Environmental Compliance in Electronics

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AberdeenGroup


Environmental Compliance
in Electronics:
Creating a Successful Strategy
Business Value Research Series







March 2006


The Product Compliance Business Value Research Series
Executive Summary
AberdeenGroup research shows that electronics companies are achieving double-digit revenue growth and enhanced profit margins by improving product innovation, product development, and engineering processes and leveraging PLM technology. Lack of a sus-tainable environmental regulatory compliance strategy, however, can place these gains at risk. Recent interviews by AberdeenGroup indicate companies have made inconsistent, and frequently inadequate, preparation for upcoming RoHS deadlines. Over the past several years, manufacturers have faced an increasing array of new envi-ronmental mandates from jurisdictions such as the EU, China, Japan, and some U.S. states. And the trend will continue. Consequently, companies that can readily adapt to compliance changes will be able to easily compete in more markets, avoid noncompli-ance costs, and experience profitable growth. Major product recalls and noncompliance issues can tarnish brands, cause companies to miss revenue targets, and impact corporate value. Less dramatic noncompliance - such as the inability to readily prove compliance in a new geography - can hamper time to market, product revenue, and product cost. This report is designed to help companies implement a successful, long-term environ-mental compliance strategy. AberdeenGroup's Design for Compliance Benchmark iden-tifies current approaches to complying with regulatory requirements and the shortcom-ings common to many companies, as well as the issues companies need to address to cre-ate a long-term foundation for meeting ever-changing compliance targets. These issues include visibility, design for compliance, design for recycling, documenting compliance, enlisting supplier support, and (if not complying) proving due diligence. In fact, leading companies are designing products for compliance today - and achieving tangible benefits such as 15% reduction in design failure rates and 31% improvement in the number of products that are in compliance. The keys are adopting organizational ap-proaches that encourage compliance, measuring compliance performance more fre-quently, and using appropriate enabling technologies to support engineers in making the right compliance choices at the point of design. Other companies can achieve these gains as well. AberdeenGroup recommends a number of steps for implementing a strategy for compliance. These include: . Incorporating regulatory requirements early in the product design process . Making efficient end-of-life recovery and recycling a design requirement; proac-tively monitoring ongoing regulatory changes for existing product . Managing compliance for multiple jurisdictions, customers, and languages . Considering compliance documentation a key requirement . Selecting the appropriate level of due diligence for your company . Establishing metrics to measure and promote compliance . Taking a platform approach to meet varied compliance needs using common ap-proaches to data, process, and document management
All print and electronic rights are the property of AberdeenGroup © 2006. AberdeenGroup . i The Product Compliance Business Value Research Series Table of Contents
Executive Summary .............................................................................................. i
Chapter One: Issue at Hand.................................................................................1
Chapter Two: Key Research Findings - Meeting RoHS Deadlines ......................3 Interview Responses ..................................................................................... 3 Aberdeen Analysis of RoHS Readiness......................................................... 7
Chapter Three: Implications: The Fundamentals of Compliance..........................8 Visibility.......................................................................................................... 8 Design for Compliance ............................................................................... [download for more]