Dr. Christina  Schröder - Principal PLM Consultant, Enterprise PLM Solutions EMEA

What does the Conflict Minerals regulation mean?

Conflict Minerals has recently become a new buzz word in the manufacturing industry, particularly in electronics and medical devices. Known as the "Dodd-Frank Section 1502", this regulation requires SEC listed companies to declare the origin of certain minerals by 2014. The intention is to reduce the use of tantalum, tungsten, tin, and gold which originate from mines in the Democratic Republic of Congo (DRC) and adjoining countries that are controlled by violent armed militia abusing human rights. Manufacturers now request information from their suppliers to see if their raw materials are sourced from this region and which smelters are used to extract the metals from the minerals. A standardized questionnaire has been developed for this purpose (download and further information). Soon, even companies which are not directly affected by the Conflict Minerals legislation will have to collect and maintain this information since their customers will request the data from their suppliers. Furthermore, it is expected that the public opinion and consumer interests will force manufacturers to avoid the use of metals with questionable origin.

Impact for existing products

Several departments are involved in the process of collecting data and providing conflict minerals compliance information. For already marketed products, purchasing typically requests Conflict Minerals declarations from the suppliers. In order to address requests from customers, technical operations or product management are usually responsible for keeping track of all parts, raw materials and their suppliers so that the required information can be provided. For complex BOMs, it is very tedious to maintain complete, accurate, up-to-date, and traceable data. Any product change or new supplier can, in addition to all other implications, have an effect on the Conflict Minerals compliance status.

Influence on product development 

It makes sense to consider compliance early in the planning and design of new products. Companies should evaluate which metals are needed or contained in supplier parts and if these could originate from problematic sources. The answer influences the cost and risk analysis during the development. If it is known early on that a part could be non-compliant with respect to Conflict Minerals, alternatives can be evaluated and thus costly changes at a later stage can be avoided.

Integrated compliance management 

Ideally, compliance data for Conflict Minerals, but also for other regulations like REACH and RoHS, should be managed in an integrated supply chain system. The compliance status is directly visible across the entire BOM at any part level and for the finished product. If data is missing, a request to the supplier can be triggered right away without having to switch to another system. The entire process, from identification of the relevant parts, requesting information, handling responses, data entry, to compliance calculation is fully covered end-to-end while being transparent for all stakeholders.

Agile PLM Product Governance and Compliance (PG&C)

The PG&C module extends Agile PLM with exactly this integrated functionality. As with the entire Agile product suite, PG&C can be configured according to customer requirements: data fields, attributes, workflows, routing, notifications, and permissions, etc… can be quickly and easily tailored to a customer’s needs. Optionally, external databases can be interfaced to query commercially available sources of Conflict Minerals declarations which obviates the need for a separate supplier request in many cases. Suppliers can access the system directly for data entry through a special portal. The responses to the standard EICC-GeSI questionnaire can be imported by the supplier or internally. Manual data entry is also supported. A set of compliance-specific dashboards and reports complement the functionality

Conclusion 

The increasing number of product compliance regulations, for which Conflict Minerals is just one example, requires companies to implement an efficient data and process management in this area. Consumer awareness in this matter increases as well so that an integrated system from development to production also provides a competitive advantage. Follow this link to learn more about Agile's PG&C solution