Managing the environmental and regulatory performance of products is an increasingly complicated challenge for medical device manufacturers who face a myriad of requirements from regulators, consumers, and customers to control and report on the toxicity, safety, and overall environmental impact of their products. Today’s medical device products are more complex—both technically and commercially. They have more variants than ever before and are designed to support global markets. Along with complex products, many medical device manufacturers have evolved to become less vertically integrated, relying more and more on multitier, global partnerships for design and manufacturing. At the same time, the sluggish global economy and pressure from developing markets have forced manufacturers to adopt aggressive cost targets, continuously look for ways to reduce cost, and try to manage unpredictable cost drivers, such as wildly fluctuating commodity prices.

Fig. 1 – Environmental Regulation Growth.
All the while, manufacturing leadership faces exponential growth in product compliance obligations, including regional demands, scrutiny on conflict minerals, sustainability targets, and hundreds of new environmental regulations annually. The number of environmental requirements alone has grown significantly in recent years (See Figure 1)

Managing Product Risk, Compliance, and Performance

Designing great new products ontime, on-cost, and on-compliance requires a tremendous amount of coordination and communication, such as communicating supply chain preferences to product designers as early as possible to help guide design and part selection decisions. It also requires collecting a tremendous amount of detailed information from a multi-tiered supply chain. Supply chain teams are responsible for gathering the necessary part data and supplier information required by engineers to make design decisions.

One great example of supply chain data collection challenges faced by manufacturers is in the area of materials compliance. Traditionally, sourcing continuously bombards suppliers for disclosure updates so they can respond to ever changing government material compliance regulations like the European regulations REACH and RoHS, and conflict mineral regulation as new requirements are identified. Manufacturers must collect, process, and manage disclosures from potentially thousands of suppliers on hundreds of thousands of parts in order to understand the compliance status of both parts and product.

This process is inefficient for suppliers and manufacturers alike. Today’s manual data collection processes are not only cumbersome, inefficient, and costly; they can result in inconsistent data quality. For example, many compliance regulations are not static. They change with time as regulatory bodies add new restrictions and alter the requirements. Two regulations in particular, REACH and RoHS, are evolving rapidly and present manufacturers with significant challenges as they struggle to stay up to date with the mandates.

REACH continues to evolve as new chemical substances are added to the Candidate List Substances of Very High Concern (SVHC). The European law requires that manufacturers of products distributed in Europe report if a product contains more than a specified amount of any SVHC. RoHS evolves as exemptions are added, change, or expire. RoHS mandates that producers of certain categories of electrical and electronic equipment are not allowed to place products on the European market that contain six “banned” substances, unless they qualify for a valid exemption.

While managing product environmental and regulatory performance is critical for corporate strategy and product stewardship, it is also vital to ensure products can be legally sold in target markets. Non-compliance with regulatory mandates, such as conflict mineral regulation, REACH, RoHS, ELV, RRR, WEEE, Battery and Packaging Directives can result in blocked shipments, recalls, fines, and penalties.

Data Acquisition Strategy and Governance: Best Practices

Fig. 2 – Trends in data collected from suppliersource: Tech-Clarity, 2011.
Regulatory requirements are complex and dynamic, with new mandates being added, existing ones being altered, and exemptions expiring. Some determine compliance by straightforward maximum limits on restricted substances; others are logical requirements or requirements demanding unique calculations. In addition to government-mandated requirements, most companies have customer specifications and company standards that may be even more stringent.

In order to manage product regulatory and environmental performance, detailed component and material information is required. Looking at Figure 2, it becomes apparent that the majority of companies collect three different types of data: simple certificates of compliance, information on hazardous substances, and full material disclosure. These three types of data define the most common approaches to data collection and the amount of component detail collected. While each of these approaches has its advantages and disadvantages, it is important to understand that certificates of compliance and information on hazardous substances only provide a limited set of component data, with the objective of satisfying known compliance requirements that restrict the usage of certain substances, such as REACH and RoHS. Collecting full material data seeks to understand detailed information about every material and substance used in the component.

While the task of collecting the necessary information may seem daunting, especially when considering the number of parts and materials suppliers provide, there is no need to feel overwhelmed.

Manufacturers are implementing programs that require reporting on the material and substance content within their products. These top-level programs are increasing the availability of information up and down the supply chain by driving standards, creating awareness, and training suppliers to provide the required information. By leveraging these efforts and following the steps below, you can build an effective data acquisition strategy.