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Proactive Approach to RoHS Rewards Companies
By Jessica Davis -- Electronic News, 7/13/2006
Legions of enforcers did not swoop in to raid electronics companies on July 1 as the European Union’s Restriction on Hazardous Substances (RoHS) directive went into effect. The deadline came quietly, as many in the electronics industry held their breaths, waiting for something to happen.
What happened was that most companies appeared to be prepared, or took steps to enforce the rules on themselves. For example, Palm Inc. stopped shipping the original version of its popular Treo 650 smartphone to Europe, saying it did not meet the RoHS directive.
“Palm was one of the first companies to have all its products ready for RoHS back in April,” said Pam Gordon, president of Technology Forecasters, and the moderator at a recent roundtable event about environmental regulations sponsored by Agile Software for members of the press. Gordon lauded the smartphone maker as one of the good guys in terms of RoHS and other environmental compliance
Now that RoHS is in place and companies have essentially set their plans in place in terms of the European Union’s environmental laws, attention has turned to other geographies. A recent survey conducted by Gordon’s firm found that about 80 percent of respondents were concerned about the upcoming recycling requirements in the Asia Pacific region while about 46 percent were concerned about the upcoming recycling requirements in the United States. Indeed, some states already have such recycling rules in place.
Gordon’s firm offers a list of design for reuse/design for the environment recommendations to help electronics industry companies and other companies create strategies to address existing and upcoming environmental regulations. She recommends that kind of proactive approach.
“We can continue to have fire drill reactions of doing everything at the end of the process, or we can look at doing more of a macro shift to address the issues early in the process,” she said.
Addressing issues early on is the approach that Echelon took. The San Jose-based control network company began its investigation of how to address the EU’s RoHS directive in 2005.
And after looking at its manufacturing operations, Echelon elected to exclude restricted substances from all of its products, even though the applications for some of its projects were among those exempted from compliance with the RoHS directive.
“The assembly and manufacturing processes were so dramatically different, it didn’t make sense to maintain two separate processes,” said Russell Harris, senior VP of operations for $100 million company. “We don’t have the volume to support two lines.”
Harris said Echelon’s customers engaged in an extensive certification process with the new green parts, and so far no failures have been reported, even for the exempted applications.
Because Echelon’s market, which focuses heavily in control devices for buildings that improve their energy efficiency, is very Euro-centric, “we have not pursued exemption as a strategy,” Harris said. Still, Echelon has not experienced any customer resistance to using the green parts for exempted applications.
Competitive reasons are why Dot Hill is moving away from lead and solder faster than originally expected. The exemption for those materials for data storage projects extends until 2010, but Kenneth Strasser, environmental compliance staff engineer for the company, said the company will be eliminating those materials well ahead of that schedule.
Indeed, he said, business reasons are behind all the company’s environmental initiatives, including its efforts at material recycling.
“When we first became aware of the WEEE [Waste from Electric and Electronic Equipment] directive for recycling, it seemed very burdensome,” he said, citing the big administrative costs that would be associated with knowing the laws of all the countries and administrating the programs in each one. “But through recovery, recycling and reuse of the products, we anticipate creating a new revenue stream.” Strasser had no numbers for the program yet but said, “We are confident that it will be positive and not negative.”
Software companies sponsoring the roundtable emphasized the positive opportunities.
“Some companies see these directives as a tax,” said Chris Farinacci, senior VP of marketing for Agile. “Others see it as an opportunity for a competitive advantage.”
Indeed, Gauthier Vasseur, director of solutions marketing at another software company, Hyperion, said that green companies have been shown to be more profitable than non-green companies.
These software vendors offer products to electronics companies that enable them to track their products and data regarding the materials and specifications of the products. And while Gordon said some companies may view such software as expensive, Dot Hill’s Strasser said it was an essential part of the company’s product management program.
“I don’t see how we can afford not to have the software,” he said, adding that Dot Hill did $250 million in revenues last year and has only 300 employees. “We have 10,000 plus parts, and climbing. We are able to do that with the software and one environmental compliance engineer.”
Agile offers several products including Product Governance and Compliance for product life management and Product Compliance Management designed specifically as an affordable option for small businesses.
Alignent Software offers software, such as its flagship product Vision Strategist, which dynamically connects product, technology and market planning data across the corporation.
Hyperion Solutions Corp. offers Business Performance Management software that enables customers to collect data, organize and analyze it, and then communicate it across the enterprise.
