Top 3 Complications of Meeting Compliance
Meeting compliance regulations cost manufacturing companies nearly $20,000 per employee, or between $250,000 to $1.5 million USD per year.
While this cost may be huge, the cost of failing to meet compliance standards is much larger. When a company fails to comply with RoHS or REACH regulations, they may be subject to hefty fines (starting at $15,000 euros) as well as their product being recalled or completely removed from the market.
Before hiring a compliance management consulting team or spending money on costly software, it is important to understand the key challenges and steps towards meeting compliance regulations.
- The first and foremost challenge is collecting information from suppliers.
- Keeping up with evolving changes requires frequent data collection to have updated information.
- Knowing which regulations apply to your company within a certain market.
1. Collecting Information from Suppliers is Laborious
The first challenge is to collect information from suppliers. This data is not readily available nor is it consolidated. Some data documentation may not even be correct or validated by the appropriate quality management team.
Because the data is owned by the supply chain, tracking this information requires contacting hundreds of suppliers and their suppliers. There are also policies and guidelines to define which documents are valid sources of information. For instance, the chemical materials declaration for a Certificate of Compliance must be signed by a quality manager.
2. Constantly Evolving Data Requires Frequent Updating
EU RoHS updates constantly change policies regarding use of banned hazardous materials. Major updates can include the addition of a new banned material, while minor, yet important, updates can govern the amount allowed for use in a certain medical device.
REACH, on the other hand, updates every 6 months. These changes include adding new Substances of Very High Concern (SVHC) to the REACH list. Companies must meet stringent deadlines for reporting the import of chemical substances.
3. You Must Comply with Regulations Within Your Product’s Market
You need to know which regulations are related to certain markets. If the target market is China/Asia, Europe, or United States, the regulations differ.
- European Market – Requires compliance with EU RoHS, REACH SVHC & SCIP compliance, Waste of Electrical and Electronic Equipment (WEEE), and Persistent Organic Pollutant (POP) regulations.
- United States Market – Certain states enact regulations based on EU RoHS Directive, Californian RoHS Law, New York’s Electronic Equipment Recycling and Reuse Act, and the federal Toxic Substances Control Act (TSCA).
- Asia – China, Taiwan, South Korea, Ukraine, and Turkey all comply with their version of RoHS
Understanding these regulations allows for varying levels of flexibility in product design depending on the region in which the product is being sold.
Solution: Using Software to Access Compliance Data
Buying compliance automation software can help companies quickly research parts that fit compliance regulations without the need to hire a team of specialists or consultants. For instance, SiliconExpert’s BOM Manager and Compliance Module is powered by a team of data scientists gathering the appropriate documentation from suppliers and validating them. The four key areas that compliance software databases should cover are:
- Chemical substance data
- RoHS & REACH compliance
- Conflict mineral reporting
- SCIP database information
SCIP (Substances of Concern in Articles as such or in complex Products) is a database of SVHCs much more extensive than REACH. While the REACH database only requires a single material declaration at the parent product level, SCIP requires extensive amounts of information from the supply chain at every level of manufacturing: fabrication, testing, assembly, and more.
SiliconExpert directly contributed to the development of the SCIP database and actively updates data on SVHCs.
How to Avoid False or Unvalidated Compliance Information
Automated compliance solutions software is not a fool-proof solution. Many compliance solutions incorporate a type of data message exchange platform for the customer to communicate with the suppliers directly in the form of a survey. Or the data is compiled through a third-party organization. These systems still require a lot of manual work from the manufacturer to gather the necessary compliance data.
SiliconExpert’s Compliance Module combines a native database of over 1 billion parts with a team of compliance data analysts, collecting and validating documents for chemical substances, RoHS & REACH, conflict minerals, and SCIP data. To learn more about the Compliance Module, contact us below for a free trial:
- Report from National Association of Manufacturers (NAM), a typical American manufacturing company with at least 100 employees paid $9,083 per employee in regulatory costs in 2012: https://www.nam.org/wp-content/uploads/2019/05/Federal-Regulation-Full-Study.pdf
- RoHS Reach Violations and Fines: https://www.getenviropass.com/rohs-reach-pop-violations/
- RoHS and Electronic Equipment Recycling Laws in the United States: https://www.essentracomponents.com/en-us/news/news-articles/the-importance-of-rohs-to-us-manufacturers
- SCIP Database Launched with SiliconExpert contribution: https://www.siliconexpert.com/blog/scip-database-is-ready-for-use/