For a multinational electronics manufacturer, selling products to countries all over the world means contending with an array of conformance standards that can vary dramatically from one country to the next. Even within a single country, the standards constantly evolve in response to manufacturers’ growing experience and the realities of political and technical compromise. And, regardless of whether the standards make sense, manufacturers generally have little choice but to follow them.
The challenge divides into three major categories. First, end products must meet the standards in each target country. Can a manufacturer design the product to allow acceptance by all the regulatory agencies? Second, how does a company efficiently and cost-effectively accomplish this complicated task? How can you ensure that new products or new generations of older products will satisfy all of the regulations necessary to qualify for sale? The third challenge relates to the standards themselves. Do they represent an achievable goal, or will conformance cause undue hardship to manufacturers and customers alike? And how can you anticipate changes to the regulations to avoid designing to criteria the industry superseded before your product even hits the market?
Seeing the trends
According to Dan Sullivan, division manager of the product-safety division at TUV Rheinland, for a company that specializes in regulatory compliance, as a whole, meeting standards worldwide has gotten simpler in the past decade. “Generic-product standards, like electrical safety standards for TVs, have been out there for years. They were revised often early on, but, for a long time, they have been pretty stable. Unless there is a signifi cant change in the technology, I don’t expect any surprises.
“Ten or 15 years ago, every country wrote its own regulations. When you made a product, you had to [ensure] compliance for the particular country you sold it into. That aspect of the landscape has changed dramatically. Today, countries have adopted international standards and worked them into their own policies. You can now get past the red tape of a single country or national regulatory body much more easily because the requirements are the same or nearly the same from country to country.
“The big unknown is China. China, with its layers and formalities, may not be the strictest country in the world, but [its] standards may be the most difficult to implement. Getting your products approved by China used to require more effort. An entourage of Chinese inspectors would visit your company to examine your designs and manufacturing facilities. Today, the country appears increasingly willing to loosen [its] regulatory requirements to allow more imports.”
Among the most contentious of the current standards, the ROHS (restriction-of-hazardous-substances) directive from the EU (European Union) limits the use of numerous materials in manufacturing, including lead, cadmium, mercury, hexavalent chromium, and certain halogen compounds. Conformance timetables depend on the nature of the product. For example, the directive grants exemptions for medical equipment and other critical systems. Nevertheless, the writing is on the wall. Many companies have chosen to move toward compliance before it becomes mandatory. Don Cook, global-supply-chain manager at National Instruments, explains: “The regulation states that test-and-measurement equipment doesn’t have to comply until 2012, and it may not be that soon. Still, eventually we will have to meet the standards, so it is to our advantage to take the necessary steps now. Our IC suppliers have already changed their entire product lines to conform to the regulations rather than make different products for different customers. We buy a lot of electronic components since we manufacture our own printed-circuit-board assemblies and have converted our inventory as our suppliers have moved to ROHS compliance. By the time compliance becomes mandatory us, we will already be there.”
Even today, however, no standard can be considered universal or inviolate. Stricter regulations out of China are challenging the EU version of ROHS, which only a few years ago represented the gold standard.
So, how can you design products—especially test-and-measurement products—that fi t easily into this regulatory quagmire? National Instruments has taken a position firmly on the cutting edge. James Truchard, PhD, president and chief executive officer of National Instruments, shares his approach: “We try whenever possible to meet every standard so that our products work everywhere. Historically, Europe has tried to present the strictest standards. Because we have manufacturing facilities in Europe, we maintain direct contact with the people who control the European standards. That contact allows us to more easily apply those standards to our manufacturing facilities elsewhere.”
Similarly, the WEEE (waste-electrical-and-electronic-equipment) directive mandates reclaiming and recycling many products and product materials rather than disposing of them in landfills or by incineration. Adopting that regulation before it became mandatory made the transition much less painful. “The WEEE directive also began in Europe, but the toughest version today comes out of South Korea,” comments Joel Shapiro, NI’s industrial-measurement-and-control-group manager. “So, we have incorporated South Korea’s requirements into all our products shipped worldwide. As additional standards come online, we include them in our global-product offerings, as well.
“For us, compliance is not as complicated as it might be for a maker of PCs or cell phones. Our customers can easily configure and change the functionality of their deployed systems. They configure our systems in the software. One customer, for example, is using one of our measurement systems to monitor mercury emissions from a coal-fired power plant. They can easily install a single piece of hardware in several venues and modify the acceptable limits on each system depending on where it is installed. And, because product upgrades often involve only software changes, our hardware generally survives several product generations, so it doesn’t get scrapped nearly as often as most consumer products do.”
Manufacturers sometimes build the core of a product to work anywhere, such as by incorporating an autoadjusting power supply and other universal features. They may then redesign the aesthetic features for particular markets. For example, apartments and living spaces in many parts of Europe and Asia tend to be smaller than those in North America. Adjusting the form factor for products sold into each of those markets will make them more acceptable to local customers.
Adopting the most stringent version of the standards for all products, wherever the customers may be, may increase costs in the short run, but avoiding the inventory requirements and other logistical consequences of maintaining several product classes helps to mitigate the cost of conforming.
Anticipating future conformance requirements and implementing them now provides other benefits. “Every company wants to be green,” comments Truchard. “We all want to be good corporate citizens.”
Nevertheless, some companies choose not to adopt the global perspective. “A company whose products are confined to a particular geographic area may choose to address regulations only in that area,” says Shapiro. “A manufacturer in Italy who builds test equipment to verify assemblies that are deployed only in Europe doesn’t have to care if those products don’t meet the Chinese standards. Companies limiting their wares to China or India also tend to make country-specific products. Even a large global company that might have a design center in Germany and a factory in Asia might choose to limit conformance of the final products based on their ultimate destination.”
Walking the line
What is the biggest challenge to successful regulatory compliance? “I see the most problems when engineers don’t design the regulations into their products upfront,” comments TUV Rheinland’s Sullivan. “They may design products specifically for major markets that turn out to be the ‘square peg in a round hole’ elsewhere. You need to anticipate all the markets that you want to penetrate at the earliest stages of design and incorporate those requirements at that point. Shoehorning them in after the fact becomes diffi cult, problematic, and expensive. The biggest mistake a company can make is to regard regulatory requirements as a back-end necessary evil rather than as a constraint at the design [stage]. My worst nightmare is the customer who calls to tell me he can’t get a container of some product into a particular country because it doesn’t comply—and can I please help him.” Figure 1 shows TUV Rheinland’s normal certification process.
Companies often have to conform to standards from different regulatory agencies even within one country. Medical equipment sold in the United States must meet Federal Drug Administration regulations. Any product that may generate EMI (electromagnetic interference) must conform to standards set by the Federal Communications Commission in the United States and its equivalent agency in the EU. In the United States, the Environmental Protection Agency handles environmental factors.
Sometimes the fact that a product falls under the aegis of certain regulations proves less than obvious. “A printer is simply a mechanical system that uses standard buses to communicate with its host computer,” says Sullivan. “Yet, today’s printers include radio-frequency devices that give them wireless capability. Incorporating that feature requires that printers, too, conform to standards for radio transmitters that can vary dramatically from country to country. Merely conforming within the European Union represents a significant challenge.”
Sullivan recommends that manufacturers find a strong global regulatory partner, either an independent agency or a knowledgeable consultant with good global-network connections, to show them the most efficient path to the core regulatory standards. “Without that kind of help, conformance becomes a daunting task, particularly for smaller companies. Large companies generally have internal resources to help them. But even they sometimes lack the necessary expertise to meet the needs of a particular local market.”
Taking a global view
Not all standards that differ by geography spring from regulations or other legal mandates. De facto standards—such as Linux, for example—are more common in Europe than elsewhere. European companies generally base their industrial networks on Profi bus and Profi Net, whereas their counterparts in the United States use Ethernet Internet Protocol. If you make products for either market, you have to ensure that those products conform with the customers’ culture and not merely with the regulatory environment. Some standards grow up for economic reasons. High-volume-production facilities in China and elsewhere in Asia tend to discourage testing with “big-iron” testers, preferring a less capital-intensive strategy. Companies selling test equipment have to recognize those trends.
Some standards, such as efforts to reduce greenhouse-gas emissions and their effects on the environment, result from political or social pressures that ultimately affect everyone on the planet. The next generation of worldwide regulations will likely include carbon trading and the push toward recycling and alternative-energy use. “Experts have predicted that carbon will become the most commonly traded commodity in the world,” says NI’s Shapiro. “Manufacturers have to understand clearly the implications on their factories and their manufacturing processes.” Table 1 shows the current targets for alternative energy as a percentage of total energy use for several states and countries.
Here, too, some companies have already placed themselves ahead of the curve. “We try to be as green as we can,” says NI’s Truchard. “It’s good business. We have established a code of conduct for our suppliers and a global take-back program for product returns. Our customers can request that we take back any product for recycling at no cost to them. We take back electronics through approved third-party houses that have been certified as processing them in an environmentally sensitive manner. Our NI campus gets part of its electricity through wind power. Carbon-trading schemes allow companies that create smaller carbon footprints than regulations require to sell their ‘excess’ carbon to companies that have more difficulty achieving those limits. The additional revenue stream translates directly to the company’s bottom line. Many of these practices are not yet mandatory, but they represent a huge potential, and, in the future, many of them will be part of our effort to present a green global image for the company.”
Measuring conformance to regulation is itself a business opportunity. “Measurements are key pieces of green engineering across all applications,” says Shapiro. “If you are developing renewable energy sources or optimizing equipment to use less energy, you have to perform measurements as a fi rst step. For example, carbon trading requires understanding how much carbon your processes emit. New businesses and whole industries are growing up to measure and reduce that carbon and to keep track of carbon credit transactions.”
Sullivan expects the issue of energy consumption to soon take a different direction. “The EU wants to calculate the amount of energy consumed in all phases of a product—design, manufacturing, use, and recycling,” he says. “The new EUP [energy-using-products] directive strives to regulate every aspect of a product’s energy consumption, including energy spent for transportation between manufacturing facilities, distribution points, and customers, and the energy required to get rid of it at the end of its useful life.” He also stresses the increasing importance of recycling: “If you consider a product’s carbon footprint as a cradle-to-grave issue, then buying a hybrid car might not prove environmentally sound if you simultaneously trade in an older car that ends up in some landfill,” he says.
To reduce the energy consumption of electronic products, the Energy Independance and Security Act of 2007 has established minimum efficiency requirements for many products. This act soon will include a 1W “standby” rule for external power supplies and battery chargers. That is, when a product is in the idle state, it cannot consume more than 1W of power. “That rule will likely mark the next change in US regulatory requirements,” says Sullivan.
The moving target moves away
Part of the current challenge of ensuring that products conform to regulations is that those regulations often seem arbitrary, established by committees with little understanding of their consequences. Just when companies think they have made sufficient plans to conform, the rules change. As a case in point, the EU has proposed revisions to the ROHS directive to further limit human and environmental exposure to such substances. Unfortunately, according to a white paper that IPC (Association Connecting Electronics Industries) recently released, implementing some of those changes unaltered could cripple the electronics-manufacturing industry.
Consider, for example, a proposed ban on halogen-based chemicals such as TBBPA (tetrabromobisphenol(a)), a common flame retardant used in PCB (printed-circuit-board) laminates in some two-thirds of the electronic appliances worldwide. The white paper contends that there is no evidence of harmful effects of the chemical and there is no adequate universal substitute. Besides, the industry is already taking numerous precautions. It is even addressing possible adverse effects of making the chemical, such as by limiting production-plant emissions. According to the paper, “Even the European Union Risk Assessment published in the EU offi cial journal on 18 June 2008 does not support the restriction of TBBPA.”
“At National Instruments, we are constantly monitoring the various global directives,” says Cook. “For instance, when we recently became aware that Deca-BDE [decabromodiphenyl ether] was no longer allowed as a ROHS exception, we checked into what parts used it. Realizing that it should have been on the original list, many suppliers were already attempting to get rid of it. As we find out about the next element subject to regulation and the one after that, we have to perform the same due diligence to be sure that both the products that we buy and the products that we sell will comply. If companies don’t have a process in place to ensure that the next product will be compliant, they had better establish one.”
However prepared companies might be, the IPC paper contends that a ban on this material would have significant side effects. Although halogen-free alternatives are available, quantities are limited, and their inclusion would dramatically raise manufacturing costs. Cost aside, these materials have not undergone the rigorous risk assessments of TBBPA, and the phosphorus and other elements that they contain may turn out to be dramatically more toxic than the bromide that they are intended to replace. Some products would not tolerate the substitution at all. According to the paper, the following would be the most signifi cant consequences of such a ban:
· Substitution with a halogen-free alternative would add $211 million per year in additional costs for the material alone.
· The approval cycle for PCB makers would be three to five years and cost $17 million to $21 million more per year.
· Because the chemical behavior of the new material would of necessity be different, the ban would require a redesign of many boards, with unpredictable consequences in both cost and product performance.
· For some products, there is currently no halogen-free alternative. Developing one could take fi ve years or more at a substantial cost in both money and productivity resources. The interim impact on affected products would depend on the regulatory agencies. The paper estimates the cost of these efforts at tens of millions of euros/dollars.
· Products that require additional approvals, such as medical products that need FDA approval in the United States, will require many additional years of testing before receiving that approval.
Doing away with “all organic compounds containing chlorine and bromine,” as another of the proposed regulations suggests, would cause even more havoc. The original ROHS directive banning lead from electronic solder caused considerable pain as the industry scrambled to find a suitable replacement. The new lead-free solders have a higher melting point than their predecessors did and therefore permit much narrower process conditions during PCB manufacture. The proposed revisions to the directive would aggravate the situation. Plasticizers and wetting agents used routinely in solder include compounds that fall under the ban. Most solder fluxes also contain halides, and there are currently no viable alternatives. In addition, the regulation’s ambiguous wording could leave manufacturers unsure of whether their processes conform. Finding out that you have violated the directive after the fact could cripple some—especially small—companies.
The white paper insists that demanding that the industry replace compounds that have endured years of validation for their intended use with untried and untested alternatives risks system failures, with consequences ranging from mild annoyance to a catastrophic avionic- or medical-electronics failure.
Companies whose products find their way onto the international stage must contend with a plethora of complex, confusing, and sometimes- conflicting regulations. For some companies, conforming to the strictest of those regulations proves the path of least resistance. Other companies with a geographically narrow market may restrict their efforts to the requirements of their target countries. Nevertheless, everyone must contend with ever-present changes to the regulations and find a way to deal with legal requirements that may complicate the task of cost-effectively making reliable and affordable products.
REFERENCE
1. The Electronic Interconnection Supply Chain’s Response to Öko-Institut’s Recommendations for Proposed Revisions to the RoHS Directive, IPC, 2008, www.ipc.org/EHS.
Captions
FIGURE 1: This step-by-step process shows what happens when a product comes under evaluation for regulatory compliance. Step 1 begins with the initial contact with the third-party compliance agency (courtesy TUV Rheinland).
TABLE 1: RENEWABLE-ENERGY GOALS FOR VARIOUS STATES AND COUNTRIES
Click here for the illustrations:
Figure 1, Table 1
