© COPYRIGHT 2006 AGILE SOFTWARE CORPORATION. Staying on Top of New Environmental Regulations in Electronics Dries D’hooghe

© COPYRIGHT 2006 AGILE SOFTWARE CORPORATION.

Staying on Top of New Environmental Regulations in

ElectronicsDries D’hooghe

Stanford Supply Chain Forum COPYRIGHT © 2006 AGILE SOFTWARE CORPORATION Slide 2

Agenda

Introduction What’s Coming - Emerging Legislations

China

Japan

EuP

Reach

Preparing Today

Integrating Compliance in Your Business Processes


About Agile Software

NASDAQ: AGIL

#1 in Customer Satisfaction

#1 in Time to Business Results

Global leader in high tech, med device & SMEEmerging leader in CPG & life sciences

Collaborative Visualization, Outsourcing Enablement,

Compliance,and Product Cost Mgmt

1,200+ PLM & 10,000 Visualization 1,200+ PLM & 10,000 Visualization Customers across Multiple Customers across Multiple

IndustriesIndustries

Customer SuccessCustomer SuccessLeadershipLeadership

Leader in Business-ready Leader in Business-ready Enterprise PLM SolutionsEnterprise PLM Solutions

World-class Global PLMWorld-class Global PLMDelivery Capability Delivery Capability

PLM Growth LeaderPLM Growth Leader

HQ: San Jose, CA

North AmericaEMEA

Asia Pacific

Global R&DSan Jose, CA & Canada

Suzhou, ChinaKarlsruhe, Germany

Bangalore, India

725+ Employees

Fastest Growing PLM CompanyFastest Growing PLM Company


Blue Chip Customer Success

Across Product-Driven Markets

MedicalDeviceMedicalDevice

IndustrialEquipmentIndustrialEquipment

Electronics & High TechElectronics & High Tech

ConsumerPackaged

Goods

ConsumerPackaged

Goods

Aerospace& DefenseAerospace& Defense

AutomotiveAutomotivePharmaceuticalsPharmaceuticals


What’s Coming?


Companies are facing a fundamental shift in business that demands a sustainable,

global environmental system

California: Prop 65 restrictions on materials (e.g., lead cables) SB20 and SB50 set recycling limits in 2005SB423 harmonizes with RoHS January 1, 2007

EU: RoHS and WEEE legislation requires action in 2005

China MII: WEEE in 2006, RoHS being finalized for 2006/2007

Korea: Industry agreements to limit certain materials and for products to be recyclable

Japan: Recycle target active for household electronics and chemical label plans in draft; “Mitsubishi Green 150 initiative active”

USA—Federal- Restricted Substances Overview

Brazil: Existing recycling targets for electronic products and batteries

EU: EuP Program Aug 2007—action required 2006

EU: REACH Program 2008+ votes in Nov 2005

Joint Industry Guide A,B, C:International Material Reporting Requirement

COP-1 of the Stockholm POP’s Convention

Colombia—Draft National Hazardous Waste Policy

Basel Convention: Emerging Nations

USA—Federal- Restricted Substances for Hg

Mexico’s Final List of Substances for Toxic Release Inventory and Final Rules on Wood Packaging

Chile’s proposal for a National Pollutant Tracking System

USA—Federal- Energy Efficiency (external power supplies)

Source: PRTM


Global Environmental Requirements

Countries are rapidly implementing RoHS requirements: China Japan Various U.S.A. states (California) Korea - Combines RoHS, WEEE, and energy using products Australia

New chemicals directives EU-REACH chemicals directive

But energy efficiency, recycling, packaging, and battery requirements are also being updated.


China RoHS

China RoHS effective date March 1, 2007 for six standard substances

Labeling and information disclosure requirements on components

Product scope, certification process, and maximum concentration values still to be determined

Testing/Certification by Chinese labs only

Hazardous/ toxic substance

Pb Hg Cd Cr6+ PBB PBDE

Name of the Component


Japan RoHS / J-Moss Label

Changes to Law for Promotion of Effective Utilization of Resources

Not a ban for the 6 RoHS substances but labeling and declaration for certain products required personal computers (including CRT

and LCD displays), air conditioners, televisions, microwave ovens, clothes dryers, electric refrigerators, electric washing machines, and copying machines

Requires the orange “content mark” be applied if substances are used (unless exempt)

The green mark is voluntary and is more of an eco-label

If substances are used (even if covered by exemption), then material declaration is required


Australia

Covenant System for packaging. Each company is required to develop an “Action Plan” for reducing and recycling packaging


Energy-using Product (EuP) Directive

Member states must bring into force laws, regulations, and administrative provisions by August 11, 2007

Provides EU-wide rules for “eco-design”

Framework Directive does not introduce directly binding requirements for specific products, but defines conditions and criteria for setting such requirements (consumption of resources; emissions; waste generation; environmental impact of noise, vibrations, radiation and EMF; ..)

Through subsequent implementing measures, requirements regarding environmentally relevant product characteristics (such as energy consumption) can be set and, once adopted, they can be adapted quickly

The generic product lifecycle


REACH – Registration, Evaluation and Authorization of Chemicals

REACH aims to gather environmental data on 30,000 chemicals that have been on the world market, most without any significant toxicity testing.

REACH would apply not only to bulk chemicals, but also to chemical substances in "articles," which term is broadly defined to include electrical and electronic products. Articles must have a registration dossier that lists ingredient, how the chemicals are used and includes an assessment of toxicity

Registration dossiers are evaluated by authorities who can restrict or make the usage of a chemical dependent on an authorization.

Substances in products manufactured or imported in the EU. Responsibility for generating data and assessing the risks of uses of chemicals is placed on the producer or importer.

Requirements depend on properties, uses, and volumes of chemicals produced or imported (starting at 1 tonne/year/manufacturer)


What Does It All Mean?


It Means … Making compliance a core part of your product development process

design for environment, design for disassembly, design for reuse, … Not a one-time high effort data collection exercise in Excel, Access or stand-

alone compliance tools focused on a particular regulation Product compliance road-map

Staying up to date on regulations Trade associations, in-house legal team, consultants, legislation tracking

services

Developing a corporate environmental strategy in line with your business objectives Lobbying? Alone or through trade group? Review agreements with partners and suppliers? Communication plan to mediate negative PR?

Don’t-Ask-

Don’t-Tell Yes/No

Environmentally-Compliant Follower

Sustainable Developmen

t

Corporate Social

Responsibility

Source: PRTM


Integrating Compliance in YourBusiness Processes


PLM and the Risk of Non-Compliance

Product Lifecycle Cash Flow

Approval Volume Phase-Out

Cas

h F

low

Time

Develop

Next Generation ProductRamp to

volume 3

Reduce cost & supply risk

4

Reduce service & warranty costs

5Get to market faster

2

Develop Products “Right to Market”1

Proto NPI

Reduce cost and risk of non-compliance

6


Overview of Environmental Compliance Processes

GatherGather

StoreStore

ActAct

AnalyzeAnalyze

Supplier DeclarationManual Data CollectionImport from Content Providers

Compliance Data Management

Product Compliance ValidationDesign for Environment, Disassembly, Reuse

Compliance Corrective ActionChange Collaboration


PLM Repository

Product

?

Closed Loop Compliance Process

Design

CorrectiveActions

Suppliers

ProductChanges

Component

Quality Mgmt.Comp. Eng.

SCM

Content Providers

LegislationUpdates

IPC-1752

Product

Product Rev B

ProcurementShippingMarketing

Sales

Due

Diligen

ce

DfX


Other Processes Touched by Compliance

New part request process Part selection process Compliance evaluation of proposed product

changes New product introduction process Design for X reviews Sourcing processes Costing Supplier qualification and score carding


Summary

Sustainable environmental compliance requires a business framework across multiple systems and business processes.

Environmental compliance is not an afterthought. It touches the core of your company.

Be prepared and flexible as new regulations emerge.

© COPYRIGHT 2006 AGILE SOFTWARE CORPORATION.

Thank you for attending this eventDries D’hooghe

Director of Product Management and [email protected]

Agile Software Corporation6373 San Ignacio Avenue San Jose, CA 95119 Phone 408.284.4000 Fax 408.284.4002

Documents

© COPYRIGHT 2006 AGILE SOFTWARE CORPORATION. Staying on Top of New Environmental Regulations in Electronics Dries D’hooghe