Guest Post: Managing Compliance in the Electronics Industry with Cloud ERP

Manufacturing Insights Blog

By Matthew Littlefield, president and principal analyst, LNS Research

With the growing number of challenges surrounding the contract manufacturing space, excelling in the electronics industry can be difficult. Companies are pressured to seamlessly produce and introduce high-quality products for consumers while also accounting for shrinking operating margins, competitive global pricing, supply chain complexities and numerous other issues – one of the thorniest being regulations.

Regulations and the increasing need to capitalize on the global supply chain are some of the most significant concerns for electronics manufacturers. Not only do companies need to adhere to local regulations, but they also must meet national and industry-specific mandates that affect business processes, materials selection and product handling.

Let’s discuss a few of the major regulations in the electronics industry and the enabling technologies being used to manage them.

Regulations in Electronics

In the past decade, there have been momentous changes in the realm of electronics regulations, specifically relating to the use of hazardous substances and waste. Two main directives have come out of the European Union: Restriction of Hazardous Substances (RoHS) and Waste Electrical and Electronic Equipment (WEEE).

RoHS: Restricts the use of six hazardous substances in electronic and electrical equipment products, reducing environmental impacts.

WEEE: Aims to reduce “e-waste” pertaining to the electronics industry by setting collection, recycling and reuse standards

Enabling Technologies

Along with the evolution of the electronics industry’s regulations, technology has matured to facilitate tracking, analysis and reporting capabilities for manufacturers. Two focus areas for companies are in traceability and document control.

Traceability/Genealogy: To effectively abide by directives such as RoHS and WEEE, companies must be able to track activities, both upstream and downstream. Traceability functionalities allow contract manufacturers to monitor material selection and handling from the supply chain through the shop floor. It is also important to be able to share this compliance information with trading partners.

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Document Control: By automating previously manual processes, companies are implementing paperless document control solutions to centralize and standardize compliance management. When process data, SOP data and pieces of quality and audit data are captured in an automated document control system, the cost and complexity of compliance is greatly reduced.

These functionalities are often offered as part of an integrated Cloud ERP. They are playing a critical role in the management of business processes to comply with regulations. As a result of these automation capabilities, contract manufacturers are reducing operational risks and experiencing improved business performance.

Matthew Littlefield founded LNS Research in August of 2011 and is now President and Principal Analyst. Matthew’s personal coverage areas include the topics of Enterprise Quality Management Software, Manufacturing Operations Management, Asset Performance Management, Sustainability, and Industrial Automation 2.0.