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Is Your Supply Base Changing Without You?

While RoHS doesn’t directly affect medical device manufacturers in the U.S., many component suppliers are changing their products to be in compliance with the regulation. What do you need to do to best address the changing supply chain for components in pre-existing products?

On July 1, 2006, a quiet but dramatically disruptive law went into effect that has wide-reaching business and environmental implications. While it formally impacts only products sold in Europe, its effects are global. It isn’t a plague but some might call it a pandemic.

It’s called the Restrictions of Hazardous Substances directive, or RoHS. It is one of many similar “green” initiatives being adopted and/or expanded in countries around the world. While medical devices are exempt from the European Union’s RoHS, there is far less certainty that medical devices will be so fortunate in other, similar directives. But even if medical devices remain exempt, we see an undercurrent of change in the supply base that could turn RoHS from a mere ripple for medical devices into a tsunami.

Why? Many of the materials and components found in medical devices are going green. As the supply base shifts, medical manufacturers must take the proper precautions and steps to ensure product protection and enhance competitive position.

RoHS ... And Beyond
Government bodies are adopting environmental regulation with rapid speed while cracking down on OEMs. In 2001, Sony spent more than $80 million to replace peripheral cables in over one million PlayStation game consoles because they contained more cadmium than permitted under the Netherlands environmental law, which closely mirrors the EU’s RoHS initiative.

Europe is just the beginning. Major global economies are implementing their own versions of RoHS, and the impact on medical devices is unclear. For example, China passed its own version of RoHS in February 2006—the Management Methods for Controlling Pollution by Electronic Information Products. The scope of China RoHS extends not only to the final product (as the EU RoHS does), but to the design and assembly process, as well as parts and packaging material and labeling and testing requirements for catalog products.

Additionally, more than 20 U.S. states and numerous countries have or are in the process of considering electronic environmental legislation. Given such global context and broad scope, medical device OEMs can no longer ignore these trends, hoping that exemptions will forever shield them from the effects of these regulations.

What Does This Mean?
RoHS is driving the “greening” of the supply base, and it has huge implications for medical devices, not the least of which could require complete product redesigns.

Indeed, the supply chain is inexorably moving toward compliant materials. This means that current components and materials are being phased out (end of life) and are being replaced with new green materials. Therefore, medical device OEMs will be faced with changes in their products, will have the challenge of determining the effect of these changes, and will have to demonstrate that they have no negative impact on safety and efficacy.

Clearly, medical device OEMs can not simply wait for the changes to be forced upon them by their supply chain; rather they must take a proactive approach and initiate a conversion of their products. This is a daunting task. To scrub an entire bill of materials (BOM) for each product to ensure compliance is a meticulous, time-consuming, and expensive process.

There are also unknown factors - reliability being most critical among them. For example, for lead-free solder, questions remain about long term reliability. Some research indicates that it could take five years
to fully understand the long term reliability impact.

Cost Of RoHS
At the risk of stating the obvious, there are substantial resources requirements medical OEMs need to consider as they migrate to environmentally safe materials.

In September 2005, Technology Forecasters estimated the one-time cost to comply with RoHS requirement as roughly 2-3 percentof the cost of goods sold. While there aren’t any firm cost estimates for the impact of the greening of the medical supply base, the financial impact will be greater due to re-validation and associated regulatory process costs.

For example, there are incremental resources required for detailed analysis of existing BOMs, for master data maintenance, for part data collection now including chemical weight and manufacturer certificate of compliances, and for RoHS part verification when needed. All this new information must be stored and readily retrievable requiring new robust environmental compliance information systems and tools.

Coordinating supply chain activities, associated planning, and inventory are further complicated by minimum order quantities, stretched lead times, price variances, non-cancelable and non-returnable ordering constraints, and material availability. The influx of new “green” material together with existing supplies will require incremental storage space and controls in the warehouse.

Finally, and most significant, is verification and validation (V&V) of the newly “greened” product. This usually involves a full regimen of V&V protocols to demonstrate continued safety and reliability.

Where To Start
It would be nice to have a magic wand we could wave to instantly comply with all current and pending RoHS regulations. But there is no such quick fix, no Merlin the Wizard who can help. However, in working with major medical device firms grappling with environmental issues, the biggest and most costly challenge is the revalidation process for medical devices where RoHS approved components have been integrated.

There are essentially two classifications to this challenge:
Removal of lead in printed circuit boards: While this involves data collection and parts management, the substitution itself is reasonably straightforward. However, revalidation issues can become significant (e.g., reliability), making the whole process highly complex, time consuming, and costly.
Removal of “5 of 6” substances: Here data collection is tricky because most OEMs and their suppliers do not really know if or where, for example, polybrominated biphenyls are used. However, revalidation tends to be a much easier task, because these components rarely have a significant functional role.

The level of government oversight of medical devices can equate to months in the revalidation process, not weeks since you’re not likely to be re-validating electrical functionality. In most cases, you will be revalidating reliability issues, which can take six months to a year per product.

A practical approach to address these issues would be as follows:
Instead of a full product BOM scrub, start with a pilot of a couple of typical and common products, which are representative of things like board density.
Run all studies with controls (i.e., side-by-side tests—original product vs. “green” product.)
Use the same number of products (and controls) used in original reliability studies for the non-compliant product.
Start, in parallel, a HALT (Highly Accelerated Life Testing)/HASS (Highly Accelerated Stress Screening) study, and a field life test study.
Based on the early HALT/HASS test results on the pilot units, decide whether to:
Grandfather all products beyond the pilot group (only if all results are positive)
Expand the tests to products beyond the pilot group
Conduct additional reliability studies/analysis
Continue the field
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