The cost is substantial for any product environmental compliance program... A 2008 study regarding the cost of RoHS compliance estimated that the average cost per company was $264,000 to achieve initial RoHS compliance and another $482,000 for annual maintenance. For REACH it is considerably higher. One study estimates the overall cost ranging from €2.8 billion to €12.8 billion over the next 11 years, with a one-time initial cost increase of 6-20% per product. When not complying is not an option, part of your compliance budget should be invested in Product Environmental Compliance (PEC) Software. Here are the top six reasons to make that investment.
1. Governmental Requirements: Compliance with environmental regulations and directives is the law. Some of this legislation contains inherent language that, when faced with compliance, says “so prove it!” REACH’s Article 5 “No data, No market” principle states that substances shall not be manufactured or sold in the European Union unless they have been registered in accordance the relevant provisions. If your company is targeted for audit, inspection, or review by any enforcement body and you have a PEC software solution in place, you will be able to respond quickly and effectively with an audit-worth trail and comprehensive due diligence activities within your supply chain, and reduce the business impact of regulatory pressures including penalties and enforcement.
2. Client Requests: GCG receives a constant stream of inquiries from customers trying to respond to their own client requests for compliance verifications. The type of response and response turn-around time can mean retaining or losing your customers. With the right PEC software or service provider for software reports, you will be able to respond quickly to client requests. Virtually all of the largest electronics companies have their own list of restricted substances. These lists often contain many more substances and lower thresholds than are governmentally restricted. Increasingly, they are incorporated into Green Procurement programs. The right PEC software will enable you to respond to whatever substance of concern lists and reports your clients may request from you.
3. Supply Chain Transparency: By increasing your awareness of what’s in your supply chain and reducing the presence of restricted chemicals in your products, you will be able to establish not only an environmentally compliant supply chain but also a socially acceptable supply chain. Establishing and maintaining this supply chain transparency is the new “socially responsible” supply chain paradigm. Supply chain transparency is supported by the Dodd-Frank Wall Street Reform and Consumer Protection Act of July, 2010 (the “Conflict Minerals Law”) and California’s Supply Chain Transparency Act, passed in September 2010.
4. Internal Efficiency: Achieving and maintaining product environmental compliance is a full-time job. Managing BoMs and responding to requests in your supply chain is just part of this job that is tedious and frustrating. Using a tool as powerful as MDW-ES PEC software will greatly assist your internal staff in establishing and maintaining compliance, managing BoMs, managing your internal MOC (materials of concern) list, and will save exponential amounts time communicating within your supply chain.
5. Cost Reduction: Myriad cost reductions and savings can be realized by using PEC software including: reducing the cost of outside professionals for chemical testing, third-party lab work and legal expertise; reducing your toxicity-related financial exposure; reducing your overall time to compliance, cost, and staff commitments. Most importantly is avoiding the cost of business interruptions and penalties of non-compliance. RoHS2 verbiage includes mandatory recall of all non-compliant products and goes even further by stipulating that distributors are required to notify authorities of non-compliant products.
6. Increased Competitive Advantage: To gain competitive advantage, your approach to compliance should meet or exceed industry and customer expectations by integrating social, ethical, and environmental concerns together with the usual measures of revenue, profit, and legal obligation. By effectively establishing and maintaining compliance, you will be re-assured that your products will stay on the shelves and in your customer’s hands when they are proven to comply with environmental regulations. MDW-ES is the lowest cost, most robust PEC software on the market today with an established track record of assisting customers with PEC compliance for over 8 years . MDW-ES can be easily installed in days vs. months, and with minimal training your staff can be using MDW-ES to comply with governmental requirements, respond to customer requests, and protect its customers and market share. With all these benefits, how can you not afford it?
“What if I just can’t afford it?”