Documenting RoHS Compliance Seven Tips

An Arena Solutions whitepaper
RoHS
Arena Solutions
COMPLIANCE I N I T I AT I V E
www.arenasolutions.com
Documenting RoHS Compliance: Seven Tips from the Field
whitepaper
2007 Arena Solutions ,Inc. All rights reserved. Arena Solutions , Arena PLM, Product Arena , Sourcing Arena , Integration Arena and bom.com are trademarks of Arena Solutions. Other product and company names are the property of their respective holders .
RoHS
Arena Solutions
Introduction
Its a brand new world for electrical and electronic equipment manufacturers. With the European Unions (EU) Restriction of Hazardous Substances (RoHS) Directive, which took eect on July 1, 2006, manufacturers (or producers) who ship to Europe must ensure their products are fully RoHS-compliantthat is, that they dont exceed maximum concentration levels of certain hazardous substances [1]. Moreover, manufacturers must be able to demonstrate compliance upon request. So, in addition to requiring fundamental changes in material supply and production methods, RoHS places a signicant documentation burden on manufacturers. While a majority of manufacturers have already converted their products to RoHS compliant and have gathered compliance evidence, they often havent given as much thought to the data management aspect of RoHS. Since the volume of data has grown signicantly (new complaint BOMs, additional items, associated documentation, etc.), many companies now face the risk of losing the exact relationship and audit trail of parts, regulatory requirement, risk assessment, compliance status, material declarations and evidence les. Some companies resorted to the use of paper-based, manual documentation in spreadsheets and le servers to manage their data. Now that approach is starting to result in wasted time, ineciencies, and possibly, costly reporting delays and errors. Managing the mountain of compliance-related information will require manufacturers to develop a data management initiative, often using an automated product lifecycle management (PLM) system at its core. Arena Solutions has been the PLM vendor of choice for over 250 manufacturers. Arena PLM enables manufacturers to centralize, track, document and report on RoHS compliance-related data as well as their complete product record. Using Arena PLM, manufacturers can manage product data and compliance more eectively and minimize their risk of non-compliance. This whitepaper contains object lessons gathered from dozens of customer implementations and hundreds of eld interviews, which are grouped under seven useful tips and tactics that you can leverage in your own organization.
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RoHS
Arena Solutions
Tip #1: Read the regulations and guidance documents. Then read them again.
In order to understand how to allocate time and resources to ensure RoHS compliance, manufacturers must rst understand the regulations and key guidance documents. This ensures the company gets the biggest return on their compliance eorts and ensures a successful transition. RoHS requires manufacturers to know the compliance status for each part or material in all of their products covered by the regulation. By placing their products on the EU market, manufacturers are, in essence, declaring that theyve complied with RoHS. To conrm compliance, authorities within each EU Member State will carry out market surveillance and conduct checks on products. Manufacturers must be ready to submit a technical le that provides evidence of compliance. In case of non-compliance, they could face consequences ranging from nes and negative press, up to imprisonment [2]. RoHS necessitates that manufacturers correctly understand its specic terminology. For example, the term homogeneous material means a single material that cannot be mechanically disjointed into dierent materials. A part may not necessarily be one homogeneous material, but may consist of several homogeneous materials. For example, a chip resistor may consist of several homogeneous materials, as shown in the picture. The regulations require the manufacturer to be able to provide compliance evidence based on an analysis for each of these individual materials. Another key RoHS terminology is due diligence, meaning that the manufacturer has taken all reasonable steps to avoid committing an oense. Based on the regulations, to be certain that every single unit meets RoHS requirements, manufacturers would have to verify compliance for every part used. Since they themselves dont control the manufacturing process for these parts, that eort would not be economically viable. Thats why the U.K. allows for a defense of due diligence, which recognizes manufacturers best attempts to comply with the regulations in the event of non-compliance [3, 4]. Its expected that other EU Member States will incorporate a similar concept as well. Manufacturers may put controls in place to minimize non-compliance, for example: In the design process, documenting RoHS compliance as a design requirement, selecting parts and materials that meet that requirement, and documenting evidence. In the procurement process, purchasing to controlled manufacturing part numbers and working with supply chain partners to properly ag purchasing anomalies. In the manufacturing process, implementing robust inventory identication and logistics control mechanisms, and assessing materials used in the production process (e.g. solder). In the quality process, embedding robust part identication procedures in receiving, and implementing sample RoHS compliance screening for high risk parts. By thinking through non-compliance risks in a structured manner, developing controls for the various manufacturing process steps, and most importantly documenting the execution of these controls, the company can build a due diligence defense
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RoHS
Arena Solutions
To demonstrate compliance for materials, parts or assemblies, manufacturers can obtain assurance from their suppliers that their parts do not contain more than the permitted levels of the RoHS Six. (Note that RoHS denes six classes of substances, not merely six substances. Each class has multiple substances, including oxides and other compounds. The actual number of materials regulated by RoHS is nearly one hundred.) In many cases, suppliers will provide this assurance in the form of a certicate of compliance, a declaration of conformance, or a more detailed materials declaration document. Manufacturers are also expected to evaluate the reliability of supplier provided compliance documentation themselves. The information should indicate that the analysis was done by homogeneous material, and not for example as one aggregate. A defense of due diligence requires that manufacturers identify the third party as well as its source information. Its therefore prudent to request (or only accept) information clearly marked with the third partys corporate identity and signed by an ocer of that company. Ultimately, the sheer complexity of modern products necessitates that most producers optimize their compliance due diligence by conducting a risk analysis. Companies must assess their manufacturing bills of materials (MBOMs), and identify parts and materials that may present a high risk of containing any of the RoHS substances, or that may be sourced from suppliers considered high risk in terms of quality control. In the case of high-risk parts and suppliers, the manufacturer may decide to complement certicates of compliance and material declarations with a third-party sample analysis, as well as a supplier audit to establish manufacturing process controls. Some producers may also require high-risk suppliers to provide date-specic compliance certication for each shipment for a period of time after the RoHS transition. Reporting presents another signicant challenge to manufacturers. Although exact reporting standards havent been established by RoHS regulation, manufacturers are expected to provide complete and accurate reporting. Guidance documents [4] suggest it is likely to be a combination of supplier certication, with materials declarations for the RoHS substances and additional analysis for high risk parts as mentioned before. Complete and accurate reporting is important, as not only have Member States such as the UK specied a 28 day window, but more importantly, delays in responding and extensive follow-up clarication may actually impact shipments in customs. The ability to generate instant, complete and accurate reports requires accurate bookkeeping of each revision of every part, with all approved manufacturer parts, risk assessment status, and any associated evidence les.
Tip #2: Centralize all product and compliance records.

Many dierent parties, both internally and externally, need access to compliance information. Making sure everyone works from a single centralized set of data will greatly improve eciency and reduce errors. The rst step to centralizing records is dening the correct BOM. RoHS applies to the entire product, that is, every part and material in it. In order to determine the compliance status of a given product, a company must rst establish the complete part and material list. Typically, the manufacturing BOM is a good place to start. Thats because a design BOM dont necessarily provide all controlled documentation that manufacturing will use as the build BOM.
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RoHS
Arena Solutions
However, not all manufacturing BOMs are complete and accurate. In addition, non-purchased parts and materials, like solder paste, standard fasteners, tie wires, or glue, may end up in the nal product. Tracking against purchased parts in an enterprise resource planning (ERP) system may seem like a logical choice, but in reality may lead to incomplete reporting. Ultimately, ERP is a nancial analysis and ordering tool that cant be transformed into a dynamic product and compliance management tool. Manufacturers must also track compliance from within. Many companies outsource procurement and nal assembly to contract manufacturers. Consequently, they dont maintain a record of the actual as manufactured product themselves, if tracked at all. However, they typically do capture the manufacturing BOM, so that it can be transferred (all or in part) to the material requirements planning (MRP) system and be shared with the contract manufacturer. The optimum place to maintain compliance records is within the same environment in which the manufacturing BOM is kept. Most modern manufacturers choose to leverage a PLM system to do this. (Please see the gure below for more details.)
Tracking compliance from within also makes it easier for the engineering team to design for compliance. Engineers need full access to compliance information as soon as a manufacturer part number is being added to an approved manufacturer list (AML). Tracking that information in a spreadsheet, or in isolated databases, can lead to discrepancies between the actual product and the compliance record. Only by tracking compliance within the manufacturing BOM can a company demonstrate that compliance management is an active part of its design, purchasing and manufacturing process. For every part and material used in the product, companies also need to manage any evidence les as part of the compliance record. Besides a certicate of compliance and material declarations, this may also include documents
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RoHS
Arena Solutions
such as supplier audits, part screening reports, and rst article inspection reports. Thats why keeping les directly linked to central part dataand not isolated in le serverswill enable manufacturers to maintain accurate and complete records.
Tip #3: Understand your full data management needs.

In order to actually demonstrate compliance and if needed, due diligence, a manufacturer needs to track more than just a compliance status. Without rst understanding the information that is needed, properly managing the increasing amount of information can become a daunting task. The 2002/95/EC RoHS regulation may not be the only one you need to comply with. Its therefore important to be able to apply individual requirements to a product, and track the compliance status of a part as a function of each specic requirement. Additionally, manufacturers must document exemption claims and refer to the clauses on which exemptions are based. After all, it may take only a minute to document an exemption, but it may be signicantly more dicult to recall the exemption and the exact rationale for claiming it over time. Tracking part risk level is also critical. As discussed earlier, a risk assessment based on parts, materials and suppliers helps to identify where to allocate your conformance assessment resources. Identify what parts are known to contain any of the RoHS 6, are easy for enforcement agents to screen, or are sourced from suppliers with a less credible quality history. Capturing your risk level further supports a due diligence defense. Its imperative to track compliance status as well. Keep in mind that BOMs can be dened in various ways. A typical method, for example, is to dene internal part numbers and cross-reference them with qualied manufacturer part numbers for o-the-shelf parts (i.e. using the AML). The compliance status of an internal part number is a function of the entire AML. Only if all manufacturer parts qualied on the AML are veried as compliant can an internal part number then be compliant. Tracking compliance on internal part numbers provides greater assurance on internally-produced, non-sourced parts. Given the evolving nature of electrical and electronic products, tracking by revision can further ensure compliance. Every item and assembly may change over its lifecycle, which may aect its compliance status. For example, adding a new manufacturer part to the AML and rolling its revision requires the manufacturer to review the part for RoHS compliance and add new compliance evidence. Consequently, the new part revision is associated with a new compliance record. Finally, as indicated above, manufacturers should manage the central product record themselves. The record should contain the complete AML, be secured with revision control features, support multiple custom elds, and directly link les with either their internal parts or manufacturer parts. Faced with these complex data management requirements, most manufacturers realize that neither their paperbased systems, nor their ERP/MRP solutions, are adequate. Some will attempt to manage their complex product data, engineering change orders (ECOs), and compliance data via a manual system in which spreadsheets are passed back and forth between collaborators and quickly realize it is impossible to keep everything accurate and in sync. One manufacturer tried to track compliance for more than a year in a well known ERP system, ultimately
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RoHS
Arena Solutions
gave up and turned to Arena. For most companies, the only real answer is PLM, which centralizes the product record, tracks compliance-related data, and automates data management.
Tip #4: Document with reporting in mind.

One manufacturer Arena recently spoke to, sent a BOM to the EU for review stamped by their contract manufacturer with the word compliant. The EUs response? It stated that that level of documentation would be considered insufficient. A compliant stamp only has meaning to EU auditors if they can review the process leading up to that stamp. Thats why companies need to collect proper and full documentation that will enable reporting. Ultimately, the information you capture is only one piece of demonstrating RoHS compliance. How you aggregate and assemble that information within a complete and accurate report is another vital element, especially for auditors who will seek sucient evidence of compliance. Keep in mind that most auditors wont understand the nuts and bolts of your electric or electronic product; instead, theyll be trained in verifying completeness, accuracy and the documentation process of the compliance report. Manufacturers should use the indented manufacturing BOM (including the AML) as a basis for their reports. Proper documentation should include all revisions. An assembly revision may have undergone several revisions of child items before it was rolled to the next revision. To demonstrate compliance by design revision, manufacturers would have to demonstrate compliance for all revisions of all child items that were eective under an assembly revision before it was rolled to a next level. Manufacturers should also include compliance rationale for a given compliance status. Its important to help auditors understand the relation between the status and the evidence provided in the compliance report. This practice will signicantly improve the accessibility of the information, requiring less time-consuming clarication. Finally, manufacturers should maintain complete product histories. RoHS requires the manufacturer to retain compliance records for up to four years after the product is put on the market. Since its not feasible for document control personnel to remember the locations of hundreds to thousands of evidence les, its therefore vital to implement a data management solution that maintains complete product histories over the long term.
Tip #5: Build due diligence into your key processes.

Manufacturers need to determine which other process controls besides controlling the design process can be added to minimize the risk of shipping non-compliant products to Europe. Additionally, they must document the results of those controls in order to be able to construct a due diligence defense when required. A common approach is creating strict procurement controls. Managing the AML as part of the product specication record ensures that your company purchases only the correct, compliant parts, either via the internal purchasing organization or the contract manufacturer. Leaving the manufacturer unspecied (i.e. through an open AML) for commodity parts increases the risk of purchasing non-compliant inventory.
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RoHS
Arena Solutions
Additionally, an organization should create manufacturing change controls. For any change to a compliant product in production, its necessary to implement change controls as part of the engineering change order processes that document compliance re-assessment for new revisions. This should include deviations, temporary change orders and waivers. Manufacturers should also add compliance screening to incoming inspections. As mentioned above, high-risk parts necessitate dierent precautions. Especially for manufacturers whose products are being used in other products by their customers, avoiding the use of non-compliant parts can be critical to maintain that customer. In the case of parts that are high risk, or perhaps for all parts in the rst months after the RoHS transition, the manufacturer may decide to complement certicates of compliance or material declarations with actual sample screening or chemical analysis. These reports would then become part of the larger compliance record. Specically lead termination verication can help monitor initial quality levels of suppliers. One company who started early reported non-compliant, leaded terminations on 40% of initial shipments received. Finally, closed-loop quality controls can reduce non-compliance risk over time. For example, if, in spite of a compliant BOM and other process controls, the manufacturer identies non-compliant parts during internal inspection, the company would generate a non-conforming materials report (NCMR). This report should trigger a corrective action process, which would be prioritized according to the overall risk associated with the part(s). Such reports would become part of the compliance record. The bottom line is this: A companys ability to demonstrate solid process controls supports a due diligence defense.
Tip #6: Involve your supply chain early and often.

Your ability to ship fully compliant products depends on your supply chain partners. Since the supply chain relies on you to dene the product (with all part numbers and material specications), clear communication is crucial. Without it, it may be dicult to avoid errors that will lead to non-compliance. In order to avoid excess and obsolete inventory, for example, manufacturers should share part changes early with suppliers and contract manufacturers. Non-compliant parts may become Non Cancelable Non Returnable (NCNR). In addition, keep in mind that re-tooling may require longer lead-times. Be certain to mark changes clearly as well. If manufacturers make changes to the AML because they need to replace non-compliant parts with compliant ones, then they must communicate these changes to the manufacturing oor or contract manufacturer. Since the new, compliant inventory cannot be mixed with noncompliant inventory, a part number change would be required. Some manufacturers, however, may try to avoid part number changes by ensuring that the non-compliant inventory gets used and that it isnt mixed with the new compliant parts. Regardless, manufacturers must enable suppliers and contract manufacturers to identify part number and AML changes clearly, for example through redlining.
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RoHS
Arena Solutions
Manufacturers should also record the RoHS transition. Once a manufacturer transitions the entire BOM to compliant status, it should track the rst unit (serial, lot, batch, or manufacturing date) as part of the change order. Some manufacturers may also attach a rst article inspection report to prove the unit was build to print, and hence, should be fully compliant. In order to ensure that manufacturers and their supply chain are and remain in synch for compliant manufacturing BOMs and subsequent changes, most manufacturers have established a common data management system which allows all involved parties to have access to accurate information, and to be able to contribute to change decision and implementation processes.
Tip #7: Think beyond RoHS.

Many companies are focused exclusively on making their product designs RoHS-compliant. But savvy manufacturers realize its not just about getting compliant now; its about living with compliance over the long term. Companies must therefore implement a system thats exible enough to accommodate new regulations like China RoHS, while also being robust enough to maintain ongoing compliance for RoHS Europe. Part of a long-term compliance strategy is to embed a compliance review within the design and ECO process. After all, products often undergo change after theyve been released to production. For example, manufacturers replace components with newer, more reliable models. Or they add a new, lower cost supplier to the AML. Yet changes to design and sourcing may aect compliance status, which is why ECO-driven reviews are vital. Companies should also ensure they have the proper support and systems to handle new regulations. RoHS is just the rst of several environmental regulations that will come into eect in the near future. Each will have its own requirements with respect to controlled substances, maximum concentration levels, and possibly markings. Furthermore, the current RoHS regulation may evolve and have dierent compliance assessment requirements based on additional data and evidence les. For that reason, a manufacturers data management system must be able to handle the added complexity of new requirements as well the large volumes of compliance evidence les. Being prepared for the future also means reducing sta dependencies. Within all organizations, stang changes are inevitable. Manufacturers must therefore ensure that the system used to capture compliance assessment history is broad enough to provide a structured audit trail for both internal use and external reporting. They dont want to be dependant upon a single individual who knows where all the documentation is stored.
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RoHS
Arena Solutions
Arena PLM Provides a Complete RoHS Solution RoHS is rapidly approaching. The sheer volume of data that manufacturers will be required to collect and monitor under the regulation is overwhelming. Moreover, manufacturers must develop processes and controls to allow them to demonstrate due diligence when required. Relying on paper-based processesor even an ERP/MRP systemto maintain and update the complex data can lead to wasted time, ineciencies, and costly errors. Dealing with RoHS successfully depends on having the right tool for the job. Using Arena PLM, producers can manage compliance-related data more eectively and minimize their risk of non-compliance. Arena Solutions enables its customers to get compliant, report on compliance, and in the long term, live with compliance. To nd out more about how Arena PLM can help your organization with RoHS compliance, please contact Arena directly at 1.650.687.3538. Or visit us online at www.arenasolutions.com.
References:
[1] 2002/95/EC RoHS; http://europa.eu.int/eur-lex/pri/en/oj/dat/2003/l_037/l_03720030213en00190023.pdf [2] DTI Guidance Document; http://www.dti.gov.uk/sustainability/weee/RoHS_Guidance_November05_Final.pdf [3] National Weights & Measure Laboratory, explanation of due diligence; http://www.rohs.gov.uk/content.aspx?id=7 [4] TAC Enforcement Guidance Document (unocial notes to Dec 10 meeting)
CORPORATE CONTACT
Arena Solutions 4100 East Third Avenue Suite 300 Foster City, CA 94404 P. 650-513-3500 F. 650.513.3511
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An Arena Solutions whitepaper

Documenting RoHS Compliance: Seven Tips from the Field

Documenting RoHS Compliance: Seven Tips from the Field

Documenting RoHS Compliance: Seven Tips from the Field

Documenting RoHS Compliance: Seven Tips from the Field

Tip #2: Centralize all product and compliance records.

Documenting RoHS Compliance: Seven Tips from the Field

Documenting RoHS Compliance: Seven Tips from the Field

Tip #3: Understand your full data management needs.

Documenting RoHS Compliance: Seven Tips from the Field

Tip #4: Document with reporting in mind.

Tip #5: Build due diligence into your key processes.

Documenting RoHS Compliance: Seven Tips from the Field

Tip #6: Involve your supply chain early and often.

Documenting RoHS Compliance: Seven Tips from the Field

Tip #7: Think beyond RoHS.

Documenting RoHS Compliance: Seven Tips from the Field

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