It's hard not to get a little panicky over Europe's impending Restriction of Hazardous Substances (RoHS). Consider the scope: The world's largest catalog distributor of electronic components,
NewarkInOne, stocks more than 165,000 parts that commonly contain the banned materials. The distributor's database maintains specs, data sheets, inventory and price information on four million devices. "Our estimate is that 70 percent of the parts we stock will be affected by RoHS," says NewarkInOne's president, Paul Tallentire. He expects an even bigger impact on the four million devices in the database.
RoHS limits the amount of lead and five other substances that may be contained in products sold to Europe after July 1, 2006. It also requires documentation proving that the product is RoHS-compliant. (For more on environmental issues, see supplement with this issue "How Green Is the Valley?".) For the supply chain, the compliance deadline isn't the biggest issue. Distributors don't make the components, after all; they stock and sell them. But those functions alone are a logistical nightmare: To date, there is no standard way of distinguishing a part that contains lead, for example, from one that does not. There's no standard way of declaring which substances a component does—or does not—contain, although standardization efforts are underway (see www.ipc.org and www.inemi.org for more information). And there are few provisions for warehousing the number of devices that will be required as the electronics industry transitions toward materials that are more environmentally friendly while still manufacturing noncompliant products. "This is only the beginning," Tallentire says. "There is similar legislation pending in China. The challenge for the electronics industry is not just compliance with RoHS: It's also about managing the environmental impact of our products."
NewarkInOne is owned by Premier Farnell, which is based in Wetherby, England, so the distributor has had a front-row seat at the preparation for RoHS. "We've been putting systems in place for well over 15 months," says Tallentire. The company has been sending RoHS information to customers, outlining what the legislation is and what compliance means (see "The RoHS Directive: What You Need to Think About," below). Its catalogs now highlight RoHS-compliant parts, and its Web site provides parametric search capabilities for such components. But NewarkInOne and other distributors say the most important role they will play in this transition is as an information conduit between component suppliers and customers. "We have 430 suppliers, and that means there are 430 different approaches to marking, numbering, identifying and notifying us about RoHS-compliant parts," says Tallentire. "Our job is to take this immensely complex data and make it as simple and transparent as we can for our customers."
Easier said than done: Just spotting those compliant parts is a task. It won't be difficult if suppliers identify RoHS-compliant parts with completely new part numbers, as
ON Semiconductor has done. "We have assigned new part numbers to all lead-free components," says Keenan Evans, ON Semiconductor's vice president for quality. Some parts are big enough so the part number can be printed on the device. On tiny devices, ON marks its lead-free components with a microdot. The company continues to make parts in both leaded and unleaded versions, doubling the number of parts it produces. "This has created problems with storage space internally, but that's the only way we can track our inventory," Evans says.
Philips Semiconductors, on the other hand, is not changing its part numbers as it moves toward environmentally friendly production. "Our policy has been to keep the same part numbers for RoHS-compliant products," says Andrew Whittard, global process improvement manager for Philips Semi. "This is to enable an easy, seamless transition to the RoHS products." Whittard says Philips' RoHS-compliant parts will perform equally well in both existing and new designs (called backward/forward compatibility). The parts are identified by a lead-free symbol on the label and an identifier code on the device itself.
Suppliers resist changing part numbers, because it's time-consuming and complex. Any change to a part's form, fit or function has to be circulated to customers and the rest of the supply chain; data sheets and specs have to be rewritten and OEMs may have to tweak their product designs. As long as a RoHS-compliant part is backward/forward-compatible, suppliers say, there's no reason to rename the part.
But distributors will still have to separate RoHS-compliant parts from those that aren't, because manufacturers process the parts differently. In cases where a supplier does not change a part number, distributors improvise. "In our system, we translate those products into two separate part numbers, so we can distinguish which is compliant and which is not," says Leonie Tipton, vice president for supply chain programs at distributor
Arrow Electronics. "We will also make sure upon incoming inspection which are compliant." This will, at least in the short term, require more-rigorous inspection on the part of distributors. Inspection is currently done automatically by scanning of supplier bar codes. "If our system doesn't recognize a marking on a supplier's part, that may require a visual inspection," Tipton says.
Another problem distributors face concerns electronic data interchange (EDI). There currently is no data field on an EDI purchase order for compliant versus noncompliant components. "These are all things we have to work through," Tipton says.
Electronics distributor TTI has made a "huge" investment in RoHS-related IT and warehousing, says Craig Conrad, a TTI senior vice president. It first rewrote the computer programs used by its internal salespeople so they could provide RoHS part information to customers. It then changed its inspection procedures in its warehouses and physically segregated compliant and noncompliant devices. Its system flags RoHS-compliant parts with special symbols (rather than creating new part numbers).
Even though the channel seems willing to work around such logistics issues, a major customer segment is not. The electronics manufacturing services (EMS) industry is pushing for the assignment of new part numbers for RoHS-compliant components. "We have some internal case studies in which we have identified parts incorrectly, and that has caused quality issues in the products," says Eric Austerman, environmental program director for EMS provider
Jabil Circuit.
The lead-free solders EMS companies use to attach components to a printed circuit board usually melt at higher temperatures than solders containing lead. These higher temperatures may cause problems in components that can't tolerate the higher heat or cause defects in the lead that attaches the component to the board. "We are trying to convince suppliers that not changing part numbers adds risk to the equation," says Austerman.
Industry associations are throwing their support behind the cause. But ultimately, says Austerman, OEMs have the real clout. "In a lot of cases, we have leverage, but in many other cases, we 'build to print'—we use the parts the OEM tells us to. Even though we are big buyers of parts, we are not designing the next generation of products," Austerman says. Unless OEMs threaten to drop suppliers from their next design, suppliers won't have a lot of incentive to renumber parts, he says.
"The challenge for the electronics industry is not just compliance with RoHS; it's also about managing the environmental impact of our products."
—Paul Tallentire, president, NewarkInOne Jabil is taking steps to keep parts separated, including assigning its own part numbers, based on which customer is using them, and segregating those batches from others. But ultimately, says Ken Stanvick, principal with supply chain consultancy Design Chain Associates, OEMs have to accept the responsibility for compliance. "It's their product—not the supplier's or the EMS'—that is going to be stopped at the border," he says. OEMs, he says, should take the following steps:
Understand whom you are buying parts from. Is it a long-standing supplier or someone else?
Do your diligence. Make sure RoHS-compliant components are identified and segregated from other parts at the beginning of, and throughout, your supply chain.
Make sure your supply chain partners have the systems in place to differentiate compliant from noncompliant parts.
Make sure your manufacturer or EMS partner segregates parts.
Require information on the materials used in your product, and make sure information flows all the way down through field-service repair and warrantee agreements.
But most important, Stanvick and others say, is accepting that the new regulations reflect the way things will be done after July 1, 2006. "This is just the tip of the iceberg," says Stanvick. "Similar legislation is pending all over the world, and in the U.S., many states are passing environmental legislation. RoHS compliance is not enough."
Stanvick says he's seeing a fair amount of panic among companies that have not yet begun to prepare for RoHS. "Many companies have been focused on just staying alive, and now that the deadline is near, executives are becoming very concerned that noncompliance with these regulations could shut them out of the market," he says.
Pessimists believe that if you haven't begun to prepare for RoHS, it's already too late. Optimists say it's never too late to begin. "We have to stay focused on what this is all going to look like when the transition is over," Arrow's Tipton says. "We have to take the long-term view."
