News and New Products

Extending a Helping Hand

By Ann Steffora Mutschler -- Electronic News, 11/22/2005

As the deadline for achieving compliance with the Restriction of Hazardous Substances (RoHS) regulation is fast approaching, companies throughout the supply chain are stepping up to lend a hand in partnering with their customers with the expectation of a flurry of activity once 2006 arrives.

At Fairchild Semiconductor, Mark Rioux, VP of global quality and reliability, explained that while internal efforts began as early as 2000, once the company learned of the legislation, it has been a mixed bag when it comes to customers getting on board with the regulations.

“Many customers are well aware and working to meet deadline, but there are some that are less informed and we work with them to try to educate them as much as possible,” he said.

For instance, because automotive manufacturers have an exemption for now, they tend to be less concerned than others companies just for that reason. However, there will come a time soon that they will be forced to consider the ramifications as their suppliers make the switch to lead-free, or other modifications, and parts become scarce. The minority of customers that are not aware of RoHS tend to be very small companies, Rioux recalled.

“For the most part, Fairchild’s customers are familiar and aware that we are in a worldwide economy and even though it may not affect them right now, it will eventually,” he noted.

The next year is expected to be a challenging time, particularly for those customers that have not approved lead-free products. “As time goes on, it will be more difficult to obtain those parts. Fairchild will be fully converted to lead-free by the end of this year; we will still carry leaded parts, but only to select customers,” he explained.

“Our motivation in offering this is to continue the good products supply to customers. There are customers that want to stay on leaded products and we have let them know that as long as customer demand supports it, we can supply those parts, but they need to understand price will increase over time because it will not as cost-effective going forward,” Rioux added.

In addition to education, Fairchild provides a number of services to assist its customers become lead-free. First, the company allows the use of unique part numbers for customers that require it – even if the supplier has not changed its part number.

Second, special part labels are offered so that just looking at the device it is obvious whether it is lead-free.

Further, Fairchild has instituted certain lookup tools so that customers can determine if a specific device has been converted to lead-free and what the packaging options are. This is either self-service by the customer via a Web tool, or they can provide an order list and a Fairchild representative would provide the needed data.

At electronic component distributor Avnet, Jim Smith, senior VP of warehousing and distribution worldwide for Avnet Logistics, said the company started its project about two years ago. “At that time, we were not exactly sure what the needs would be – for customers, for our IT systems, for the suppliers. We did know it would require data, education and a crisp supply chain to meet customer demand,” Smith explained.

IT systems were modified to accept new product information, which was just the start. “We then had to get the data [from the suppliers], which has proven to be a challenge. We are still in the process of gathering the data because some suppliers are still in the process of modifying products,” he continued.

Inside the data acquisition activity, a wrench of sorts was thrown into the works. “A lot of suppliers said they were not changing part numbers. That has created a new challenge in the supply chain,” Smith noted.

From a tactical perspective, Avnet’s first exercise was to filter new and existing data, clean it up and bring it up-to-date with RoHS-compliancy and lead-free information. Smith said Avnet will continue to scrub the data until the “Y2K of RoHS is behind us,” the VP remarked.

During this internal process, Avnet recognized that its customers were trying to understand what the issues were, which spurred an education campaign with all existing customers, holding panel discussion and distributing educational DVDs and materials – and many customer visits.

Also in an effort to let its customers and partners know how the environmental regulation work was progressing, Avnet commissioned a study of 53 suppliers including local, regional and global subcontractors, and has since followed up with a series of reviews for current usage.

And similar to Fairchild, Avnet’s Promiere services will scrub customers’ bill of materials, and provide a roadmap on how to switch non-compliant parts and provide design engineers with necessary data to migrate.

In this way, it seems that electronic component distributors are uniquely positioned to assist customers in such a large effort.

“We play in a huge customer base and as such we have access to a broad base of customers and products. It is our job to stay on top of prevailing technologies with robust, scalable, online systems. We are in a unique position to provide data,” Smith added.

While fellow distributor Newark InOne is similarly positioned, president Paul Tallentire believes the global supply chain is going to change because very few vendors can have products for each market that meet every specific environmental regulation.

“Consolidation of legislative requirement has to happen or we will have a fragmented industry,” he explained.

Newark started its lead-free initiative from the basis that everyone will be affected, building on the work done at its parent company Premier Farnell.

From the 400-page-long RoHS legislation, Tallentire said Newark has condensed and simplified the rules to make clear the impact to customers.

Newark’s Web site is also a repository of data and information regarding RoHS – from status of key vendors, American legislation, manuals to assess the impact of legislation on a customer’s business to a technical manual written by the company’s European engineers that instructs how customers should proceed with compliance, and how to determine their responsibility. All of this data is updated bi-weekly.

The company also strives to make it simple and transparent when a customer deals with us, Tallentire explained. “Even if a manufacturer is not changing its part number, we will change it. As a result, we have had to build 75,000 extra storage spaces in our warehouse.”

Then, on its Web site, Newark uses a special green icon to indicate RoHS-compliant status.

Like Fairchild and Avnet, Newark also provides a service free of charge to scrub a bill of materials that defines the level of compliance, and where it is not, gives an alternative.

And while all these modifications have put a strain on logistics and IT systems – mostly for the benefit of customers, suppliers recognize RoHS is just the tip of the iceberg.

“This is only going to get more complicated. We must anticipate needs in the supply chain and be in the forefront of offerings in this area,” Avnet’s Smith said.

At the same time, Avnet recognizes this is yet another area for customers to look to them. “It’s all about the execution. A lot people can claim they have the data. Customers should choose the partner that can execute the strategy.”

Fairchild’s Rioux agrees. “There’s no doubt that environmental regulations are on the increase worldwide. China’s new regulations closely mimic European standards, and certain U.S. states are developing regulations — eventually growing countrywide.”