Many environmental compliance experts talk about unintended consequences. For example, when a hazardous material is eliminated from a product, its replacement may eventually prove just as bad. The amount of paperwork the overall green effort generates may be one such consequence.
Much of the correspondence in the electronics industry is, of course, electronic. But the bigger companies in the supply chain describe receiving hundreds of requests per week for environmental compliance audits. There really is no such thing as a blanket audit. Partners may be seeking conflict minerals status, RoHS compliance data, carbon footprint information, energy-savings potential, or the amount of material X a certain product contains.
"The bigger, more powerful companies in the industry can demand any information they want in any format they want," Peter Robinson, vice president at Total Parts Plus, a provider of environmental compliance and product obsolescence solutions, told us. "The stronger the purchasing muscle, the more likely they are to do it their way."
Companies can fill out audits individually, but many are quickly overwhelmed. One component supplier interviewed at the annual Electronic Distribution Show this year said people had to be hired just to keep up with incoming audit requests.
Businesses also have the option of compiling their own data and publishing it as a PDF online. "The difficulty there is, all of these companies are publishing this information in a customized format," Robinson said. "The OEM has to gather it, aggregate it, and publish it in some normalized format. Very few people realize just how much work that is."
Ken Stanvick, a principal with the supply chain consulting firm Design Chain Associates LLC (DCA) , told us that some companies may not be specific enough in the questions they ask.
"You've got to figure out what they are looking for and what they are trying to accomplish" with this information, he said. "Some companies may be focusing on quality control, others, environmental compliance, but it always comes down to how you demonstrate you are in compliance with their request."
It's a common problem in the green movement, and there are very few standards that satisfy everyone. Stanvick and Robinson cite IPC-1752A, which establishes a standard reporting format for material declaration data exchange between supply chain participants. However, the standard does not specify the format for publishing the data. And Robinson said compliance is a moving target. "The list of materials and chemicals, for example, changes every year."
Total Parts Plus provides a compliance auditing outsourcing service. It started as an obsolescence management consultant and evolved into its environmental role. "It was a natural progression for us," Robinson said. The company's growth has been explosive since it began offering environmental compliance services in 2003.
DCA, which also provides compliance services and solutions, recommends that companies standardize their internal auditing processes first. "If you have multiple divisions, put a process together so your company reports things the same way," Stanvick said. "That way everyone is working from the same spec." He uses ISO 9000 as a template, since the ISO standards emphasize consistency and process.
More importantly, he said, companies must define what they (or their partners) want. "Whether it is for purchasing or for operations, there are the same basic questions. But the issue is what you are going to do with the information and how to make it meaningful for your partners."
Both consultancies emphasize starting off with a solid database. Since many approved vendors' lists use the same components, Total Parts Plus has a base of information on a wide range of devices. "You absolutely have to have a foundation for an environmental spec and make sure everyone [within your company] uses it," Stanvick says.
Also, both consultancies say the situation will only get worse. New products are falling under the scope of the European Union's Restriction of Hazardous Substances (RoHS) or the Registration, Evaluation, Authorization and Restriction of Chemical substances (REACH) regulations. "You also have companies trying to get ahead of others," says Stanvick, "and they want to know what your long-term plan is for greenhouse gases and conflict minerals."
He and Robinson say it is very unlikely the industry will come together on a standardized audit. Many OEMs want to establish themselves as greener than others, and there really hasn't been an industrywide effort here. "The power is on the side of the big OEM," Robinson said. "If I am spending a lot of money with a supplier, the standard [audit] is what I say it is."
Whether audit requests come in on paper or in an electronic format, the supply chain will be seeing a lot more of them.