and distribution services to integrated information management and e-commerce support. This also includes the complex and potentially time consuming area of waste regulation compliance.
  • The Packaging Datastore service helps companies to comply with the increasing burden of environmental legislation via its unrivalled packaging weight database of some 3.5 million products. This, coupled with Exel's understanding of current and planned environmental legislation, allows retailers and wholesalers to achieve compliance with all packaging waste regulations.
  • Exel provides a range of innovative products to ensure that businesses fulfill their environmental obligations with regard to the WEEE (waste electrical & electronic equipment) and ROHS (restriction of certain hazardous substances in electronic equipment) directives.
  • Exel, a UK listed, FTSE 100 company, with a turnover of £6.7 billion, employs over 109,000 people in 2,050 locations in more than 120 countries worldwide. Exel's customers include over 75% of the world's largest, quoted non-financial companies.
  • More information is available at EXEL

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