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Data Overload Crimps Green Efforts

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 {complink 12808|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.

18 comments on “Data Overload Crimps Green Efforts

  1. Ariella
    August 30, 2012

    “He uses ISO 9000 as a template, since the ISO standards emphasize consistency and process.” That made me think that we'll know when it really becomes corporate standard when it makes it into a Dilbert cartoon. 

    Of course, Big Data already made it in on July 29th, an even that the New York Times considered worthy of comment. 

     

  2. SP
    August 31, 2012

    Agree with the issue raised in the article. The whole reason of being green is to reduce waste. But if there is so much data needed to comply with being green, industry might have to rethink. Atleast they are hiring more people to cope up with audit so one way its good to provide employment. On the other note I have used Total part plus products way back in 2006 for obsolescence management. Its quite handy to use these tools.

  3. ahdand
    August 31, 2012

    Yes indeed and I think there are a few automated documentation services available in the market but does not know how good they are. Anyway its a must I feel that you should automate the process of documentation for the future because the paper work or the manual work scenario is dying gradually.

  4. Taimoor Zubar
    August 31, 2012

    “The whole reason of being green is to reduce waste. But if there is so much data needed to comply with being green, industry might have to rethink”

    @SP: Agree with you here. If all this information is being maintained on paper, this means that larger the data, larger the number of pages required. And that means you're damaging the environment again by cutting down trees in an effort become green.

  5. FLYINGSCOT
    August 31, 2012

    I imagine it will be a while before it is standardized across multiple industries.  I hope by then the procedures are easy to understand and follow but I guess I should not hold my breath for that.  I will wait for it to appear in Dilbert and learn from that.

  6. Barbara Jorgensen
    August 31, 2012

    Susan–thanks for the link! You are correct–if it makes a Dilbert cartoon, it's part of the mainstream. The thing about ISO it is a process for standardizing a process, which is great. But most people tell me the upshot is you have proof that your process is good. But if you are making, say, counterfeit components with your process…anyway, lots of room for comment and humor.

  7. Barbara Jorgensen
    August 31, 2012

    I remember talking to TI a few years ago about their effort to reduce their carbon foorprint and the documentation thay use as a benchmark. I tired to read it but not only was it full of acronyms, the measurement process was incomprehensible. I still don't fully understand carbon credits. Anyway, it boarders on ridiculous that every audit request is different and may target different things. Although it must be good for employment, as companies are hiring people just to push the paperwork through.

  8. ITempire
    August 31, 2012

    The requests made by your customers and suppliers cannot be ignored and they have to be satisfied even if takes setting up an entire department for the purpose. However, as far as regulatory bodies are concerned, atleast they should realize that in order to ensure effective implementation green efforts, cooperation has to be imparted as it is not possible for organizations to comply with everything. Its better that organizations fully comply with some rather than dishonour all laws.

  9. ITempire
    August 31, 2012

    @ Barbara 

    It is also good for consultancy firms that are trying to help out organizations in complying with different green laws and in exchange making significant billable hours.

  10. Daniel
    September 3, 2012

    Waqas, a common repository with all similar documents are good and may help for others to access such documents.

  11. mfbertozzi
    September 5, 2012

    @WaqasAltaf: it is a really important perspective and personally, I totally agree with; on the other hand, I have experienced some issues in interacting with customers for the fact that sometimes contract's agreement terms were not sufficiently clear and similar events have generated extra-costs in managing these situations. Right agreement quite often means right relationship, no extra-costs and right way to accomplish for both involved parts (customer and supplier) the sales' matter.

  12. mfbertozzi
    September 5, 2012

    Absolutely yes! Going further, in case we would adopt some kind solutions in terms of tech, we can assume “cloud paradigm” is in condition to full support this process.

  13. Barbara Jorgensen
    September 5, 2012

    @waqas: good point.  “Green” is good while “Greed” is bad…

    seriously, though, the consultanices I have been dealing with have a big picture approach to this issue whereas I think companies and even industries tend to focus only on their own immediate problems. To use another green analogy: consultancies see the forest rather than the trees 🙂 Data is only a symptom of the bigger problem, which is the industry seems to be fragmenting on these issues rather than uniting

  14. ITempire
    September 6, 2012

    @ mfbertozzi

    Well you see the root of the problem is the regulatory pressure. If regulators require a company to evaluate its suppliers' compliance with green efforts, the company will request for data. I dont think there will be any company that will require such data from its suppliers if the regulatory pressure wasnt there.

    Meanwhile, you are right that the regulatory pressure is causing supplier/customer relationships to be taken care of by lawyers.

  15. ITempire
    September 6, 2012

    @ Barbara

    In these times of recession, many businesses cant afford to devote efforts to complying with such laws. Some businesses focus only on profit maximization while ignoring law. Some businesses want to comply and for that they force their supply chain partners to comply if they want to continue dealing. So all these fragments are inevitable and unity cannot be achieved unless all businesses implement green efforts in a uniform way in an industry.

  16. mfbertozzi
    September 7, 2012

    Thank you Waqasaltaf, I totally agree on that and this an additional point to consider; really often people (I mean corporations) take an action because of rules coming from regulators; I believe a different attitude, a proactive attitude, could provide benefits for all involved in the process.

  17. Barbara Jorgensen
    September 7, 2012

    @waqas: Right on. There is always a short-sightedness among public companies to turn the next profit. Investors only look as far out as the next quarter. Investment in green reaps benefits in the long haul, and many companies i know are out there tryig to explain that to shareholders. I think that is a dilemma all companies face: where to invest your limited resources–and where the ROI finally kicks in.

  18. ITempire
    September 8, 2012

    Yes Barbara. It has become so important for companies to inform and explain to their shareholders that they are subject to compliance with environmental regulations and the impact of complying with those regulations on profitability and financial position. Unfortunately, most shareholders will choose a non-compliant profit making company over a compliant low-profit making company.

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