matrixone material central

Materials Compliance for Green Product

Development-Implementation Framework

MatrixOne Confidential

Business Challenges Compliance Framework Implementation Framework


Heightened consumer discrimination and environmental Heightened consumer discrimination and environmental consciousness consciousness

Increasingly demanding regulatory frameworks for product Increasingly demanding regulatory frameworks for product approvalsapprovals

Increasing concern over certain materials and total Increasing concern over certain materials and total substance banssubstance bans

Lifetime responsibility and liability placed on producersLifetime responsibility and liability placed on producers Tighter controls on disassembly and recyclingTighter controls on disassembly and recycling


Satisfy legal and regulatory requirement and avoid liabilities Drive improvements in product design Respond to inquiries from customers, product recyclers

and other stakeholders For suppliers, enhance relationships with OEMs

or

throughout the product development processis a for Companies to be able

to do Business

! European End of Life Vehicle Directive" Waste Electrical and Electronic Equipment Directive#$ Restrictions on the use of certain Hazardous Substances Directive

Critical for Companies Producing Products that Must Adhere to These Regulations

Material Composition Information Allows Manufacturers to:

The European End-of-Life Vehicle (ELV) directive, which from July 2003 requires vehicle manufactures to remove heavy metals such as lead and mercury from vehicle components.The directive also dictates ELV material recovery or re-use rates of over 85% of thewhole vehicle from 2006 and over 95% from 2015.IMDS reports and data exchange formats are used to communicate the material content and recycalibity between suppliers and OEMs.

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The RoHS Directive & placement into theEU market of new electrical and electronic equipment containing more than designatedmaximum allowable levels of lead, cadmium,mercury, hexavalent chromium, polybrominatedbiphenyl (PBB) and polybrominated diphenyl ether (PBDE) flame retardants,

'()*+,,-.RoHS works in conjunction withthe EU WEEE Directive. Manufacturers will need to ensurethat their products, parts and components comply with RoHS in order to be distributed and sold in the EU. Reference RoHS Directive 2002/95/EC.

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The WEEE Directive applies to a wide rangeof electronic and electrical products. WEEE encourages the collection,treatment, recycling and recovery ofwaste electrical and electronic equipment.WEEE makes producers responsible forfinancing most of these activities.Effective (()/*+,,0 and /)*

+,,-. Reference: WEEE Directive 2002/96/EC, as amended by 2003/108/EC.

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Effects the Automobile Industry1 !: End of Life Vehicle Directive

- July 1, 2003. Mandates that manufacturers provide detailed reports of restricted substances for vehicles sold in Europe

- January 1, 2006. Recyclability mandates increase from 75% to 85%

Effects the Electrical and Electronics Industries

!Hazardous Substances

July 1, 2003

!95% Recyclable Jan. 1, 2015

!85% Recyclable Jan. 1, 2006

" Aug. 13, 2005

" Recycling TargetsDec. 31, 2006

1 " : Waste Electrical and Electronic Equipment Directive

- August 13, 2005. Establishes producer responsibility for recycling and disposal of electrical goods- December 31, 2006. EU country-specific recycling targets must be achieved

1 #$: Restriction of Hazardous Substances Directive- July 1, 2006. No lead (e.g. lead-based solder), cadmium, mercury, hexavalent

chromium and PBB/PBDE flame retardants

#$July 1, 2006


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Loss of Market Share- EU is the United States biggest importer for high-tech. $51B in 2001 or

24% of exports- Western Europe accounts for nearly 30% of passenger cars

Penalties and Fines- ELV: Production Part Approval Process (PPAP) can delay components

not clearly in compliance- WEEE, RoHS: each EU country to adopt penalties applicable to violations

of domestic laws

Delays and Bans- Products are and will be increasingly delayed and refused at entry points

Japan and China are enacting similar laws and the US are considering similar laws

1 AMR Research, 2 OESA, 2002 and Fortune, 2000, 3 Allen and Overy 2003


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Business Challenges and Consequences Compliance Framework Implementation Framework


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WEEE ImperativeWEEE Imperative-- 1998 6m Tonnes increasing 5% annually1998 6m Tonnes increasing 5% annually-- Average life of products < 2 years and decreasing Average life of products < 2 years and decreasing

WEEE Directive WEEE Directive -- Producer responsibilityProducer responsibility-- Common collection systemsCommon collection systems

Key milestones for complianceKey milestones for compliance-- Producer responsibility Producer responsibility 13 Aug. 2005 13 Aug. 2005 -- Substance Ban (RoHS) Substance Ban (RoHS) July 2006July 2006

Key benefits of WEEE:Key benefits of WEEE:-- Reduction in environmental impact, costs and risks of extractionReduction in environmental impact, costs and risks of extraction, ,

production, disposal and recycling production, disposal and recycling heavy metals and heavy metals and halogenated substances, hazardous waste emissions, halogenated substances, hazardous waste emissions,

-- Improvements in product design, performance and safety, Improvements in product design, performance and safety, extended lifecycle reextended lifecycle re--use and reliabilityuse and reliability


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Regulatory Requirements- Support RoHS, China RoHS, Weee and other

US Federal, State or international environmental regulations.

- Generate required reports for government and customers

Product design and development- Analyze BOM for materials and substance

content during design (i.e. Materials recycled content, reuse and recyclability; and substances for regulatory compliance, disassembly of components and parts)

Procurement- Request material data from suppliers- Qualify parts and components to meet

regulations- Identify exemptions (i.e. Lead as an alloying

element in steel - 0,35 %, aluminum - 0,4 % and as a copper alloy - 4 % lead by weight)

- Multi-sourced components Manufacturing

- Identify Lead-free components


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Dec 2003:- Draft Joint Industry

Guide(JIG) finalized and approved by EIA, EICTA, JGPSSI membership


Material Lists- Level A (banned or restricted)- Level B (sustainability)

Reporting Thresholds for Material Lists Data Format

- Set of Data Fields- Examples of Material Declaration Forms

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Supply chain tool to obtain material composition data from suppliers.

Why is this data important?-Ensure products do not contain banned/restricted materials.-Purchasers want to know about the presence of other materials for:-Recyclability-Sustainability targets/goals-Green marketing


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Proof of ComplianceA producer shall, at the request of the enforcement authority, submit within

28 days of the date of the request, technical documents or otherinformation showing that electrical and electronic equipment placed on the market complies with the requirements of the regulations

Subject to the following provisions of this regulation, in proceedings against any person for an offence under regulation 15 it shall be a defence for that person to show that he took all reasonable steps and exercised all due diligence to avoid committing the offence


Due DiligenceA person shall not be entitled to rely on the defense provided by

paragraph(1) by reason of his reliance on information supplied by another unless they show that is was reasonable in all the circumstances for to have relied on the information, having regard in particular

(a)To the steps which he took and those which might reasonably havebeen taken, for the purpose of verifying the information; and

(b)To whether he had any reason to disbelieve the information

RoHS Product Compliance Record RetentionUp to 10 years after a product is placed on the market sufficient to prove

that the product did not contain materials that had more than the permitted levels.

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OEM or Customer Requirements Every PPAP Submission Design, Specification or Material Changes Using Alternative Materials Manufacturing methods or Production Processes Change Production Transfer or Introduction of new Production

Equipment Suppliers of Products or Services changed Quality Problems resulting in Delivery Holds Production Equipment lie idle for 12 months or longer Upon Request

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Plan and Define Program- Design Goals- Reliability and Quality Goals- Preliminary BOM- Preliminary Process Flow- Listing of Special Product and Process Characteristics- Listing of Compliance Standards- Listing of Customer Substances and special materials- Management Plan

Product Design and Development- Design FMEA- Design for Manufacturability, Assembly and

Compliance/Environment- Design Verification- Compliance Verification- Design Reviews- Prototype Build-Control Plan- Engineering Specifications- Engineering Drawings- Material Specifications- Drawings and Specifications Changes- New Equipment, Tooling and Facilities Requirements- Special Product and Process Characteristics for Compliance- Gages, Testing Equipment Requirements- Team setup, commitment and management support- Sub-contractor Build- Supplier Build


Business Challenges and Consequences Compliance Framework Implementation Framework


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Integrated Device ManufacturersIntelIBMAMDNational SemiconductorTexas InstrumentMicronCypress

System ManufacturersCompaqDellCiscoHP

Fully Vertically Integrated OEMsIBM

Compaq/HP

GE

Philips

Texas Instruments

Motorola

FujitsuNCR

Samsung

Siemens/Infineon

Toshiba

AdaptecAlteraBroadcom

Design Software CadenceSynopsys

IP Designers MIPSArtisan

Foundry TSMC SilterraUMC Chartered Semiconductor

70s 80s 90s 00s

Contract ManufacturingSolectronSCIJabil

Branded RetailersCompUSAOthers to enter

Linking the Extended Enterprise

B2B

Fabless Design

B2B

B2B

B2B

B2B

eCollaboration can facilitate communication between IP houses, designers, foundries, customers.

eCollaboration can facilitate communication between IP houses, designers, foundries, customers.

MentorIntercomm

Test and PackagingSTATS, UTAC, Carsem, Unisem, NS, Anam, Fairchild

Test and PackagingSTATS, UTAC, Carsem, Unisem, NS, Anam, Fairchild

ConexantAgereXicor


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Manufacturer

Retailer

Importer

- Proof of Guarantee- Quantity- Contract with Recycler

Electrical Appliance Register (EAR)

Coordination Body

Recycling Agent


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Compliance Consultancy 3rd Party Compliance Test

Product Compliance

Declaration Service Data Processing Service

Compliance Declaration

Registration, Reporting, Contract EAR Registration IMDS Reporting Recycler Contract Service


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Reduce Unnecessary Design Iterations, Improve Part Reduce Unnecessary Design Iterations, Improve Part Selection/Reuse and Procurement, Improve System and Selection/Reuse and Procurement, Improve System and Product Configuration, Improve Supplier CollaborationProduct Configuration, Improve Supplier Collaboration

OEM Tier 1

Customer

OEM Tier 1

Customer

ExportReports

Analyze, Report, Iterate

ThresholdsRecyclability

Analyze, Report, Iterate

ThresholdsRecyclability

CustomersRequirements

Supplier Supplier

Internal Parts, BOMS, Products

ProductCentral

EngineeringCentral

SourcingCentral

SupplierCentral

ImportImport

Materials ComplianceCentral


ExportFile

XML, TXT

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Supplier submits reported material

information

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Thank YouThank You

matrixone material central

Documents

electronic equipment

reference rohs directive

life vehicle elv directive

electrical products

vehicle components

thewhole vehicle

materials compliance

certain materials