A major issue is the availability of parts that comply with environmental directives, Celestica's Sack says.
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To prove a product complies with environmental directives such as the EU's Restriction of Hazardous Substances and Waste Electrical and Electronic Equipment, a company must have IT systems, as well as audit and reporting tools, to track every part number and the quantity of chemicals each part contains. Electronics manufacturers are redesigning processes, building databases, and enhancing IT infrastructures to create systems that will facilitate compliance.
The major issues are the availability of parts that comply with environmental requirements being introduced in Europe, the United States, and Asia, and the lack of IT infrastructure and data to support the reporting such legislation requires, says Thilo Sack, principal engineer focused on compliance with EU hazardous-substances and electrical-wastes directives at Celestica Inc., an electronics-manufacturing-services company. "Component suppliers are having trouble providing their customers with the chemical-breakdown information they'll need to produce materials-declaration reports and generate certificates of compliance," Sack says.
Environmental directives require information on raw materials in finished products and ban products with high levels of hazardous materials. Companies preparing to comply with these rules seek software tools to identify these compounds and provide adequate analysis and reporting structures to comply with legislation, as well as to meet demands of environmentally conscious customers around the world.
The EU's Restriction of Hazardous Substances directive kicks in July 1, 2006, restricting the use of certain hazardous substances in electrical and electronic equipment and banning the use of others. The Waste Electrical and Electronic Equipment directive, which takes effect Dec. 31, 2006, mandates reuse and recycling of electrical and electronic equipment and will require manufacturers to report to the EU Council products' material content. The materials affected are found in semiconductors, lead finishes, cables, relays, plastic housings, hardware such as screws and bolts, printed circuit boards, switches, solder, and more.
In the United States, legislation is being implemented at the state level. For instance, Maine, Massachusetts, and Minnesota have passed laws in the past year that ban throwing computer monitors out with everyday refuse. California is preparing to implement the Electronic Waste Recycling Act of 2003. Beginning July 1, consumers will pay an E-waste recycling fee on electronic devices sold in the state that contain cadmium, lead, and phosphor. The fee, ranging from $6 to $10 per item and collected by retailers, depends on the device. It also applies to purchases made on the Internet.
As the magnitude of these requirements becomes apparent, companies are taking steps to ensure compliance. Hewlett-Packard is working with its suppliers to develop systems and processes for easy and complete access to materials and compliance information on its 36,000 products. HP has embarked on an ambitious project to create a data store that identifies materials in all its products, down to raw materials. Having to monitor electronic waste through its supply chain also has meant changes to HP's cost structure, business model, and relationships with customers, suppliers, and retailers.
Regulatory directives and legislation will dramatically change business models in the IT and electronics industry, says Renee St. Denis, HP's director of product take-back and recycling in the Americas. "The responsibility to reduce product toxicity is on the manufacturer, and we're spending hundreds of thousands, if not millions, of dollars monthly trying to deal with legislation," St. Denis says. "The money spent on research and development to comply with customer environmental requests and government legislation will eventually go into the price of the products."