Five steps to preparing your company on a global basis.

RoHS. Mere mention of the European Union's Restriction of Hazardous Substances acronym has caused many sleepless nights.

Why? As the legislation dictates six hazardous substances, including lead in solder, must be removed in many electronics devices by July 1, many OEMs are faced with extreme challenges to meet this requirement. And more regulations from Europe and the rest of the globe are fast approaching.

Complying with environmental mandates creates complex business challenges for OEMs worldwide. Yet negative business implications await OEMs who fail to comply.

As the clock chimes on C-Day, the question is, How do OEMs prepare to meet the stringent requirements for Pb-free solder (RoHS 6 of 6) and solder and SnPb solder (RoHS 5 of 6)? How do they ensure business continuity and meet customer product expectations while looking for an advantage against competitors who have fallen behind in meeting the regulation?

While there is no single process for every company to become RoHS ready, some common practices apply to all OEMs and manufacturing partners.

Last September, Technology Forecasters estimated the one-time cost to comply with the E.U.'s RoHS requirement as roughly 2 to 3% of the cost of goods sold.¹ But the cost of not complying is incalculable. In addition to the risk of missed sales as a result of noncompliance, there is the risk of manufacturing products OEMs think will comply but actually fail. Neither outcome is desirable. In other words, failure is not an option.

In addition, many hidden costs of RoHS compliant materials may not be recognized by the customer. A huge percentage of parts are being phased out (end-of-life) and replaced with compliant parts. This is driving incremental resources for master data maintenance, part validation, RoHS verification and part data collection including chemical weight and manufacturer certificates of compliance. All this new information must be stored and readily retrievable, requiring robust environmental compliance information systems and tools.

Coordinating supply chain activities, associated planning and inventory are further complicated by minimum order quantities, stretched lead times, price variances, non-cancelable and non-returnable ordering constraints and material availability. The influx of new fully compliant material, RoHS 5 of 6 material, as well as existing noncompliant material will require incremental storage space and controls in the warehouse.

Another cost of compliance is delay of product. Delays affect compliant and non-compliant products. Originally, RoHS-compliant products experienced longer lead times due to specialized processes not being fully developed. We now are seeing a negative lead-time impact for products that were not converted to RoHS compliancy based on the markets being served. These residual inventories could end up as scrap as suppliers change component lifecycle status, issue end-of-life notices and demand/supply are switched to support only compliant material requirements.

Preparations

If OEMs are not already on the road to compliance, time is of the essence. But, depending on the product affected and the OEM's ability to either modify its supply chain to meet RoHS guidelines or partner with a company ready and able to support its needs, there is hope.

Solectron has provided Pb-free soldering for years, but only in select locations. Getting dozens of manufacturing facilities RoHS ready to assist customers as early as mid-2005 required tremendous organizational resources and commitment.

Most OEMs do not have dozens of manufacturing facilities globally, but many have sizable manufacturing footprints. Here are some considerations for OEMs and other manufacturers.

Create a cross-functional team. First, Solectron established an internal Environmental Compliance Team (ECT), as well as RoHS Regional teams. The teams provided direction and support in the development of many corporate specifications for Pb-free and RoHS policies, procedures and specifications. This was a global, cross-functional team comprised of engineering, materials and warehousing, operations, marketing and sales, IT, services and legal.

The Design and Engineering (D&E) team provided solutions for new and enhanced technologies to sites worldwide in support of customers' needs. The development and deployment process ensured the concept of common process could be achieved. Having a global engineering team is critical to help with front-end services, such as Design for Environment (DfE), to quickly transition OEM products and maximize product reuse and recycle value.

RoHS and other regulatory requirements cannot be managed using manual Excel spreadsheets and databases. Companies need to develop and maintain a robust environmental compliance tool. The system must have an intelligent data model that can manage large amounts of data, automatically calculate and roll up regulatory statuses and support procedurally based work flow. As built, product information must readily be available in response to inquires and audits from regulatory agencies.

Establish common processes for deployment. An important factor in RoHS preparation and readiness is the adoption of common process policy. The policy extends across all functional areas of the enterprise. The ECT is responsible for strategy, roadmap and definition of these coordinated policies.

For global contract manufacturers, it is essential to have all manufacturing sites follow a common Pb-free manufacturing process. Process validation helps to achieve a common baseline surface-mount assembly and rework process across all the sites. At Solectron, assembly guidelines were established from various development activities of multiple sites, along with the Pb-free manufacturing experience gained at Solectron Miyagi in Japan, one of the first company sites to build Pb-free products. All manufacturing sites are required to participate in this process validation activity to obtain corporate endorsement for Pb-free assembly.

The process and controls to manage materials of various types of compliancy (i.e., noncompliant, RoHS 5/6 or RoHS 6/6) must be determined during the design cycle. The specification of compliancy must be controlled throughout the supply chain from quotation to inclusion into a final product. This level of control requires a unique identifier, such as a new part number, throughout the process.

Manufacturing policy required only corporate-approved equipment be purchased for manufacturing operations, as detailed in the Approved Equipment List. Any exception had to be consulted, reviewed and approved by the D&E Equipment Technology Group. This enforced Solectron's direction for common processes, and eased the support for a unified equipment type.

By using approved equipment, Solectron had the same baseline for manufacturing at all facilities, especially during technical process development and product transfer. In addition, it helped eliminate redundancy during development as we could develop in one location and deploy to all sites more easily. It helped to optimize efficiency and effectiveness across the company.

While the processes involved in preparing for the mandate are extensive, the key to success is having ongoing communications as new legislation and issues arise. Substantial resources have been expended on collaborating with our supply base, obtaining compliancy and process related data. This information has enabled us to work with OEMs to develop product compliancy transition plans, roadmaps and solutions.

Focus on training. Training was one of the first requirements to be met. Rather than give the entire impacted employee base thermal shock, it was decided that several sessions of awareness training would be one of the initial steps. For several months in the summer of 2004, online conferences were held to explain RoHS and Pb-free compliance and to establish a timeline for success.

The first order of business was the initial development of the actual training package. An outside training company was hired and a training package for operators was introduced. Solder instructors from global and regional sites gathered at the company's headquarters for a "Train-the-Trainer" session. After much discussion and hands-on-training, it was ready to roll out to all the sites. By December 2004, all sites globally had J-STD-001 instructors training Pb-free for operators. Each site selected an individual to become the instructor covering areas such as IPC-A-610D (which contains Pb-free specifications), and starting in April 2005, master instructor training.

Invest. To minimize investment on capital, To minimize investment on capital, Solectron upgraded existing manufacturing equipment whenever possible, rather than purchasing new equipment built for Pb-free operation.

We also evaluated third-party upgrade parts to reduce investment, parallel to installing OEM upgrade parts. Third-party parts were made with titanium and no coating was required. Although third-party parts are cheaper, there is a risk involved. To minimize risk, a three-month on-site evaluation was implemented to determine reliability, tooling accuracy and manufacturer support capability. Regardless, whether the parts were OEM or third-party, once the upgrade kit was approved, a Notice of Approval was issued by corporate engineering through all Solectron sites to ensure management was aware of such authorization.

While upgrades were being implemented, we looked for next-generation equipment with advanced technology. We believe regular PCBs (up to 93 mm thick) can be processed by upgraded machines. However, there are several unknown factors in Pb-free soldering, such as PTH hole-fill of very thick and large PCBs in the wave-solder process.

To prepare for the future, we also set up an evaluation plan. For example, if complete PTH hole-fill of a thick PCB is required by wave solder, equipment requirements are established to search for the right machines, or often we develop new machines in collaboration with the equipment manufacturer.

In all, Solectron invested more than 200,000 man-hours and spent well into seven figures on equipment to ensure RoHS compliance.

Evaluation and certification process. It is one thing to have a process for preparing for Pb-free manufacturing, but the proof is in the product. In our approach, all sites were required to complete Solectron's Pb-free SMT and PTH test vehicle builds, advanced rework processes and associated laboratory analysis, which validated the sites' PCBA Pb-free soldering and rework capability. In addition, a 200-question RoHS self-assessment checklist examined training, materials and warehouse management, engineering and test capabilities, manufacturing process and control, and quality management systems. Solectron also performed a detailed, corporate on-site audit to view evidence of each site's RoHS preparations, controls, technical understanding and compliance readiness.

Every site was required to assign a site Pb-free RoHS leader to monitor and facilitate the entire RoHS implementation program. That person ensured the site was capable of assembling Pb-free RoHS product.

Most important, sites must comply and follow all requirements and directions provided by the corporate ECT. They must coordinate and communicate these requirements to their cross-functional teams, such as materials, warehouse, engineering, operations, quality, training, customer focus team - even customers - for compliance. This commonality of equipment and materials gives the basis for the massive deployment of Pb-free processes to the many Solectron manufacturing and repair sites.

Each manufacturing site must pass an assembly test to become qualified to build Pb-free and RoHS-compliant products. Two test vehicles were designed for this purpose: 1) an SMT test vehicle to prove printing, placement and reflow processes, including rework; 2) a through-hole test vehicle for wave soldering, selective soldering and through-hole rework. The SMT TV is used for reliability testing based on IPC-9701 and acts as a baseline for Solectron site qualifications.

RoHS best practices in practice. To illustrate how best practices have a functional impact, here is an example of how a global telecom equipment company is working with Solectron to prepare its supply chain and products for RoHS.

This OEM viewed RoHS as an opportunity to take a leadership position on the issue with compliant products. Solectron has been proactively supporting this global telecommunications OEM for meeting the RoHS requirements. This support is aimed at both the corporate and product group level, and includes providing overall guidance and counseling on methodology and processes. A dedicated team from Solectron and the company worked collaboratively throughout this endeavor.

At the corporate level, Solectron worked with the company to complete an RoHS assessment and analysis of the corporate parts data base (more than 50,000 parts) including identifying alternative parts where required. A dedicated team was formed and trained to convert all of the E.U.-bound cable assemblies and general use parts used across multiple product lines.

At the product level, Solectron's engineering teams have been working closely with the company to convert both mechanical assembly and circuit board designs to comply with the RoHS requirements. Our operations teams are engaged to ensure the new designs are re-entered into production and supply chains are primed to deliver materials. The requirement is to have all products within these areas complete before July 1.

The RoHS directive is not the only new European environmental law with which manufacturers must comply. As of August 2005, producers that put electronic products onto the E.U. market must comply with the Waste Electrical and Electronic Equipment (WEEE) directive. This law requires the management of post-consumer recycling of electronic products. The E.U. also passed the Energy Use Products (EuP) directive, requiring manufacturers to design electronic products to meet specific eco-design standards over the entire lifecycle of an electronic product. The EuP was passed in August 2005 and has a three-year implementation period.

More European environmental legislation is on the horizon - the Registration, Evaluation and Authorization of Chemicals directive (REACH). This legislation is still in draft form and if passed will shift the burden of proof to manufacturers to demonstrate that the chemicals used in products are safe. Manufacturers that ship over a certain amount of a chemical (i.e., greater than 1 ton) will have to register the chemicals used in a database with the European Chemicals Agency. Failure to prove that a chemical in a product is safe could mean that the product will be banned from the E.U. market, along with other penalties.

Manufacturers are also confronting environmental legislation in other regions around the world. On Feb. 28, 2006, China passed its own version of RoHS, called the Management Methods for Controlling Pollution by Electronic Information Products. This law will take effect on March 1, 2007, and while it prohibits the same substances as the E.U. RoHS, these substances will be banned in the products listed in a yet unpublished catalog of electronic products. The scope of China RoHS extends not only to the final product, but to the design and assembly process, plus parts and packaging material. It includes labeling and testing requirements for catalog products.

Japan passed legislation in January 2005 requiring the management and labeling of certain consumer electronic products that contain the six E.U. RoHS banned substances. This law will be effective on - July 1, 2006. In the U.S., California has its own electronic waste recycling act, and RoHS legislation is pending in the state legislature that would apply similar restrictions to electronic products as the E.U. More than 20 other states and numerous other countries, including Taiwan, Canada, Mexico, Australia and Korea, have or are in the process of considering some form of electronic waste legislation.

Manufacturers and their suppliers must be prepared to meet the requirements of environmental legislation around the globe. A knowledgeable workforce and skilled supply base on the recent environmental legislation is now critical to the manufacturing business model. The challenge that the industry must embrace is to seek, wherever possible, a unified approach to worldwide environmental regulations and standards. Uniform environmental standards will streamline compliance efforts, reduce compliance risk, increase efficiency and promote greater reduction of hazardous waste overall.

References

1. "What's RoHS' Cost?" Purchasing magazine, Sept. 29, 2005.

 

Dave Purvis is chief technical officer at Solectron (solectron.com).