No matter which industry a company is in, it and its products will be required to be compliant with regulations or customer prescribed requirements (codes of conduct, specifications, etc). In the past those requirements mainly targeted a company’s business processes, assets (e.g. plants) and financials. Lately, as the result of the highly distributed nature of the manufacturing and design chains of companies, more and more requirements are tied to the product a company sells (integrated product policy) in order to force a company to manage compliance within its product network.
It is not just about designing compliant products anymore. For more and more companies it is also about designing green products: products that help a company meet its environmental goals whether it is in being more eco-efficient, being perceived as an eco-innovator or whether it is to improve a product, a business reputation or brand. Agile PLM and Agile PG&C in particular can help a company to achieve these goals. From now on when we talk about compliance we mean: meeting a set of requirements that either because of regulations, because of internal company policies and objectives, or because of customer requirements.
As a result of compliance requirements companies are confronted with the following business challenges: Design for compliance: products need to be developed with compliance goals in mind (ease or disassembly and recyclability, energy consumption, presence of hazardous substances. Compliance is designed in into a product. Changes at later stages of the product development cycle to accommodate for compliance lead to slipped schedules, expensive rework and extra costs. Component compliance: compliant products cannot be designed without the knowledge of the compliance status of components and raw materials that make up the product. This requires companies to gather data in the form of data sheets, from component databases or through material declarations from suppliers. This data needs to be validates and a components’ or material’s compliance is then assessed for the purpose required by the company. Product compliance: 2 instances of the same product are never the same. A product can have many variants, or contain different components and materials from different manufacturers and suppliers. All these combinations need to be compliant before a product is truly compliant. Products can require the use of exemptions instead of being truly compliant. This introduces risk since exemptions typically have an expiration date or customers may not allow the use of exemptions. Product network compliance: In order to assess component or product compliance, data is required from suppliers in the product network sometimes multiple tiers removed from and unknown to the company. It is therefore important to communicate a company’s policy and requirements throughout this network through requests for declarations of conformance and to store these signed statements. This also allows a company to assess the capabilities of its product network to be compliant with its requirements. Compliance reporting: Customers and authorities will require a company to produce evidence of due diligence in terms of data gathering, data management, compliance assessment and non-compliance handling. On top of that, they will require a company to have documented business processes for each of these.
The message of this slide is: Compliance as a fire-drill exercise in Excel or stand-alone databases was okay for one legislation but is not sustainable in the current environment of many continuously changing regulations. Compliance needs to be baked into the product development processes. Companies need to develop a compliance strategy (choose where they fit on the compliance axis in the picture) as well as a compliance roadmap and keep revising these as regulations change.
Oracle Agile Product Governance and Compliance (PG&C) is a tool to that enables design for the environment and design for compliance, in particular substance based compliance such as required by legislations such as RoHS and REACH. To achieve this, PG&C supports a closed loop compliance corrective action business process as depicted in the next picture. A new design for a product or a component is introduced and requires to be validated for compliance. Different types of compliance require information at different levels within a BOM: some require information at the component level (or even the homogeneous material level within a component), some require information at the assembly or product level and some (e.g. corporate social responsibility) require information at a supply chain level. If that information already resides in PG&C it will be reused. PG&C can also massage data to distill more information out of data the you already have. E.g. if you receive a full or close to full material disclosure and want to evaluate compliance with a new substance that was not explicitly declared in the original declaration, then the system will evaluate that previous declaration and try to distill information about the new substance. In the full material disclosure case, that new substance would be absent. In a nearly fully disclosed declaration, the new substance could be hiding in the undisclosed portion and the system will assume it is equal to the undisclosed portion. If the information does not reside in PG&C then the system can receive information from data content providers or from other tools such as supplier portals or lifecycle analysis systems or from measurement systems through integration with those tools or services. PG&C also has built in supplier declaration management in case you want to have suppliers log into the tool directly and submit their declarations either in the UI, via Excel spreadsheet or via industry standard formats such as IPC 1752 or JGPSSI. Of course, users could perform these functions for a supplier in case you don’t want a supplier to directly access the tool. Declarations go through a customer configurable workflow that cleanses the data to match your naming scheme for substances through aliasing, validates the information for completeness (e.g. fully disclosed or not) and for end user acceptance before the system can officially use that information for compliance validation. This workflow capability can include sign off requirements. Once information is received, PG&C will use that information to assess compliance with customer configurable specifications containing threshold values and allowable exemptions. The built in compliance roll-ups (worst or best case across multiple declarations for the same part, worst or best case across the approved manufacturer lists a part belongs to and worst case in all the Bills of Materials and revs) will further roll up the information to assess the compliance status of all the BOMs and revs in the stored within the system. Queries and built in reports help a user to identify issues with BOMs and parts in the system so a compliance manager or quality manager can react and issue corrective actions (manage by exception) for instance via e-mail or via the Agile PQM module or using the normal quality processes you already have in place. Using these notifications engineers can use configurable and customizable design for x tools in PG&C to help them to identify root causes or perform what if analysis to improve upon their designs. Sourcing professionals could use those notifications to disqualify a part and search for a replacement etc. The engineers propose the necessary changes via Agile Product Collaboration, version or revision the design and submit it back to PG&C for final validation before releasing the design. Any time products change, customer requirements change, legislations change or your supply chain changes will you have to make an assessment of the impact on compliance. Oracle Agile Product Governance & Compliance can help with that. Since the system has built in history tracking, you will at any point in time be able to find out who or what provided the information, who accessed the information, who signed off on the information and how long the process took. This ensures a high level of due diligence. PG&C comes with an extensive set of out-of-the box queries and reporting. The tool has built in support for end users to create new queries and reports and has an extensive set of APIs and web services to help you integrate the tool in other systems.
In orange are WEEE and RoHS like legislations around the world. WEEE and RoHS are like an oil spill spilling over to the rest of the world. In red are new energy consumption regulations. Energy consumed by electronics in stand by mode or by power supplies in off mode is one of the fastest growing household electricity consumers. The other colors indicate other legislations. The summary message is: Everyone is creating WEEE and RoHS like legislations The EU is already implementing other legislations and everyone anticipates they will spill over to the rest of the world as well. But don’t loose track of existing legislations. They are being revamped as well.
China RoHS distinguishes between electronic information products (EIPs) and EIPs additionally listed in a catalogue. EIPs have labelling and disclosure requirements (green e if none of the 6 RoHS substances is in the product, otherwise the orange symbol regardless of EU exemptions. The 10 in the symbol indicates the environmentally friendly use period. If the orange symbol is used then the bottom table must be generated in Chinese and put in the instruction manual for the recycler. The packaging has its own requirements. For EIPs listed in the catalogue there will be a substance restriction in the future (max concentration values, catalogue itself and certification process are all still TBD).
Very similar to China RoHS, not a ban but a disclosure requirement
An interesting aspect of the EuP directive is that it creates a framework. Within this framework implementing measures can be adapted quickly within the need to create new legislations. The idea is to allow the industry to voluntarily achieve targets (the carrot). If they can’t then an implementing measure can be very quickly adopted with little notice to the industry (the stick).
This is a real customer example of Agile Services (SDO) putting a plan together for a customer to get to a sustainable compliance process.
Some of these logos are highly confidential. Do NOT share file. “ Here are our customers who have purchased PG&C licenses. Some of these customers are live (such as Extreme Networks and Spirent) and some are still in the early phases of deployment, therefore some are referenceable and some aren’t yet.” Approved by Dries D'hooghe 1/18/07. Referenceable Customers on PG&C: Harris Symbol Extreme Networks Spirent Powerwave ViaSat Conexant FreeScale DotHill Other Live Customers: Benchmark QLogic Funai Electric Quantum Quanta Radysis Brocade F5 Networks Have bought and planning to deploy: Dell Herbalife Tellabs Coherent Analogic Flextronics Foxconn Hitachi Verifone Fukuda Denshi Logitech Kyocera AMX Qualcomm Arima Bell Sports
The problem is not fines or criminal charges. The problem is the cost of exclusion from a market (e.g. the entire EU), the cost of stop ships, the cost of returns from your customers and the impact on your brand value.
Why manage compliance in a PLM system: Compliance is designed in in the same way that product costs and quality are fixated during the design phase of a product. The cost of making compliance related changes to a product are the lowest when the product is still virtual and stored in files and data management systems. As soon as a product becomes real (prototyping) the costs and rework related to compliance changes goes up exponentially and can lead to slipped launch schedules. Non-compliances in a shipping product are extremely expensive and can lead to stop ships, rejected shipments, returns, fines and exclusion from a market. The premise of PLM is to increase the product’s profitability by focusing on 1 to 5. Non compliance has the opposite effect. One non-compliance can completely kill the profitability of a product. PLM systems are the ideal systems to manage compliance in: they are the only systems that span all product lifecycle phases; ERP only knows about a product’s definitions when a product is close to production and authoring tools (such as CAD) only manage fragments of the product record.
This next section is optional. If your customer is familiar with the legislations you can skip it. We do not claim that PG&C supports these legislations out of the box. Depending on the unique customer situation, PG&C can be configured and extended (process extensions, custom reports, etc.) to support those legislations. The summary message is that: The pace of new legislations being introduced is speeding up, All legislations focus on the extended producer which corresponds mostly (95% of the cases) to the company whose logo is on the product or on the product packaging in order to deal with complex product networks. And to attach the regulations to the product instead of to a company or a plant (again in order to deal with the complex product networks and changing supply chains).
The fact that there are so many new legislations all focusing on the extended producer means that companies need to focus on the items on the next slide.
Legislation knowledge and interpretation to identify the legislative requirements for an individual company (no one-size-fits-all) based on: The type of products a company produces Structure of a company and its subsidiaries A company’s risk profile Just as what happened to become SOX or ISO compliant IT integration expertise Product compliance requires integration between multiple different systems in your organization at the process and data level. Oracle is uniquely positioned here with its AIA infrastructure. Data aggregation across products, product lines and company level in order to fulfill your reporting requirements Scalable flexible and powerful software Data storage and data management demands for compliance are high Substances content of a part at the homogeneous material level, full material disclosures Manufacturing parameters of a part Operational searching and reporting (substance where used, compliant part selection) Compliance roll-ups across all your parts, BOMs, configurations and revs. Oracle Analytics for aggregation and aggregated reporting Business process connectivity and integration Design for compliance must be tightly connected to the product design process in the PLM system to guard compliance behind the scenes while engineers are designing (pending revs, picking only compliant parts etc) Product compliance is more than just a check box exercise during a rev or product’s release process. Component and material compliance data In order to assess product compliance you need compliance information for parts, materials and
Transcript of "Zws Seminar 20 Minutes"
Oracle Agile Product Governance & Compliance Dries D’hooghe Senior Director of Product Strategy
There is Compliance! <ul><li>The average $500M corporation is subject to 35-40 major regulatory disclosure mandates*. </li></ul><ul><li>Large corporation? Heavily regulated vertical? “We wish we were only subject to 40 regulatory mandates.” </li></ul>FDA Regulations - QSR Environmental Regulations (WEEE) International ISO Standards Audit Compliance Operator Certification Restriction of Hazardous Substances (RoHS) Standard Operating Procedures (SOP) Training Requirements Compliance Reporting Serial Number Traceability Sarbanes / Oxley Design for Six-Sigma End-of-live vehicle (ELV) TREAD act CMII Practices Registration, Evaluation and Authorization of Chemicals (REACH) Eco-design (EuP) *Source: WorldWatch, IDC
And There is Going Green! Enabling the Eco-Advantage Eco-Efficiency Eco-Innovation Eco-Transparency <ul><li>Protect business reputation </li></ul><ul><li>Promote green brand </li></ul><ul><li>Optimize resource utilization </li></ul><ul><li>Minimize carbon footprint </li></ul><ul><li>Design green products </li></ul><ul><li>Implement green processes </li></ul>Opportunity Cost Brand Product Lifecycle Management Strategic Network Opt. Manufacturing Business Intelligence & Sustainability Reporting Transportation Management Asset Lifecycle Management Reverse Logistics Self Service Governance, Risk & Compliance Data Center Management Service Execution Procurement
Business Challenges <ul><li>Design for Compliance/Green </li></ul><ul><ul><li>Design for Environment, Design for Disassembly, Design for Recycling, … </li></ul></ul><ul><li>Evaluating Component Compliance </li></ul><ul><ul><li>Data gathering, data validation and compliance assessment </li></ul></ul><ul><li>Evaluating Product Compliance </li></ul><ul><ul><li>Across variants, approved manufacturers lists and approved suppliers lists </li></ul></ul><ul><ul><li>Risk analysis (exemptions, single sourced, …) </li></ul></ul><ul><li>Evaluating Product Network Compliance </li></ul><ul><ul><li>Material Declarations </li></ul></ul><ul><ul><li>Declarations of Conformance </li></ul></ul><ul><li>Compliance Reporting </li></ul><ul><ul><li>To customers </li></ul></ul><ul><ul><li>To authorities </li></ul></ul>
Agile Product Governance & Compliance <ul><li>Customer Benefits </li></ul><ul><li>Decreases Compliance Costs </li></ul><ul><li>Reduces Business Risk </li></ul><ul><li>Compliance with Environmental & Regulatory Requirements </li></ul><ul><li>Improved Operational Governance </li></ul><ul><li>Capabilities </li></ul><ul><li>Global Environmental Compliance </li></ul><ul><ul><li>Design for Compliance </li></ul></ul><ul><ul><li>Supplier Declarations </li></ul></ul><ul><ul><li>Risk Analysis </li></ul></ul><ul><li>Management of Standards & Regulatory </li></ul><ul><li>Compliance Validation </li></ul>Agile Product Governance & Compliance™ enables organizations to manage product and program compliance against standards and regulatory requirements, providing assurance of effective compliance throughout the product lifecycle.
REACH <ul><li>REACH = R egistration, E valuation and A uthorization of CH emicals </li></ul><ul><li>European Community regulation on chemicals and their safe use (EC 1907/2006) </li></ul><ul><ul><li>Improve the protection of human health and environment through the better and earlier identification of intrinsic properties of chemical substances (e.g., carcinogenic, mutagenic, toxic, bio-accumulative substances) </li></ul></ul><ul><ul><li>Consolidates the EU chemicals laws in one legislation </li></ul></ul><ul><ul><li>Shift of responsibility and costs to the private sector </li></ul></ul><ul><ul><ul><li>Register chemicals properties and safe handling information into central database managed by European Chemicals Agency (ECHA) </li></ul></ul></ul><ul><ul><ul><li>Identify suitable alternatives (substitutions) for dangerous chemicals </li></ul></ul></ul><ul><li>Under REACH, certain S ubstances of V ery H igh C oncern (SVHCs) will be subject to authorization, which could eventually result in their restriction. Most substances will be subject to registration only. </li></ul><ul><ul><li>Until this authorization happens there is an SVHC candidate list. </li></ul></ul><ul><ul><li>Even though a substance only appears as a candidate SVHC, this might result in a de facto blacklisting of the substance by the industry or consumers. </li></ul></ul><ul><li>Not all companies are legally required to be REACH compliant BUT those legal requirements drive broad, global supply chain requirements for all Agile PLM Customers. </li></ul><ul><ul><li>Just like RoHS did. </li></ul></ul>
SVHC Candidate List <ul><li>Initial list published 28 Oct 2008 </li></ul><ul><li>15 substances as of 28 Oct 2008, 7 of which are currently going through the authorization process </li></ul><ul><li>New candidate SVHC substances will be added every 6 months </li></ul><ul><li>Expected to eventually reach 1500 to 2000 substances </li></ul><ul><li>Environmental groups have created their own wish list of SVHCs using the REACH SVHC definition. These substances could be added over time to the official SVHC candidate list. </li></ul><ul><ul><li>www.sinlist.org </li></ul></ul><ul><ul><li>267 substances </li></ul></ul>CAS No. Substance Possible Applications Category 101-77-9 4,4'- Diaminodiphenyl-methane Curing agent for epoxy resin in PCB, preparation of PU, azo dyes in garments Carcinogenic 81-15-2 5-tert-butyl-2,4,6-trinitro-m-xylene (musk xylene) Cosmetics and soap perfumes Very persistent and very bioaccumulative 85535-84-8 Alkanes, C10-13 chloro (short chain chlorinated paraffins) Leather coating, plasticizer in PVC and chlorinated rubber, flame retardant in plastic & textiles Persistent, bioaccumulative and toxic and Very persistent and very bioaccumulative 120-12-7 Anthracene Source of dyestuff Persistent, bioaccumulative and toxic 1303-28-2 Diarsenic pentaoxide Insecticides, weed killer, wood preservatives, coloured glass, dyeing and printing Carcinogenic 1327-53-3 Diarsenic trioxide Weed killers, timber preservatives, manufacture of special glass Carcinogenic 117-81-7 Bis(2-ethylhexyl)phthalate (DEHP) Plasticizer for resin, PVC, blister Toxic to reproduction 56-35-9 Bis(tributyltin)oxide Pesticide, fungicide in paint Persistent, bioaccumulative and toxic 85-68-7 Butyl benzyl phthalate Plasticizer for resin, PVC, acrylics Toxic to reproduction 7646-79-9 Cobalt dichloride Moisture indicator in silica gel, absorbent Carcinogenic 84-74-2 Dibutyl phthalate Plasticizer, in adhesives and paper coatings; insect repellent for textiles Toxic for reproduction 25637-99-4 and 3194-55-6 (134237-51-7, 134237-50-6, 134237-52-8) Hexabromocyclododecane (HBCDD) and all major diastereoisomers identified ( -HBCDD, -HBCDD, -HBCDD) Flame retardant used in HIPS and textiles Persistent, bioaccumulative and toxic 7784-40-9 Lead hydrogen arsenate Insectides Carcinogenic and Toxic to reproduction 7789-12-0 10588-01-9 Sodium dichromate Chrome-tanning of leather, corrosion inhibitor in paints, mordant in textile dyeing process Carcinogenic, mutagenic and toxic to reproduction 15606-95-8 Triethyl arsenate Intermediates for semi- conductor Carcinogenic
REACH Requirements for Article Manufacturers Adapted from: Design Chain Associates Table Situation Pre-requisite Action REACH Your product releases a substance (e.g. an ink cartridge releasing ink ) and is imported to, or made in, Europe <ul><li>The substance is intended to be released under normal and foreseeable conditions of use. </li></ul><ul><li>The substance is not excluded from REACH or exempted from registration (Annex IV). </li></ul><ul><li>The substance is not already registered for that particular use in articles. </li></ul><ul><li>The substance is/will be imported into the EU in quantities over 1 metric ton per year per manufacturer or importer </li></ul>You have to register that substance with ECHA Article 7.1 Your product contains a candidate SVHC and is imported to, or made in, Europe <ul><li>Your article contains a candidate SVHC above a maximum allowable concentration level (0.1% weight by article weight) </li></ul><ul><ul><li>Note: Some countries have dissenting views and require 0.1% weight by component article weight . Remember that enforcement of REACH is at the country level. </li></ul></ul><ul><li>The SVHC will be imported into the EU in quantities over 1 metric ton per year per producer or importer </li></ul><ul><li>Exposure of the substances to humans or the environment cannot be excluded (including disposal) </li></ul><ul><li>The substance is not already registered for that particular use. </li></ul>You have to notify the ECHA starting June 1, 2011 and thereafter within 6 months after an SVHC is placed on the candidate list Article 7.2 Your product contains a candidate SVHC and is imported to, or made in Europe <ul><li>Your article contains a candidate SVHC above a maximum allowable concentration level (0.1% weight by article weight) </li></ul><ul><ul><li>Note: Some countries have dissenting views and require 0.1% weight by component article weight . Remember that enforcement of REACH is at the country level . </li></ul></ul>you have to provide the recipient of the article with sufficient information to allow safe use of the article including, as a minimum, the name of that substance Article 33.1 Someone (not just customers but also consumers and environmental groups) asks about candidate SVHCs in your product <ul><li>Your article contains a candidate SVHC above a maximum allowable concentration level (0.1% weight by article weight) </li></ul><ul><ul><li>Note 1: Some countries have dissenting views and require 0.1% weight by component article weight . Remember that enforcement of REACH is at the country level. </li></ul></ul><ul><ul><li>Note 2: This requirement starts as soon as an SVHC is added to the candidate list. This means that companies are already required since Oct 28, 2008 to provide this information when requested. </li></ul></ul>you must provide the requestor with sufficient information to allow safe use of the article including, at a minimum, the name of that substance within 45 days of the request, free of charge. Article 33.2
RoHS 2.0 <ul><li>Currently in draft </li></ul><ul><li>Anticipated activation 4 th Q of 2012, or 1 st Q of 2013 </li></ul><ul><li>Inclusion of category 8 and 9 products (medical devices and industrial monitoring & control instruments) </li></ul><ul><li>Sunset seven of the current RoHS exemptions, include one new exemption </li></ul><ul><li>Potentially add 4 new substances </li></ul><ul><ul><li>HBCDD - Brominated flame retardant </li></ul></ul><ul><ul><li>DEHP - Phthalate plasticizer in PVC </li></ul></ul><ul><ul><li>DBP - Phthalate plasticizer </li></ul></ul><ul><ul><li>BBP </li></ul></ul><ul><li>More standardized RoHS compliance checks and processes (“declaration of conformity”) are now required in order to put the CE mark on your products. </li></ul>
What Does It Mean? <ul><li>Integrating compliance into your product development processes </li></ul><ul><ul><li>Not a one-time high effort data collection exercise in Excel, Access or stand-alone compliance tools focused on a particular regulation </li></ul></ul><ul><ul><li>Develop a compliance roadmap </li></ul></ul><ul><li>Getting robust product compliance management systems </li></ul><ul><li>Staying up to date on regulations </li></ul><ul><ul><li>Trade associations, in-house legal team, consultants, legislation tracking services </li></ul></ul><ul><li>Developing a corporate environmental strategy in line with your business objectives </li></ul><ul><ul><li>Lobbying? Alone or through trade group? </li></ul></ul><ul><ul><li>Review agreements with partners and suppliers? </li></ul></ul><ul><ul><li>Communication plan to mediate negative PR? </li></ul></ul>Don’t-Ask- Don’t-Tell Yes/No Environmentally-Compliant Follower Sustainable Development Corporate Social Responsibility Picture: PRTM
Design for Compliance/Green Process Flow Integrating Compliance in the Product Design Process ? Due Diligence New Rev or Version Manufacturers, Suppliers Corrective Actions SCM Content DB Internal DB Outsourced Data Gathering Measurements, Simulations Design Product Changes Quality DfX Procurement Shipping Marketing Sales Product Changes, Product Network Changes, Legislation Updates, New Customer Requirements IPC 1752 Custom Form New Design or Shipping Product Product Subassembly Component Supply Chain Design
Summary of solution <ul><li>With Agile Product Governance & Compliance, companies are enabled to: </li></ul><ul><ul><li>Collaborate with suppliers to collect material data via supplier material declarations. </li></ul></ul><ul><ul><li>Generate an environmental view of the product record to analyze for compliance with different legislations and specifications. </li></ul></ul><ul><ul><li>Manage regulatory documentation and specifications </li></ul></ul><ul><ul><li>Track recovery manifests and disposal certificates of destruction </li></ul></ul><ul><ul><li>Manage compliance of outsourced design, manufacturing and recovery partners through proactive audit and closed loop corrective actions </li></ul></ul>
What is WEEE? <ul><li>Aims to reduce the waste arising from electrical and electronic equipment. </li></ul><ul><li>Affects those involved in manufacturing, selling, distributing, recycling or treating electrical and electronic equipment </li></ul><ul><li>By 13 August 2005: </li></ul><ul><ul><li>Producers will be responsible for financing the collection, treatment, recovery and disposal of WEEE from private households and businesses. </li></ul></ul><ul><li>By 31 December 2006: </li></ul><ul><ul><li>producers will be required to achieve a series of demanding recycling and recovery targets for different categories of appliance </li></ul></ul><ul><li>Exemptions apply </li></ul>
What is RoHS? <ul><li>“ Roze”; Ross”, Ro-haas” – Hmmmm…. few have agreed on how to pronounce it, even fewer can agree on how to comply </li></ul><ul><li>From 1 July 2006 onwards: </li></ul><ul><ul><li>Restricts the use of lead, mercury, cadmium, hexavalent chromium, PBB or PBDE above a certain threshold value by weight by homogenous material. </li></ul></ul><ul><li>Exemptions apply </li></ul>
EU Laws Stimulate Global Cascade California: Prop 65 restrictions on materials (e.g., lead cables) SB20 and SB50 set recycling limits in 2005 SB423 harmonizes with RoHS January 1, 2007 EU: RoHS and WEEE China MII: WEEE in 2006, RoHS being finalized for 2006/2007 Korea: Industry agreements to limit certain materials and for products to be recyclable Japan: Recycle target active for household electronics and chemical label plans in draft; “Mitsubishi Green 150 initiative active” Brazil: Existing recycling targets for electronic products and batteries EU: EuP Program Aug 2007 — action required 2006 EU: REACH Program 2008+ votes in Nov 2005 Colombia — Draft National Hazardous Waste Policy USA — Federal- Restricted Substances for Hg Mexico’s Final List of Substances for Toxic Release Inventory and Final Rules on Wood Packaging Chile’s proposal for a National Pollutant Tracking System USA — Federal- Energy Efficiency (external power supplies) Clear need for sustainable, global, environmental compliance programs. Countries are rapidly implementing WEEE and RoHS requirements New European requirements (EuP, REACH) Recycling, battery and packaging requirements are being updated
China RoHS <ul><li>Labeling and information disclosure requirements on electronic information products (EIPs) since March 1, 2007 (pollution control symbol, environmentally friendly use period, packaging label and table of hazardous materials) </li></ul><ul><li>EIPs listed in special “Catalogue” will have substance restrictions as well as a compulsory registration. </li></ul><ul><li>Effective date still TBD for ban of six standard substances and pre-market compliance certification requirements (as of April 2007) </li></ul><ul><li>Product scope, certification process, and maximum concentration values still to be determined </li></ul><ul><li>Testing/Certification by Chinese labs only </li></ul>
Japan RoHS / J-Moss Label <ul><li>Changes to Law for Promotion of Effective Utilization of Resources </li></ul><ul><li>Not a ban for the 6 RoHS substances but labeling and declaration for certain products required </li></ul><ul><ul><li>personal computers (including CRT and LCD displays), air conditioners, televisions, microwave ovens, clothes dryers, electric refrigerators, electric washing machines, and copying machines </li></ul></ul><ul><li>Requires the orange “content mark” be applied if substances are used (unless exempt) </li></ul><ul><li>The green mark is voluntary and is more of an eco-label </li></ul><ul><li>If substances are used (even if covered by exemption), then material declaration is required </li></ul>
Energy-using Product (EuP) Directive <ul><li>Example of an Integrated Product Policy (“Cradle to Grave” thinking) to most cost effectively reduce the environmental impact and resource use of a product. </li></ul><ul><li>Member states must bring into force laws, regulations, and administrative provisions by August 11, 2007 </li></ul><ul><li>Provides EU-wide rules for “ eco-design ” </li></ul><ul><li>Framework Directive does not introduce directly binding requirements for specific products, but defines conditions and criteria for setting such requirements (consumption of resources; emissions; waste generation; environmental impact of noise, vibrations, radiation and EMF; ..). </li></ul><ul><li>Through subsequent implementing measures, requirements regarding environmentally relevant product characteristics (such as energy consumption) can be set and, once adopted, they can be adapted quickly </li></ul>The generic product lifecycle
Roadmap to Agile-based Compliance Management Catch-up Phase Transition Phase Steady State 01/20/06 06/30/06 1 2 3 Customer Example Declaration Management <ul><li>Data gathering for all parts in divisions centralized (“Compliance Manager”) </li></ul><ul><li>Additional data gathering for standard parts on corporate level through content providers </li></ul><ul><li>Data sources: Part Miner, supplier web sites, e-mail requests </li></ul><ul><li>Data gathering for standard parts/part families (ecots) through content providers centralized on corporate level </li></ul><ul><li>Gathering of data for standard parts that is not available from content providers and for custom parts in divisions centralized (“Compliance Manager”) </li></ul><ul><li>Adding Agile based declaration requests and supplier portal to sources </li></ul><ul><li>Gathering of data for standard parts that is not available from content providers and for custom parts in divisions decentralized (“Component Engineers”) </li></ul><ul><li>Agile based declaration requests included in RfI/RfQ </li></ul>Specification Management <ul><li>Focus on RoHS specification (RoHS compliance information required) </li></ul><ul><li>Introduction of JIG Level A & B (JIG A&B compliance information desired) </li></ul><ul><li>Focus on JIG Level A & B incl. RoHS for homogeneous materials (complete compliance information required) </li></ul>Substance Management <ul><li>Focus on part/part family level compliance, yes/no information on part level required </li></ul><ul><li>Substance level compliance, yes/no information on substance level desired </li></ul><ul><li>Focus on substance level information, yes/no information on substance level required </li></ul><ul><li>Partial material disclosure, ppm information on substance level desired </li></ul><ul><li>Partial material disclosure, ppm information on substance required </li></ul>Compliance Validation <ul><li>No BOM Roll ups </li></ul><ul><li>Manual validation using Agile import/export functionality </li></ul><ul><li>Manual corrective action management </li></ul><ul><li>Automatic BOM roll-ups with Agile PG&C </li></ul><ul><li>Automatic validation with Agile PG&C </li></ul><ul><li>Manual corrective action management </li></ul><ul><li>Corrective action management with Agile PS&I </li></ul>Compliance Data Management <ul><li>Div 1: Continuing use of modified Agile PC instance </li></ul><ul><li>Div 2, 3: Adoption of BCD Agile PC modifications </li></ul><ul><li>Corporate: Roll out of PG&C 9.2 instance </li></ul><ul><li>Div 1: Roll out of PG&C 9.2 instance </li></ul><ul><li>Multiple PG&C 9.2 instances corporate-wide (corporate level and divisions) </li></ul>
Quote from Agile PG&C Customer <ul><li>“ The enactment of ROHS and WEEE are positive initiatives for protecting the environment. At the same time, they add a new level of complexity in managing the design, production and delivery of our network performance analysis and service assurance systems. Agile PG&C provides a comprehensive solution for identifying and rolling up compliance information, which will enable us to make strategic decisions about our products to ensure availability, manage costs, and provide the best value to our customers.” </li></ul><ul><li>John Lane, Senior Compliance Manager, </li></ul><ul><li>Spirent Communications </li></ul><ul><li>Agile customer for 9+ years </li></ul>
Quotes from Agile Customers <ul><li>“ As a leader in the global storage market, implementing RoHS worldwide is a critical corporate initiative for us. We believe that the capabilities provided by Agile PG&C will be a key differentiator for us in the world market.” </li></ul><ul><li>Mike Heumann, VP of Marketing, Dot Hill </li></ul><ul><li>“ Meeting environmental compliance regulations is not just an issue of corporate responsibility, it is a requirement for doing business. Agile understands the importance of gaining real time visibility into product information and enriching it through supplier collaboration to meet these compliance requirements.” </li></ul><ul><li>Earl Wiggins, VP of Quality, Quantum Corp </li></ul>
Agile PG&C Customers in the Media <ul><li>Arima Communications is a Taiwan-based leading mobile phone provider </li></ul><ul><li>Deployed PG&C as part of Agile 9.2 to meet environmental regulations </li></ul><ul><li>Press Release Highlights </li></ul><ul><ul><li>Selected Agile because of its stellar reputation, its short implementation time, and the quality of its local consulting team </li></ul></ul><ul><ul><li>Agile 9.2 PG&C enables Arima to meet stringent environmental regulations, such as the EU’s RoHS, by managing environmental compliance across the product lifecycle to collect, track, analyze and report on hazardous material content in products </li></ul></ul>
Agile PG&C Customers in the Media <ul><li>Spirent is a global provider of systems that enable next-generation networking technology </li></ul><ul><li>Upgraded to Agile 9.2 to for the enhanced overall functionality & expanded version of PG&C </li></ul><ul><li>Press Release Highlights </li></ul><ul><ul><li>Agile customer for more than 9 years, recently upgraded and added PG&C </li></ul></ul><ul><ul><li>Will ensure compliance with environmental standards, such as WEEE directive and RoHS, to deliver solutions to more than 30 countries </li></ul></ul><ul><ul><li>Gained visibility into components with banned or restricted substances allows Spirent to take a more strategic approach to product planning & production </li></ul></ul>
Agile Product Governance & Compliance Solution Solution Capability Business Issue Business Benefits Reduce total solution cost and risk Reduce risk of non-compliance Reduce cost of design for compliance Increase revenues, comply to local standards Seamlessly integrate compliance information into transaction systems Design for compliance through optimized component selection Flexible BI framework flexibly addresses regulatory reporting requirements Compliance management framework provides complete solution Rapidly evolving compliance requirements Compliance essential for exploiting New Market opportunities Compliance initiatives consume considerable IT resources Non-compliance involves considerable risk
The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.
Types of Compliance <ul><li>Financial Compliance (SOX) </li></ul><ul><ul><li>Legal Risk Mitigation </li></ul></ul><ul><ul><ul><li>ISO Standards </li></ul></ul></ul><ul><li>Product Compliance </li></ul><ul><li>Product Network Compliance </li></ul><ul><li>IT Governance </li></ul>Oracle GRC Solutions Agile PLM Suite Focus of Today’s Discussion <ul><li>IT Governance </li></ul><ul><ul><li>Information Protection </li></ul></ul><ul><ul><li>Access Control </li></ul></ul><ul><ul><li>Auditability </li></ul></ul>
Consequences of Non-Compliance <ul><li>Exclusion from the market </li></ul><ul><li>Stop ships </li></ul><ul><li>Product returns </li></ul><ul><li>Impact on brand perception </li></ul><ul><li>Fines </li></ul><ul><ul><li>WEEE: penalty for inadequate recovery </li></ul></ul><ul><ul><li>WEEE: penalty for failure to register </li></ul></ul><ul><ul><ul><li>>€1.5M and two years in prison in Estonia; to banned from market in Ireland; to €100K in Italy </li></ul></ul></ul><ul><ul><li>RoHS: >€1M in Spain and Estonia </li></ul></ul><ul><li>Criminal Charges </li></ul>
PLM and the Risk of Non-Compliance Product Lifecycle Cash Flow Approval Volume Phase-Out Cash Flow Time Develop Proto NPI Next Generation Product Ramp to volume 3 Reduce cost & supply risk 4 Reduce service & warranty costs 5 Get to market faster 2 Develop Products “Right to Market” 1 Reduce cost and risk of non-compliance 6
Legal Requirements Drive Supply Chain Requirements <ul><li>Not all companies are legally required to be REACH compliant. BUT </li></ul><ul><li>Legal requirements drive broad, global supply chain requirements for all Agile PLM Customers. </li></ul><ul><ul><li>Just like RoHS did. </li></ul></ul>Distributors Downstream Users Importers Manufacturers or Producers European Union Non-EU Manufacturers European Chemicals Agency
PG&C within the Oracle Product Compliance Framework Data Acquisition & Collection BOM Management & Compliance Analysis Synchronize Data to Transaction Systems Transaction Aggregation and Legislative Reporting Compliance-Based Transactions Ship Sell Design for Compliance Compliant Selling Regulatory Reporting Change Management Produce Dispose Regulatory Reporting Legislative Requirements Corporate Rules and Procedures (Oracle GRC) AIA Integration Product Transactions Declarations Suppliers Content Providers ERP CRM Logistics Regulations & Specifications Legislation Tracking ERP
Nature of Product Compliance A Complex Interplay of Diverse and Specialized Skills <ul><li>Application Integration and Reporting </li></ul><ul><li>Regulatory reporting requires regional and company-wide data aggregation across products and product lines </li></ul><ul><li>Requires integration across multiple systems </li></ul><ul><li>Analytics for aggregation and aggregated reporting </li></ul><ul><li>Robust, Scaleable Software Applications </li></ul><ul><li>Robust data management and storage </li></ul><ul><li>Compliance roll-ups across parts, BOMs, configurations and revs. </li></ul><ul><li>Component and Material Compliance Data </li></ul><ul><li>Compliance data required information for parts, materials and subassemblies </li></ul><ul><li>Increasingly the domain of 3 rd party content providers </li></ul><ul><li>Legislation Domain Expertise (Consulting) </li></ul><ul><li>Identify legislative requirements for individual company (no one-size-fits-all) </li></ul><ul><li>Based on company structure, company risk profile and types of products </li></ul><ul><li>Customer-specific requirements similar to becoming SOX or ISO compliant </li></ul>Regulations & Specifications Data Content Providers AIA Integration
Compliance Data Management <ul><li>Support for substances, substance groups, homogeneous materials and subparts in compositions </li></ul><ul><li>Support for environmental attributes on parts and BOMs </li></ul><ul><li>Management and import of compositions and supplier statements of conformance </li></ul><ul><li>Management of environmental specifications including exemptions and maximum threshold values. </li></ul><ul><li>Ease of specification management throughout BOMs, Parts, Materials and AMLs. </li></ul><ul><li>Ability to maintain compliance at the part group level instead of managing it for individual parts </li></ul><ul><li>Ability to call out materials from the drawings in order to assess and manage the compliance of the materials. </li></ul><ul><li>Multiple compliance states provide a granular view of compliance. </li></ul>Compliance information linked to the product record improves reuse and reduces errors. Specifications Exemptions Substances Substance Groups Materials Subparts Bills of Substances Compositions
Declarations <ul><li>Integration with data content providers </li></ul><ul><li>Multiple types of declarations </li></ul><ul><ul><li>Support for substances (Mass, PPM, Yes/No) </li></ul></ul><ul><ul><li>Support for manufacturing information, part environmental information and exemptions </li></ul></ul><ul><ul><li>Up to full disclosure homogeneous material declarations </li></ul></ul><ul><li>Many data entry options ( Self guided supplier portal, Excel, import/export) </li></ul><ul><li>Support for substance name aliasing </li></ul><ul><li>Support for standards based import/export formats: JGPSSI and IPC1752 </li></ul><ul><li>System assessment of compliance and completeness allowing management by exception </li></ul><ul><li>System calculation of Unreported portion and validation of full material disclosures </li></ul><ul><li>Configurable workflows including support for supplier sign-offs </li></ul><ul><li>Support both for supplier declarations as well as declarations to your customers </li></ul>Gather information from data content providers, via standard industry formats or Excel based templates
Validations <ul><li>Compliance validation of parts and materials </li></ul><ul><li>Multi sourcing compliance across different suppliers of the same part or material </li></ul><ul><li>Compliance validation across different manufacturers for standard components (AML) </li></ul><ul><li>Compliance status roll-up through different revisions of bills of material </li></ul><ul><li>Total substances roll-up through Excel </li></ul><ul><li>Support for information reuse with different specifications (multiple algorithms) </li></ul><ul><li>BOM Compliance Reporting to drill down to issues within a BOM and its associated AMLs, also used for auditing. </li></ul><ul><li>Exclude non-product information such as manufacturing instructions and drawings from compliance roll-ups. </li></ul><ul><li>Compliance impact assessment of proposed changes to BOM or AML (pending revisions) </li></ul>Compliance Roll-Ups help to manage compliance issues by exception
Design for Environment (DfE) Analytics <ul><li>Out-of-the-box Excel based worst case hazardous substances roll-up </li></ul><ul><li>Ability to connect custom analyses at multiple places within the application flow </li></ul><ul><li>Custom analyses (BOM scoring, Pareto analysis, Supply Chain Risk) can be created by Oracle’s services organization, by partners or by the customer. </li></ul><ul><ul><li>% recyclable, reusable, recoverable analysis </li></ul></ul><ul><ul><li>Total substances content (e.g. gold) </li></ul></ul>Use embedded analytics to analyze designs and products for their Design for Environment fitness.
Audit <ul><li>Extensive history logging of events in Agile PLM for auditing and traceability purposes (who, what, when) </li></ul><ul><li>Access control to compliance data (read, edit, under which circumstances) </li></ul><ul><li>Supplier declaration process including a supplier liability sign-off procedure </li></ul><ul><li>Ability to query and report against the entered compliance data (where used, compliance reporting by supplier, by BOM, by commodity, by manufacturer, …) </li></ul><ul><li>Cross referencing of information between the different Agile modules (PG&C, PC, PQM, PCM and PPM) </li></ul><ul><li>Validation Protocol Pack for FDA regulated companies </li></ul>Agile’s security and change tracking features help you to maintain a very high level of due diligence.
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