On July 1, the European Union’s (EU) Restriction of Hazardous Substances (RoHS) directive went into effect, barring companies from manufacturing electronic equipment containing certain hazardous substances. As of July 1, 2006, RoHS requires original equipment manufacturers (OEMs) and other companies to remove six hazardous substances from their products, including lead, mercury and cadmium. For companies failing to comply, this means facing a potentially serious economic hit – bans on their products from the European market, lost revenues, heavy fines, and even possible jail time.
While the RoHS mandate presents companies with a significant challenge – essentially requiring the redesign of numerous products – many companies have spent the last few years developing project teams, employing new processes and designs to achieve compliance by the July 1 deadline.
Roadmapping is a powerful business practice that companies use to be forward-looking instead of reactive to changes such as regulations like RoHS.
However, a significant number of manufacturers have failed to adequately plan and prepare for the RoHS deadline, instead hoping for a reprieve or pushback – even though they’ve been aware of the directive and its deadline since 2003. According to industry predictions, up to one-third of electronic equipment manufacturers globally were not on target to achieve compliance by July 1.
"We've been warning our clients about this slow-motion train wreck for several years, and have been dismayed by how good companies, with good people, have failed to adequately address it," stated the team of Gil Friend (Natural Logic), Pamela Gordon (Technology Forecasters Inc.) and Michael Kirschner (Design Chain Associates) in their recent Wall Street Journal article "Wishing Won’t Make It So."
And despite being an EU mandate, RoHS affects companies outside of Europe. According to Gordon, president of Technology Foresters Inc., "about 80% of the name-brand North American Electronic product companies" will be affected by RoHS, she said. "Even if some companies don’t sell to Europe, they probably sell parts to companies who sell to Europe or they sell to individual companies who have their own environmental policies similar to Europe."
For example, as of July 1, the original version of Palm Inc.’s Treo 650 smartphone is no longer being shipped to Europe because it does not meet RoHS standards. Palm is one of the first companies to reveal that one of its products is barred from the European market, though a company spokesman said a successor to the 650 is in the pipeline and should be available by end of year.
RoHS is only the beginning of environmental directives not just in Europe, but globally. Similar laws will soon be implemented in the United States, with 27 states currently developing legislation, and California adopting the RoHS directive on January 1, 2007. In the meantime, companies like Sony, Hitachi, Toshiba, Hewlett-Packard and Nokia have issued their own lists of banned substances. Needless to say, these restrictions are not going away, and neither is the problem of ill-prepared companies struggling to comply with the initiatives after it’s too late.
Clearly, the RoHS compliance problem these companies are facing was completely avoidable and preventable, as evidenced by the many companies who were proactive in implementing new manufacturing processes necessary to comply with the directive by the deadline. These companies were able to successfully transition to the new regulations by developing an enterprise-wide regulatory strategy and executing it in a timely manner.
One practice successful companies employ to avoid compliance issues and apply regulatory strategies across the company is roadmapping. Roadmapping is a powerful business practice that companies use to be forward-looking instead of reactive to changes such as regulations like RoHS. By mapping product, market and regulatory information over time, companies can gain visibility into timely planning information, enabling them to be more competitive and proactive in their decision-making capabilities.
For instance, by roadmapping regulatory compliance, companies can understand the impact on their products, supply chain, and subsequent business units and departments. In the case of RoHS, achieving compliance calls for almost a complete redesign of certain products, so companies need to understand which components need to be replaced and act accordingly.
Additionally, major compliance initiatives like RoHS require communication with internal stakeholders, customers and suppliers in order to create a transition plan and execute it successfully. Roadmapping helps foster cross-functional communication and collaboration, and align teams around a unified plan of record to ensure timely, appropriate adjustments are made to stay competitive in the market.
Roadmapping software applies rigor and discipline to roadmapping practices by providing a solution that brings product, market and technology planning information into one single system. Unlike simplistic product planning tools, software provides a disciplined approach for collecting and analyzing planning information in a single, centralized database. With roadmapping software, companies can track and manage dynamic planning information, enabling faster response to changing market requirements as they occur and adapting product plans accordingly.
In order to keep up with increasing requirements for environmental protection and energy reduction in the upcoming years, a roadmapping process is key to a company’s long-term financial, competitive and regulatory success. To learn more about how roadmapping can help your company gain visibility into the future, improve team communication, and enable more informed planning decisions, click here to read our article Ten Reasons to Share a Roadmap
