Make your electronics supply chain green—or else

Design engineers are turning the global electronics supply chain green.

Rob Speigel, Contributing Editor; Edited by Suzanne Deffree, Managing Editor, news -- EDN, April 7, 2011

Regulations and the need to save energy are compelling supply chains in the worldwide electronics industry to take a turn toward sustainable approaches. From the moment the design process begins, design engineers need to specify “green” parts, design for green manufacturing, design light packaging, and ensure that their products are recyclable or returnable at the end of life.


Just a few years ago, the EU (European Union) imposed a green focus on the electronics supply chain with its ROHS (restriction-of-hazardous-substances) directive, which called for the removal of six materials deemed hazardous from electronics design. The EU’s REACH (registration, evaluation, authorization, and restriction of chemicals) ordered companies to detail a range of chemicals in their products. In recent years, products’ end of life has become an issue, whether it involves design for recycling or the patchwork of take-back legislation emerging from individual states in the United States.

Ultimately, the power to force change comes from regulations that countries and states have passed. “The order of priority in the green supply chain is legislation, legislation, and corporate image,” says Kenneth Stanvick, senior vice president at DCA (Design Chain Associates). Yet some companies shrug off the regulations. “Many companies are having a hard time recognizing that—from a legal perspective— they’re breaking the law if they don’t comply,” he adds.

The electronic-waste laws in the United States have brought every corner of the electronics industry into environmental compliance. “The green supply chain is getting some traction because of the e-waste legislation; 24 states have legislation,” says Patrick Penfield, director of supply-chain executive programs at Whitman School of Management at Syracuse University. “Those 24 represent 65% of the population in the United States. All of the laws, except California’s, use the producer-responsibility approach,” meaning that the maker must take back the product at the end of its life.

Many small to midsized companies are turning to distributors to help facilitate takeback programs. “Distributors such as Avnet and Arrow are helping customers with end-of-life and reverse-logistics issues,” says Gerry Fay, senior vice president of global-supply-chain and strategic accounts at Avnet Electronics Marketing.

The silver lining in the pressures to be environmentally sound is cost savings that come from reduced energy consumption. A small revolution is occurring in reduced energy use in manufacturing and in the logistics of getting parts to one location and sending them to another. “Green behavior can be very beneficial from a cost standpoint,” says Colin Campbell (photo, center), vice president of supply chain at Newark. “It takes planning and coordination with suppliers, but manufacturers can consolidate freight and ship orders every week instead of every day.”

Energy has also become one more consideration in design. Both corporate and consumer customers expect companies to offer low-power-consumption products. “The foremost issue in energy is lower-power design. It’s not a new concept, but it has become a huge theme,” says Andrew Femrite (photo, right), engineering-solutions manager at Arrow Electronics Inc. “People are looking for low power in all their applications. People are looking for energy harvesting, where the product no longer runs on batteries.”

At the center of the green supply chain is the design engineer. Not many years ago, an engineer could spend time at the bench creating great products. The concerns were quality, market competition, and cost. A few new and profound responsibilities have fallen on the design engineer’s shoulders: green part selection as well as design for green manufacturing, for energy savings, for light packaging, for recycling, and for take-back. Plus, the target is always moving. A product that meets the long list of criteria this year will likely fall short five years from now.

The beginning and the end of the green electronics supply chain turn on the knowledge and decisions from the design effort. “The burden of compliance is on design,” says DCA’s Stanvick. “That includes material-restrictions reporting, since most companies don’t have a material-restrictions staff. Reporting is a burden on design engineers.”

Going green is mostly a tax on the supply chain. While there are some savings to be taken on energy savings, most of the moves to sustainability come with a price. Companies have a choice in dealing with the additional costs: lower margins or higher prices. In most cases, the cost gets pushed out to the end user. “It’s a cost of doing business. You pass it along or eat it,” says Stanvick. “There’s no good answer. You can bury the cost in your product, but it’s not free.”

The companies that fare best in the transition to a greener electronics industry are those that move quickly and aggressively. “Being reactive to the host of increasing regulation from around the world is where the tax comes in,” says Technology Forecasters’ Gordon. “Companies that get ahead of it can save money and reduce costs. The companies that are the boldest, the most consistent, and the most serious with executive commitment will be the best off.”