Companies still ill-prepared for compliance, especially with RoHS
By Debra Bulkeley, Executive Editor -- EDN, August 8, 2006
RoHS has been in effect for more than a month. Can you confidently report that your products are compliant, based on a complete and accurate product compliance record?
If you answered “no,” you are hardly alone. According to a RoHS readiness survey Arena Solutions conducted, 65 percent of respondents said they wouldn’t be able to confidently report compliance based on an accurate compliance record.
More than 200 manufacturers (not Arena customers, the company says) responded to the survey, which was launched online on April 30 and asked participants to identify and assess risk based on 16 key capabilities related to tracking, documenting and reporting of RoHS compliance.
According to the survey results, 83 percent of respondents were at severe to high risk of not being able to demonstrate compliance or due diligence for RoHS based on their documentation management capabilities.
When it comes to compliance in general, a large percentage of companies just plain don’t understand the regulations, according to research from Aberdeen Group. The market research firm found in its own survey that two thirds of product companies lack insight into the regulatory, environmental and operational rules that affect their products—let alone being positioned to measure and comply with these requirements. Aside from not understanding the regulations that apply to them, Aberdeen Group also found that nearly 80 percent of companies lack a cohesive systems infrastructure to track, audit or manage product compliance.
Why are companies so ill prepared to comply with regulations, particularly RoHS?
“There is so much confusion about issues such as what is current, when certain things apply, when they don’t and knowing when the regulations are going to be enforced. Companies just don’t know,” says Jim Brown, VP of product innovation and engineering research, Aberdeen Group.
Another element contributing to the lack of compliance processes is that many companies don’t view compliance as a long-term investment.
“Companies are investing in becoming RoHS-compliant, but many are handling it as a ‘one-off’ effort and not in a systematic, repeatable way,” Brown adds. “They don’t have the audit trails. Because of that, when the next requirements come along, they are going to have to deal with them again and again if they haven’t dealt with them in a systematic, repeatable way.”
Eric Larkin, Arena’s CTO and cofounder, who admits that the company was surprised at its survey results, notes that “a significant number of business processes need to be altered.”
Larkin says that the electronics industry should consider adopting the mantra of the medical industry, which has been regulated for decades: “If it isn’t written down, it didn’t happen.”
“This is a fluid regulatory environment. The electronics industry needs a solution that’s designed not just for RoHS but for a variety of regulations,” Larkin says.
Brown of Aberdeen Group says that RoHS is the “tip of the iceberg.” China’s regulations, which will be different from the European Union directive, loom next year, and Brown says that most companies aren’t even thinking about them. Japan and some U.S. states have their own regulations in the works.
“Companies need to build regulatory compliance into the design cycle in all phases. You need to be able to design for compliance as products and regulations change,” Brown says.
What many companies struggle with when it comes to compliance is allocating resources to the effort, because it is hard to quantify its benefits to the business. Investing in innovation, on the other hand, has the potential to grow the business. Yet compliance is a strategic problem and not a tactical one, Brown says, which only adds to the resource dilemma, given that many executives view it as a tactical challenge.
“You’re not going to comply your way to growth,” Brown says. However, he adds, investing in being compliant is one way companies can protect themselves so they can, in fact, grow.
Related articles:
RoHS and Non-compliance: Expect to see penalties
Executive Guide: RoHS and Compliance
Small companies still unsure on RoHS
