Environmental Compliance, Risk and Product Stewardship
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Join regulatory expert representatives of the industry-recognized EIATRACK service on this one-hour briefing where speakers will share best practices in product stewardship as well as provide an ...

Join regulatory expert representatives of the industry-recognized EIATRACK service on this one-hour briefing where speakers will share best practices in product stewardship as well as provide an update on key legal developments expected in 2011.

Original event date: 3-30-11

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Environmental Compliance, Risk and Product Stewardship Presentation Transcript

  • 1. ENVIRONMENTAL COMPLIANCE,RISK AND PRODUCT STEWARDSHIP HOW TO STAY ON TOP OF CONFLICT MINERALS, REACH, PRODUCT TAKE BACK, AND OTHER EMERGING GLOBAL ISSUES W e d n e s d a y, M a r c h 3 0 , 2 0 1 1
  • 2. We want your feedback! Win prizes for completing today’s webinar survey At the end of today’s webinar… Everyone who completes the survey at the conclusion of today’s live event will be entered into a drawing for to win an iPad AND the first 25 survey respondents will receive a $10 Amazon gift card!Copyright © 2011 IHS Inc. All Rights Reserved. *This offer is valid until March 31st, 2011. 2
  • 3. Meet the SpeakersPaul E. HagenPrincipleBeveridge & Diamond, P.C.Scott WilsonContent Solution StrategistIHS
  • 4. Environmental Compliance, Risk and Product Stewardship March 30, 2011 Paul E. Hagen Beveridge & Diamond, P.C. (202) 789-6022 phagen@bdlaw.com www.bdlaw.com The purpose of this presentation is to provide you with current information on product law policy and regulatory developments. It is not intended as, nor is it a substitute for, legal advice. You should consult with legal counsel for advice specific to your circumstances.
  • 5. Overview• Product-Focused Environmental Requirements and Trends• Conflict Minerals and Sourcing• Ensuring Compliance and Market Access• Expanding Extended Producer Responsibility (EPR) Mandates• Tracking New Requirements 5
  • 6. Product-Focused Environmental Regulations: Overview• New generation of environmental laws aimed at products rather than ―end-of- pipe‖ pollution – New product design mandates – Substance restrictions – Energy efficiency – Take-back mandates• Emerging sourcing/CSR legislation• Keeping pace with new and evolving requirements in multiple jurisdictions• Identifying and managing risks 6
  • 7. Expanding Regulation Throughout Product Life-CycleRaw Market Manufacture Distribution AccessMaterials and Design / LogisticsSourcing Conflict Material Dangerous RoHS, Energy Efficiency, Minerals Restrictions, Goods Rules Safety Standards, Energy Efficiency, Packaging / Chemical Notifications Supply Chain Labeling Collection, Reuse, Recycling Take-back Laws, Export 7 Bans, Basel Convention
  • 8. Key Drivers of Product-Focused Environmental Requirements• Governments • RoHS, REACH, Material Bans, GHS, Green Chemistry• NGOs • Greenpeace ―Scorecard‖ and the ―SIN List‖• Retailers • TESCO - Carbon Labeling• Customers • Green Awareness and Preferences Increasing • Environmentally Preferable Government Procurement (e.g., EPEAT) 8
  • 9. Materials Sourcing Requirements• New focus on materials sourcing – Conflict minerals – Timber and plant products – Conservation concerns (e.g., Palm oil in Indonesia, proposed Pebble Mine)• New supply chain management challenges and public expectations 9
  • 10. “Conflict Minerals” Law• Dodd-Frank Act, section 1502• SEC to promulgate regulations requiring annual reporting for manufacturers if – ―conflict minerals‖ (or metals derived from them) – are necessary for functionality or production of product• Not a prohibition, but disclosure and transparency in supply chain 10
  • 11. U.S. Conflict Minerals Legislation• Concern: Funds from mining of certain minerals providing financial support to conflict in Democratic Republic of Congo• Goal: Use market power of downstream users to limit financing for conflict through supply chain transparency and disclosures• New U.S. law: Section 1502 of the Dodd-Frank Act imposes reporting requirements on SEC-reporting companies that make products containing certain minerals, if they are necessary for functionality or production of products – Columbite-tantalite: Tantulum – Cassiterite: Tin – Wolframite: Tungsten – Gold• SEC to promulgate rules by April 15, 2011, although delay is possible following an extended comment period 11
  • 12. Conflict Minerals - Requirements1 2 If Yes or Cannot Tell, 3Annual SEC Disclosure Report / Identify: Other Key Provisions: • Description of measures to exercise due diligence on source and chain of custody of minerals • Reports audited by Determine whether • Any products that are independent auditor products contain not ―DRC conflict free‖ ―conflict minerals‖ (i.e., products that • Audit must be produced in DRC or contain minerals that certified adjoining countries finance or benefit armed • Report posted on groups) company website Reasonable country of • Facilities used to • Option: label origin inquiry process conflict minerals products ―DRC Conflict (i.e., smelter) Free‖ • Country of origin • Information on efforts to determine mine of origin 12
  • 13. Supply Chain Example Product production Connector production PCB production Gold bonding Gold platingSolder paste solutionproduction wire production production Tin refining Gold refining Tin mining Gold mining Gold recycling 13
  • 14. Implications• Minimum due diligence standards still unclear, but: – Will require assessment of products that contain conflict minerals, and engagement with suppliers – Will generally require traceability to ―approved‖ smelters that use audited/certified supply chains – Industry-wide efforts (EICC and ITRI) to adopt sectoral standards for smelter validation – OECD Due Diligence Guidance• Labeling, marketing and competitive differentiation: – Companies can label products ―DRC conflict free‖ – Customers likely to demand ―DRC conflict free‖ products – Government procurement – California• Companies must disclose/report on first fiscal year after promulgation of rules 14
  • 15. RoHS and Substance Restrictions• Concern among governments, NGOs, and public re hazardous substances in products• Proliferation of substance restriction requirements for electronics, toys and other products (e.g., mercury-containing products)• Emerging Green Chemistry Initiatives• Rapid, global expansion of requirements presents market access and supply chain challenges• New international initiatives: SAICM and Mercury Convention 15
  • 16. EU RoHS Directive• Imposes concentration limits on 6 substances in wide range of electronic products – Mercury, 0.1% – Lead, 0.1% – Cadmium, 0.01% – Hexavalent chromium, 0.1% – Two types of Brominated Flame Retardants (BFRs), 0.1%• Very influential – directly incorporated into many non-EU legal regimes, and clearly the model for many others• Exemptions by product application• Exclusions based on scope, e.g. – Batteries (but see EU Batteries Directive) – Spare parts (for pre-July 1, 2006 equipment) 16
  • 17. EU RoHS II• RoHS Recast agreed – Approved by Parliament Nov. 2010 – Council expected to approve in 2011 – Binding when transposed by Member States, by late-2012• Recast will not expand the list of restricted substances• But will streamline process for future amendments• Monitoring & control instruments, medical devices and cables in scope• New open scope covers all EEE unless specifically exempted• New mandatory disclosure obligations will require ―immediate‖ reporting of non-compliant EEE• New CE-marking requirements for manufacturers• Not superseded by REACH: must be ―coherent‖ 17
  • 18. RoHS Worldwide 18
  • 19. US RoHS Laws• RoHS in government procurement standards – Federal EPEAT – NYC Procurement Standards• State RoHS Legislation – California RoHS – New Jersey RoHS – Various RoHS reporting requirements• State-level substance-specific restrictions 19
  • 20. U.S. State-Level Materials Restrictions – Total Enacted Laws14012010080604020 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010/2011 Source: EIATRACK (http://www.eiatrack.org/p/416) 20
  • 21. Comprehensive Mercury Legislation 21
  • 22. BFR Restrictions 22
  • 23. Toxics in Packaging 23
  • 24. Batteries Restrictions 24
  • 25. DOT Rulemaking on Transport of Lithium Batteries• U.S. DOT engaged in rulemaking that is likely to impose substantial new requirements on transport of lithium batteries, especially by air (including if shipped in products)• Draft final rule now at OMB for review – Final rule expected soon for part of proposal (bringing rule in line with international standards) – New proposed rule will re-propose controversial issues (e.g., dropping exemptions for small batteries) 25
  • 26. EU REACH Regulation• Regulation on Registration, Evaluation, Authorisation and Restriction of Chemicals• Not just chemicals: has implications for electronics importers: – Registration of substances if >1 tpy and intended for release – Notification of substances of very high concern (―SVHCs‖) in articles, if >1 tpy, and >0.1% (6 months after SVHC listing, beginning June 1, 2011)• Electronics ―suppliers‖ (includes retailers) must communicate to recipients (other than consumers) regarding SVHCs in articles, if >0.1%, effective upon listing – Must include name of substance and info on safe use when provide the article – Must provide info to consumers within 45 days of request• Authorization requirements for certain high-risk substances• Effect is to broaden supply chain management requirements beyond RoHS, because companies need content and concentration information for broad range of substances• Currently 46 SVHCs, 15 of which have been recommended for authorisation, including several in electronics (4 phthalates, HBCD, diarsenic trioxide & pentaoxide, short-chain chlorinated paraffins, and tributyltin oxide) 26
  • 27. END-OF-LIFE ANDPRODUCT TAKE-BACK ISSUES 27
  • 28. Product Take-Back• European Union – EU Directive 2002/96/EC on Waste Electrical and Electronic Equipment (WEEE) (recast currently underway)• United States – 24 distinct state laws• Canada – Provincial laws create take-back obligations – No mandatory federal law• Latin America – Rapidly expanding federal, state, or municipal laws• Asia / Pacific – China (China WEEE) – South Korea (Resource Recycling Act) – India (Draft E-Waste (Management and Handling) Rules 2010) 28
  • 29. Product Take-Back• Targeted Products – Batteries – Waste Electrical and Electronic Products (WEEE)• Common Elements – Condition for sale of new products – Registration (manufacturers, collectors, recyclers) – Administrative and/or implementation fees – Labeling and consumer information – Collection programs – Performance requirements & reporting 29
  • 30. U.S. State E-Waste Legislation 30
  • 31. Key Elements of EPR in Latin America• E-Waste Focus, Increasing to WEEE• Manufacturer/Importer Responsibility• Limited Government/Distributor Role• Management Plans (Permit)• Consortia/Individual Entity• Hazardous Waste Presumption• Registration/Certification Requirements• Free of Charge to Consumer• Take-Back Quotas• Waste Minimization/DfE 31
  • 32. EPR in Latin America, Enacted• Brazil – National Solid Waste Policy (Aug. 2010): framework law, establishes ―reverse logistics‖ requirements – National Solid Waste Policy Regulation (Dec. 2010): establishes rulemaking process – CONAMA Draft WEEE Resolution: status unclear• Colombia – 3 Producer Take-back Resolutions (July/Aug. 2010): Batteries, Computers & Fluorescent Lamps: take-back quotas• Costa Rica – E-Waste Management Regulation (May 2010): comprehensive producer take- back program – National Solid Waste Law (July 2010): proposed hazardous waste regulation potentially overlaps with e-waste regulation• Mexico – General Waste Law (2003) and Regulation (2006): framework for take-back of special management wastes, including some e-wastes – Pending regulations on management of hazardous and special management wastes, expected in 2011 32
  • 33. EPR in Latin America, Pending• Argentina – Several proposed WEEE-RoHS bills on national & provincial levels• Chile – National Waste Bill in draft from includes e-waste take-back• Ecuador – Hazardous waste regulation proposed in 2009 included some e- wastes; little progress in 2010• Peru – E-waste regulation, with producer take-back, proposed Feb. 2011• Venezuela – National Solid Waste Management Law (Dec. 2010): framework law, includes e-waste take-back; regulation due by Dec. 2011 33
  • 34. Latin America – E-Waste Take- Back Initiatives 34
  • 35. EPR in Latin America: Conclusions• E-waste take-back here to stay• Dynamic regulatory atmosphere• Key final (or near final) initiatives – Brazil, Colombia, Costa Rica, Mexico• Key pending initiatives, possible advance this year – Argentina, Chile, Ecuador, Peru, Venezuela• Infrastructure key regulatory compliance barrier• Export logistics can be challenging• Allow significant lead time for compliance 35
  • 36. Compliance Challenges• Challenges in Tracking & Managing Disparate Programs: – Where are there laws? – What products are covered? • WEEE, Computers, Monitors (> 9‖ or > 4‖ in size), Televisions, Printers . . . – How does the program work? • Manufacturer-operated? Shared Responsibility? Advance Recovery? • What level of collection is required? – When are requirements ―due‖? • Each law operates on its own timeline - effective date, registration, fees, reporting, program year – Who must the recovery program serve? • Consumers, businesses, non-profits, school districts – Additional Requirements? • RoHS-like provisions • Responsible Recycling Provisions 36
  • 37. Exports of Used and EOL Products• Basel Convention parties moving to classify more used/end-of-life products as hazardous wastes• Draft technical guidelines on electrical and electronic waste to be considered at COP-10• Increased logistical challenges, trade bans and compliance costs for managing used and end-of-life electrical and electronic equipment world-wide 37
  • 38. New E-Waste Guidelines• Draft Technical Guidelines on Transboundary Movement of Used Electronic and Electrical Equipment and E- waste, in Particular Regarding the Distinction Between Waste and Non-waste Under the Basel Convention (comments due June 30, 2011)• Draft PACE Overall Guidance Document on Environmentally Sound Management of Used and End- of-Life Computing Equipment (forthcoming) 38
  • 39. Refurbishment, Reuse, Warranty Returns• Parties to the Basel Convention are deciding whether exports of used electrical and electronic equipment for repair, refurbishment and reuse are products or wastes – Wastes subject to control and trade bans? – Used products outside Basel? – Warranty returns, refurbishment, off-lease equipment?• Risk of new export bans on shipments for legitimate repair and refurbishment from the U.S. and EU to non-OECD 39
  • 40. Risk Mitigation: Regulatory Tracking• EIATRACK http://www.eiatrack.org/ – Web-based regulatory tracking tool – Directed by leading electronics manufacturers – Product-related environmental measures in key markets world-wide• Facilitates communications and compliance: – Internal teams (global, regional, country, product) – Trade and business working groups – Technical consultants and legal counsel 40
  • 41. Beveridge & Diamond, P.C.• Largest firm focused primarily on environmental law and litigation• Longstanding product stewardship practice• Counsel to leading IT companies and trade associations• Global network of local environmental counsel• More at www.bdlaw.com 41
  • 42. Scott WilsonContent Solution StrategistMarch 2011 Copyright © 2011 IHS Inc. All Rights Reserved. 42
  • 43. About IHS Inc. A Leading Information Provider • Founded in 1959, IHS is a leading source of information and expert analysis in pivotal areas shaping today’s global businesses • Employs 4,400 colleagues in 30 countries who speak 50 different languages • IHS customers include nearly 70% of the US Fortune1000 and 80% of the Global Fortune 500 • Tens of thousands of customers and hundreds of thousands of end-users in over 100 countries • Public (2005) NYSE: IHS • FY10 revenue $ 1,075 millionCopyright © 2011 IHS Inc. All Rights Reserved. 43
  • 44. Compliance needs are Explicit and Implicita disruptive shift in the market changes supply chain behaviors Explicit Needs •Demonstrate Sustainability •Comply with RegulationsExplicitRequirements •Prove Ethical Supply Chain Management •Meet Contract Obligations Customer Requirements •Design and Redesign the Supply Chain e.g. Regulations  Standards  PartsImplicit Needs e.g. EU ROHS  IPC  IPC 175x Indirect Materials, Counterfeits Obsolescence •Navigate Constrained SupplyImplicit MRO and Chemicals Management ManagementRequirements •Mitigate Obsolete Part & Manufacturing •Manage Rising Price & Lead Times Semiconductors and Standards & Design Methods •Avoid Counterfeit Parts Components RegulationsCopyright © 2011 IHS Inc. All Rights Reserved. 44
  • 45. Example: Japan scenarios addressed by IHS What are the supply chain impacts of the Japan earthquake? Client Scenario(s) : “How will this impact my supply chain?” What are my regulatory obligations and Conflict Minerals Origin: Conflict-free tantalum. exposure to U.S. or California conflict minerals positions? Supply Flow: Tantalum capacitors, have already Which commodities do I use that rely on been in short supply now for over 12 months.Explicit: Conflict tantalum, gold, tin, or tungsten? WhatMinerals Tracking products do I use these in? Impact and Implications of Global Production: • Global Reaction to Crisis will See Panic Buying Where are my raw materials, Creating Shortage and Pricing Issues manufacturers, and suppliers located? Was • Rolling Power Outages and Logistical Issues any Japan production ceased or Expected for the Next Several Weeks compromised? • Production Disruption of Critical Materials such as Poly Silicon, Photo Resists & Resins What shortages should I expect? Will price • Components Impacted Include and lead time increase? Should I buy parts I NAND need immediately to mitigate risk? DRAM Standard Logic If needed, where can I locate and secure Filters alternate sources of these parts? Should I Inductors redesign my product? High-Value and High-End Aluminum and What parts will be discontinued by Ceramic Capacitors manufacturers? Have any been discontinued MOSFETs already? Which ones? Likely Rise in Counterfeit Part Activity: How do I avoid counterfeits? Do I have any Just prior to Japan quake, the senate launched today that I don’t know of? What specific congressional investigation counterfeit parts risk. lots of parts are counterfeit? Among reasons, a 2010 study by the Commerce Department found the problem of counterfeit parts If a highly constrained supply chain touched nearly 40% of the DoDs parts supplyImplicit: Risk of persists – or parts were discontinued – what chain, and was getting worse.Counterfeit Parts safer open market part sources exist? Copyright © 2011 IHS Inc. All Rights Reserved. 45
  • 46. We’ll Show You: Free Offer for Attending Today Must email ProductMarketing@IHS.com or our exit survey to qualify. Client Scenario(s) : “How will this impact my supply chain?” What are my regulatory obligations and Conflict Minerals Origin: Conflict-free tantalum. exposure to U.S. or California conflict minerals positions? Supply Flow: Tantalum capacitors, have already Which commodities do I use that rely on been in short supply now for over 12 months.Explicit: Conflict tantalum, gold, tin, or tungsten? WhatMinerals Tracking products do I use these in? Impact and Implications of Global Production: •Global Reaction to Crisis will See Panic Buying Where are my raw materials, Creating Shortage and Pricing Issues manufacturers, and suppliers located? Was •Rolling EXPLICIT: FREE ACCESS TO Power Outages and Logistical Issues any Japan production ceased or IHS EIATRACK REGULATORY for the Next Several Weeks Expected compromised? TRACKING SOLUTION. •Production Disruption of Critical Materials such as Poly Silicon, Photo Resists & Resins What shortages should I expect? Will price •Components Impacted Include and lead time increase? Should I buy parts I NAND need immediately to mitigate risk? DRAM Standard Logic If needed, where can I locate and secure Filters alternate sources of these parts? Should I Inductors redesign my product? High-Value and High-End Aluminum and What parts will be discontinued by Ceramic Capacitors IMPLICIT: FREE ANALYSIS OF manufacturers? Have any been discontinued MOSFETs already? Which ones? ELECTRONICS FOR EXISTING COUNTERFEIT RISK. Likely Rise in Counterfeit Part Activity: How do I avoid counterfeits? Do I have any Just prior to Japan quake, the senate launched today that I don’t know of? What specific congressional investigation counterfeit parts risk. lots of parts are counterfeit? Among reasons, a 2010 study by the Commerce Department found the problem of counterfeit parts If a highly constrained supply chain touched nearly 40% of the DoDs parts supplyImplicit: Risk of persists – or parts were discontinued – what chain, and was getting worse.Counterfeit Parts safer open market part sources exist? Copyright © 2011 IHS Inc. All Rights Reserved. 46
  • 47. Dynamic Nature of Extended Supply Chains Your supply chain operates in the dynamic context of external forces…Regulations: Part Trends Product Trends: Application Markets• RoHS • Technology • Technology Unique Trends & Pressures• WEEE • Demand • Features • A&D• REACH • Supply • Cost • Consumer• Conflict • Obsolescence • Energy Efficiency • Medical Dev. Minerals • PCNs • Competitive • Telecom Material Component Mfrs. Demand Product Mfrs. End Users Mfrs. (OEMs and EMS) Supply Materials Products ComponentsProduct Stewardship and Economy Supply CostsExtended Producer • Market volatility • Natural Disasters • SupplyResponsibilities • Product demand • Raw Materials • Energy and Shipping costs • Regulated Materials Dynamic Context Copyright © 2011 IHS Inc. All Rights Reserved. 47
  • 48. Electronics Example: EU RoHS TransitionContinuity of product lifecycles, supply chains, and markets Product Lifecycle Stages Maturity Decline Growth Phase-Out Introduction Obsolete The Supply Chain Problem Optimizing supply to meet demand. Business Pressures Influencing Products Products Drivers of innovation and lifecycle decisions. Parts/MaterialsCopyright © 2010 IHS Inc. All Rights Reserved. 48
  • 49. RoHS Transition Forced Lifecycle Changes2M+ new parts, major part changes, and over 20% of EOL in ‘06-07 End of Life (EOL) Specific to RoHS/Pb-free Environmental Compliance EOL Transition to RoHS 2003 2004 2005 2006 2007 2008 2009 Product Change Notices (PCN) Specific to RoHS/Pb-free Environmental Compliance PCN 2003 2004 2005 2006 2007 2008 2009 New Product Introductions (NPI) Specific to RoHS/Pb-free Environmental Compliance NPI 2003 2004 2005 2006 2007 2008 2009 RoHS in Force July 1, 2006Copyright © 2010 IHS Inc. All Rights Reserved. 49
  • 50. The Ripple Effect of RoHS was CostlyRipple effect of product trimming to shortages and counterfeits…Ripple Effect Economic downturn… …shortage… …fake parts… … RoHS compliance …mission failure!As Shown By Key Performance Indicators (KPI) Product Lifecycle Planning, KPI: Increase in EOL, KPI: Rise in KPI: Rise in Counterfeit Predict Obsolescence Indicate Shortages Price/Lead Time Incidents End of Life (EOL) Specific to RoHS/Pb-free Environmental Compliance Maturity Decline Growth Phase-Out Introduction Obsolete 2003 2004 2005 2006 2007 2008 2009Copyright © 2011 IHS Inc. All Rights Reserved. 50
  • 51. EU REACH is Expected to be MORE CostlyEuropean Commission roadmap includes 106 priority SVHC by 2012 “Airbus UK’s director of operations and compliance, said the cost of REACH had been evaluated at several million Euro over three years, with provisions up to hundreds of millions of Euro over five years”… “…[He] said there is a level of ambiguity because it will depend ‘on the substances that will finally be added to the candidate list and in Annex XIV’. Airbus UK has set its 2009 REACH budget at some EUR12 million.” Source: “EU and industry REACH different conclusions”, Jane’s, September 2009Copyright © 2011 IHS Inc. All Rights Reserved. 51
  • 52. Explicit: Fines for REACH non-complianceby country and type (administrative vs. criminal)Copyright © 2011 IHS Inc. All Rights Reserved. 52
  • 53. Implicit: REACH supply implications felt alreadyMaterializing within manufacturer EOL decisions Gross EOL by MONTH 2008 Gross EOL by YEAR ENDING 2004 - 2009 EOL by MFR due solely to EU REACH SVHC 619 demand/sales forecast. Lehman files Published Chapter 11 206 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2004 2005 2006 2007 2008 2009Economic Recession and Chemical Restrictions:The two most dominant factors in the 300% increase of End of Life (EOL) for electrical components exiting 2008. Source: IHS Component Insight, 2010 Copyright © 2011 IHS Inc. All Rights Reserved. 53
  • 54. But… This goes way beyond RoHS & REACHDisruptive ripple effect throughout global supply and demand balance Bisphenol-A “BPA Free” China RoHS Customer RFP Full Material Disclosure EU RoHS Recast Energy Priority Declarable Substances List (ASD PDSL) Toxic Substances Control Act (TSCA) Waste Greenpeace Health Canada / Canada’s Chemical SIN List - Substitute It Now! Management Plan EU REACH & SVHC Security US California Proposition 65Hazardous ISO 14064 GHG Standards DEHP-Free Norway PoHS UN Stockholm Persistent Substances Organic Pollutants (POPS) Air Safety Argentina RoHS Product Content Disclosure EU RoHS and WEEE Thailand’s ―RoHS‖ EU Battery Directive Directives Japan Green ENERGY STAR Carbon Disclosure Project (CDP) Volatile Organic Compounds US FDA Electronic Product Environmental Natural Resources Regional Greenhouse Gas Initiative (RGGI) Assessment Tool (EPEAT) Health PCF - Product Carbon Footprint Conflict Minerals Water Lifecycle Assessment (LCA) EU Medical Device Directive Environmentally Preferred Products (EPP) US EPA Executive OrdersCopyright © 2011 IHS Inc. All Rights Reserved. 54
  • 55. Product Implications: Redesign & Innovation Supply Chain, Lifecycle, Engineering, Sales, Operations REACH REACH REACH SVHC Reporting Starts Phase 1 Reg. Deadline Phase 2 Reg. DeadlineRoHS DirectiveRequirements Start RoHS REACH Pre-Registration Recast 2006 2007 2008 2009 2010 2011 2012 2013 Past Today Future Existing Product Future Product Portfolio Portfolio Analysis of existing portfolio products with respect Design / Redesign with respect to to: • Environmental Compliance • Environmental Compliance • Supply Chain • Supply Chain • Product Sustainability • Product Sustainability • Brand • Social Responsibility • Inventory optimization (avoid E&O) • Risk Avoidance and Management Copyright © 2011 IHS Inc. All Rights Reserved. 55
  • 56. What to do: Regulations Tracking with EIATRACKCurrency and P-D-C-A change management are essential • What regulations affect your products? • Proposed, pending, enacted legislation? • Challenge: • What regulations must your products comply with? • What are your state’s take-back requirements?Copyright © 2011 IHS Inc. All Rights Reserved. 56
  • 57. What to do: Mitigate Risk—Parts and MaterialsContent Sourcing or Assessment of parts and materials PLM, BOM Product Mgmt., Info Sync, Mfr. Compliance Internal Mfr. Trending DB Mgmt. Database Corp Parts Processing XRF and Clarifications Reference Databases (3rd Party and Incoming Consortiums) Inspection Internal or 3rd Party www.url.com Direct Mfr. Sourcing Web Sites Part Mfr. Internal or 3rd Party Sourcing Parts Lists Information Flows Physical FlowsCopyright © 2011 IHS Inc. All Rights Reserved. 57
  • 58. What to do: Mitigate Obsolescence and Design Risk Track and manage risk due to material composition changes, EOL Notices IHS® PCNalert Summary Index for Mar 29, 2011 ( 9 Notices ) Countdown FromManufacturer Alert Type Affected Parts DocumentID Action Date Mar 29, 2011 (days) PCN -AssemblyVishay Dale PCN-DR-003-2011 Process Product 40 Sep 04, 2011 159Electronics Rev 0 FamiliesDescription1) Resistive Ink Material obsolescence: Replace Dibutyl Phthalate with Dibutyl Sebacate as the solvent; and replace Antimonywith Titanium as the TC modifier. 2) Dielectric Glass material change: Continuous Improvements for improved acid-resistance.REASON FOR CHANGE:1) Resistive Ink Material obsolescence driven by RoHS and SVHC initiatives. 2) ContinuousImprovement on the dielectric glass (passivation over the resistive layer) for increased acid-resistance during plating.International Suspected 1 20110321-01 ,Rectifier Corporation Counterfeit NoticeDescriptionIHS & ERAI would like to inform you of reported substandard or suspected counterfeit part activity in the market concerningthe part. PCN - Molding OtherEPCOS 48 110315IN1e Jul 31, 2011 124 RoHS/WEEE CompliancesDescriptionDiscontinuation of present molding material in yellow color announced by the material supplier. Switch over to new, black moldingmaterial to ensure continuous supply of products to customers. New molding material has halogen content level below 900ppm and black color. Copyright © 2011 IHS Inc. All Rights Reserved. 58
  • 59. What to do: Mitigate and Avoid Counterfeit RiskTrack and Manage Counterfeit Part RiskCopyright © 2011 IHS Inc. All Rights Reserved. 59
  • 60. What to do: Electronics ComplianceSteps to take to mitigate implicit and explicit risk • Regulations Tracking with EIATRACK Track Regulations Currency and P-D-C-A change management are essential Mitigate Compliance • Mitigate Risk of Non-Compliance —Commercial Off the Shelf (COTS) Parts Risk for COTS Parts Information Sourcing Mitigate Compliance • Mitigate Risk of Non-Compliance—Custom Mechanical Parts Risk for Custom Parts Internal Specification; Industry Standard or Branded Sourcing Mitigate Obsolescence • Mitigate Obsolescence and Design Risk Track and manage risk due to material composition changes, & Design Risk EOL Notices • Mitigate and Avoid Counterfeit Risk Avoid Counterfeits Track and Manage Counterfeit Part RiskCopyright © 2011 IHS Inc. All Rights Reserved. 60
  • 61. In Summary: Manage Explicit and ImplicitIt is critical • What is industry’s role in this? • ―We must all hang together, or assuredly we shall all hang separately‖ • —Benjamin Franklin • Why the supply chain? • ―Ninety percent of leadership is the ability to communicate something people want‖ —Dianne Feinstein Well-known public quotes referenced to reinforce themes in this presentation. They should not be construed as agreement or endorsement. Copyright © 2011 IHS Inc. All Rights Reserved. 61
  • 62. We want your feedback! Win prizes for completing today’s webcast survey Everyone who completes the survey will be entered into a drawing for to win an iPad Sign-up for free offer… Sign-up via the survey or send email to ProductMarketing@ihs.com with ―Webinar Offer‖ in the subject line • 30 day subscription to EIATrack • Counterfeit Risk Assessment for your partsCopyright © 2011 IHS Inc. All Rights Reserved. 62
  • 63. Questions & AnswersPaul E. HagenPrincipleBeveridge & Diamond, P.C.Scott WilsonContent Solution StrategistIHS
  • 64. For More InformationSend questions and requests for information to: Webcasts@ihs.com