Chris Watts  |  10/03/2008

Green Manufacturing's Competitive Edge

Manufacturers are anticipating future regulations by building ROHS programs into their quality management systems.

During the last 30 years, giant steps have been taken to repair the damage done to the environment by industry. In the United States and elsewhere, rivers that were once dead and filled with toxic pollutants now support fish and are being used for recreation. Humankind’s attitude toward and relationship with nature has drastically changed.

Similarly, government bodies across the globe are planning for future needs and, through legislation, helping to prevent pollution from troublesome chemicals such as lead and cadmium. Companies have figured out ways to reduce the amount of toxic chemicals from their products or manufacturing processes but face new challenges in trying to replicate performance in environmentally friendly ways.

“There’s no question that ‘green’ thinking has moved to the forefront of the global stage,” says Kevin Mullaney, CEO of the National Standards Authority of Ireland’s (NSAI) U.S. headquarters in Nashua, New Hampshire. For more than 50 years, NSAI has offered a full range of services relating to management systems standards and certification services throughout the world. “There are so many environmental regulations across the globe that companies conducting business on an international level are having a difficult time keeping up with the various requirements,” he adds. “Industry as we know it is going through a major shift in thinking, and many companies are still playing catch-up.”

One of the most significant regulations is the European RoHS directive on the restriction of certain hazardous substances in electrical and electronic equipment (EEE) that took effect in 2003. The directive has its roots in the European Council Resolution of January 25, 1988, that called for a plan to combat cadmium pollution, which posed a significant hazard due to its widespread use in batteries, power supplies, and other consumer and industrial electronic items. In the mid-1990s, the European Parliament and the Council of the European Union acted on the need to reduce other hazardous substances commonly used in EEE; by 2000, the first draft of the RoHS directive was finished. It targeted lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls (PBB), and polybrominated diphenyl ethers (PBDE).

“The RoHS directive finally took effect in 2003, and many companies struggled--and continue to struggle--to figure out ways of making their products and maintaining the same performance without these six substances,” says Mullaney. “The RoHS directive was the first major change on a global scale because of the magnitude of the European market. It more or less opened the floodgates for other such legislation in China and Japan, as well as the state of California.”

Confusion about enforcement

Although the various environmental initiatives were passed with good intentions, they have created a great deal of confusion for companies. In many cases, companies haven’t completely understood the directives’ fine print and now face the challenge of manufacturing products that must comply with a host of different requirements.

“I don’t think you’d be able to find a manufacturer that disagrees with the intent of the laws,” says Mullaney. “The challenge is figuring out a way to ensure that their products comply. With supply chains that stretch across the globe, companies need to implement sophisticated systems to ensure restricted substances don’t fall into their product mixes.”

The European Union has been giving companies some leeway when it comes to the enforcement of the RoHS directive. Some fines have been imposed, but generally enforcement has been spotty. It’s not that every company flouts the rules; it’s just that the European Union doesn’t have the ability to fully enforce the directive.

“One of the issues is that RoHS is a self-reported standard, and the regulations have been a bit muddy when it comes to determining what constitutes an ‘adequate’ effort by a company to comply,” says Chris Morrell, vice president of NSAI. “We continue to work with companies to provide RoHS certification, and many companies continue to be diligent in self-monitoring their systems. Unfortunately, I know there are many companies out there that claim to be RoHS-compliant but haven’t implemented the required systems to ensure due diligence. There’s no question in my mind that RoHS is a laudable effort, but without enforcement, it isn’t as effective as it was meant to be.”

Looking for a solution

With the advent of RoHS and other regulations, and increasing consumer focus on green manufacturing, many companies have concluded that the easiest way to comply with all of the laws is to move beyond RoHS and enact comprehensive environmental management systems. In other words, they’re creating internal standards that support the spirit of RoHS but are backed and supported by annual audits and more stringent enforcement.

“We’re starting to see the rules being written not by governments, as in the case of the EU and China, but rather the big corporations like Cisco, IBM, and Hewlett-Packard forcing the issue,” says Tom Rainone, president of Contract Manufacturing Services located in Mount Laurel, New Jersey. “These companies simply don’t want the headaches of having one of their products being singled out for containing an unwanted substance and are starting to require all the companies in their supply chains to comply with their internal environmental standards.”

Of course, whenever you have companies creating their own standards, you run the risk of creating a quagmire of corporate red tape. This is why two certification schemes are slowly being adopted as true benchmarks for eliminating hazardous substances: the IECQ QC 080000 and the Compliance Assurance System certificate.

IECQ QC 080000

“QC 080000 is the only international standard established as a certification process for companies to manage, minimize, and eliminate hazardous substances,” says Stan Salot, president of Electronic Components Certification Corp. “It was created by the International Electrotechnical Commission (IEC) and requires a company to follow a number of standards to ensure that it keeps such substances out of its supply line. QC 080000 is an adjunct to ISO 9001. A company wouldn’t produce components that failed to meet customer specifications without knowing and taking steps to inform customers of the issues. Similarly, although QC 080000 doesn’t preclude the possibility of a mistake being made, it does ensure that the company has a process in place to identify errors prior to releasing a product and take corrective and preventive actions to protect its customers.”

First launched in April 2005, QC 080000 has caught on with a number of large manufacturing companies, especially in Asia. As of January 2008, more than 1,200 companies worldwide--including LG Electronics, Philips, and Azus Technologies Inc.--have signed onto the scheme. According to Salot, a growing number of U.S. technology leaders and retailers have begun to give QC 080000 serious consideration.

“I’m hoping that during the next few years we can build awareness of the QC 080000 system so that larger companies start requiring their entire supply chains to demonstrate compliance,” adds Salot. “Consumers are demanding that companies take more responsibility for their products, and QC 080000 solves that issue.”

Compliance Assurance System (CAS) certificate

But what if a company isn’t ISO 9001-registered or lacks an ISO 9001-compliant quality management system? Or what if a company wants additional proof that it’s taking environmental responsibility seriously? The answer is the Compliance Assurance System (CAS) certificate offered by companies like NSAI. The certificate adheres to the RoHS requirements but also backs them up with annual enforcement.

“Two months before RoHS took effect [the enforcement date], the EU issued a comprehensive set of guidelines that outlined how companies could stay compliant with RoHS,” explains Morrell. “This document is the basis for CAS. A registrar can work with a company to make sure that its environmental compliance systems meet the RoHS guidelines, and then annually audit the company for continuous certification. CAS is RoHS with real ongoing enforcement.”

Rainone thinks that the CAS certificate is a good solution because it’s based on the guidelines written by the same entity that wrote the RoHS directive. “I think that companies that get the CAS certificate gain a competitive edge in the marketplace,” he notes. “CAS shows that a company is committed to RoHS and to keeping contaminates out of its products. There’s also a certain amount of assurance for the company’s management. If you’re a business with factories spread throughout the world, by having all of the company CAS-certified, you’ve put a benchmark in place that lets management know it can sleep a little more soundly at night.”

One company that decided to adopt both the CAS and QC 080000 schemes is SWEMCO, a contract electronics manufacturing company in Moorestown, New Jersey. Mike Galvin, SWEMCO’s continuous improvement and quality manager, says having both certifications is a big selling point in today’s market.

“Having both certifications definitely gives us an advantage when looking for new business,” says Galvin. “If a customer is looking for an RoHS-compliant manufacturer, we can prove our compliance with the CAS certification. By having both certifications, we can showcase our lead-free assemblies and show customers how we can meet their strict requirements within our own compliance system. I definitely feel it’s one way we can stay ahead of our competitors.”

Frank Barbera, a quality control manager with Syscom Tech, another contract electronics manufacturer and component distributor located in Moorestown, echoes Galvin’s comments. “We decided to get both certifications because QC 080000 allows us to have the process management procedures in place to produce a hazardous-substance-free product,” says Barbera. “CAS allows us to monitor our supply base using X-ray fluorescence testing to eliminate any high-risk situations. Having both certifications greatly reduces our risk of contamination and showcases our commitment to environmentally friendly manufacturing techniques.”

Looking to the future

Morrell says predicting the future of environmental legislation is impossible except for one fact: We’ve only just begun.

“Just as the price of energy keeps going up, the pressure on companies--from both government legislation and consumers--to ‘green’ their supply lines and products will only get stronger,” he predicts. “In addition to the current laws, countries such as Taiwan, Australia, and Canada are looking to adopt RoHS-like schemes. If your company isn’t currently working to adopt some sort of environmental program, it’s only going to get harder in the future.”

Salot agrees. Although the United States is currently playing catch-up with environmental regulations, the time is coming when something will happen, he notes.

“Although the EU started the drive toward hazardous-substance-free and recyclable designs, the United States is in the position of being able to benefit from the 10 years of work already done by Europe,” he says. “It appears today that the U.S. government and the retail industry are waking up to the risk that, if nothing is done, the United States will become the dumping ground for products that can’t be sold elsewhere.”

There isn’t a worldwide testing standard, but Salot says it’s coming. The question is when. “The technical committee known as TC 111 is charged with developing the international standard for measuring hazardous substances in products and has been working on the problem for almost five years,” says Salot. “There is a chance that when committee members complete their work, the standard they recommend may be adopted worldwide, but companies shouldn’t wait. In the future we’ll see far more specific and detailed requirements, and be at a much higher technical level. New technology will continue to drive us to new environmental requirements, and those will, by necessity, be more demanding. So this is why companies need to start thinking about their hazardous-substance-free programs now.”

Morrell concurs. “Companies should conduct an internal audit to determine what existing scheme makes the most sense for their situation,” he recommends. “Right now, adopting some sort of internal audit standard, like QC 080000 or the CAS certification, is probably your best way to make sure you’re compliant. You might even see these schemes as a competitive advantage, but the day is coming when these types of certifications will be mandatory. Environmental responsibility is becoming one of the biggest focal points for global business, and having one or both of these certifications is perhaps the best and maybe only way a company can ensure it’s truly hazardous-substance-free.”


About The Author

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Chris Watts

Chris Watts is a freelance writer based in Windsor, Connecticut. He is a former national editor for the Associated Press in Washington, D.C., and bureau chief for Metro Networks in Hartford, Connecticut.