The Cost of Compliance
By Cindy Newell
My-ESM
6/01/2006
The July 1 deadline for compliance with the European Union's Restriction of Hazardous Substances directive is almost here. Established in response to the increasing amount of consumer electronics products ending up in landfills, RoHS is clearly beneficial for our environment. However, it is an expensive proposition for manufacturers, distributors and OEM customers alike.
The significant expense is closely tied to the struggle to identify and manage RoHS-compliance requirements — from technical and qualification issues to inventory control, forecasting, part-number management, communication and documentation. There's no escaping the additional costs and complexity, but communication along the supply chain can mitigate their impact.
Forecasting and inventory control
Many semiconductor manufacturers rely on third-party assembly houses for inventory control. Thus, accurate forecasts are crucial to ensure a continuous supply of product. The RoHS transition only magnifies that need. Forecasts are sent to assembly houses for raw materials such as substrates, lead frames and molding compounds. To achieve accuracy, the semiconductor company needs to understand customer requirements, including exemptions or waivers from the RoHS directive.
Identification
Another potential downside of the RoHS directive is that it does not automatically stipulate how compliant devices should be identified. Part-number management will affect RoHS compliance efforts across the industry, almost more than any other factor. Some component manufacturers are changing their part numbers to identify compliant and noncompliant products, which potentially creates dual inventory, while others are using date codes or revision levels to differentiate between products that comply and those that don't. Still, identification methods vary across the industry.
Read the entire ESM article "The cost of compliance".
