Manufacturers need to develop strategies to cope with emerging environmental rules. They should keep an eye toward designing products for recycling, says a report from Gartner Inc. of Stamford, Conn. Twenty three countries worldwide have enacted take-back laws for electronics. Gartner expects seven more countries to pass new take-back legislation in the coming five years. With the growing emphasis on creating environmentally clean products that are ready for recycling, manufacturers need to view green readiness as a competitive factor that can help differentiate products in the marketplace.
With new environmental laws coming from China and other countries in 2007, Gartner recommends that companies should standardize their products to meet the most stringent legislation and anticipate green concerns to avoid production problems. The firm paints a grim picture for companies that do not develop clear environmental strategies. “Failure to transition products on time can lead to high inventories and dramatic price cuts, similar to the effect we saw in Western Europe as the RoHS came into affect,” says Meike Escherich, principal research analyst at Gartner. “Non-compliant components will be gradually removed from the global supply chain, which will force manufacturers to discontinue products that contain them.”
Escherich notes that PC manufacturers in particular need to design their products green. Non-compliant components will soon be phased out by component manufacturers, making it more urgent that new PCs be designed green. “Not far from now, non-green parts will be assigned end-of-life status and green legislation will come to impact every single PC manufacturers,” says Escherich. “The worldwide market should expect to see longer lead times, part shortages and rising prices for non-compliant parts over the next two years.”
She advises producers to plan inventory and put through orders now before component changes affect a company’s ability to make products. She notes this is especially true for European manufacturers. Also, companies need to be prepared to provide their compliance. “European organizations should be prepared to specify products free of lead and other hazardous substances in requests for proposals now, and we recommend that global and multi-regional companies plan for an orderly transition to compliant products in 2007,” says Escherich. “”Good record-keeping is important to demonstrate compliance to enforcement agencies.”
As manufacturers develop their strategy to cope with the move to environmentally compliant products, they should also take into consideration the need to design for easy recycling. Gartner recommends that equipment manufacturers look for ways to go beyond the requirements of green legislation. The report notes that “designers need to allow for the most effective mans or recycling their products,” since “consumer awareness will allow for market differentiation based on green features.”