“Green” product - how worldwide enviromental lesgislation has dramatically altered the technology landscape in the US

Abstract

The passage of the European Union (EU) Restriction on the use of certain Hazardous Substances (RoHS) Directive, Waste Electrical and Electronic Equipment (WEEE) Directive and other worldwide environmental legislation has dramatically altered the competitive landscape in the US. Beginning July 1, 2006, for example, companies may no longer ship most electrics into the EU that contain certain restricted substances. This type of legislation has created: (1) Major disruptions and long cycle times in the electronic components supply chain (2) Quality and reliability issues due to significant changes in materials and manufacturing processes (3) Increased costs-scrap costs due to noncompliant inventory, increased cost of new compliant inventory which utilizes more expensive raw materials, increase in engineering design, verification and analysis time (4) More complex customer relations - Customers are requesting ldquogreenrdquo products before manufacturers are able to convert and verify long term reliability. Customers are also requesting ldquogreenrdquo products in areas not affected by the legislation (such as in monitoring and control applications). On the opposite end, high reliability customers do NOT want ldquogreenrdquo products precisely due to the quality and reliability issues they might face. (5) More complex supplier relationships - Suppliers have had to manage dual inventories of compliant and noncompliant parts and have had to set up elaborate documentation and verification systems to support the legislation. Suppliers and manufacturers have had to work closely together to share information and plan appropriately. (6) A shifting of purchasing away from US companies towards Asian/EU companies that are better prepared for the legislation. The legislation has driven significant changes to old ways of doing business and has forced quick adaptation and modification of processes to support the new global economy. This paper illustrates a case study of how National Instruments has navigated and adapted to these new requirements.