"Up to Snuff," Feature Article, March 2005

up to snuff

Companies find that "product lifecycle management" can mean steering through the regulatory tangle of their business.

by Jean Thilmany, Associate Editor

These days every manufacturer seems to have one agency or another looking over its shoulder.

Whatever your company makes, you can be sure there are regulations governing what it can contain, how it must be distributed, or how it may be disposed of.

With this in mind, some engineering software vendors have found a new use for a technology they are marketing. They've fitted their product lifecycle management systems to help engineers and manufacturers track the sometimes Byzantine regulations and codes to which products must adhere.

These systems can provide reports that companies can present to governing agencies to show compliance, while the software can alert engineers to regulation changes.

Most engineers know PLM software today as a tool that helps them design in tandem across a distance, issue bills of material, and find the latest design updates.

Increasingly, engineering companies are using the tracking and organizing technology to ensure that products will meet pertinent governmental regulations, said Dries D'Hooghe, director for product strategy and marketing at Agile Software Corp. in San Jose, Calif.

Agile's PLM software includes a recently introduced product governance and compliance module that keeps track of environmental regulations and policies that affect an engineering company's product. Third-party vendors track all policy changes the engineering company requests and they load that information into the system.

Agile implemented the compliance module last year, after it found an industry need. The vendor traditionally made systems that focused on the engineering product design and on the handoff of designs from engineering to manufacturing.

Other vendors also make products to guide engineers through knotty compliance issues. The PLM system released by UGS of Plano, Texas, for example, can be set to includes lists of hazardous materials that engineers need to avoid as they design.

Compliance is a key word for the future, said Eric Sterling, vice president of automotive marketing for UGS. "We're working with a lot of customers in this area," he said. "It's an emerging area, this type of management."

Every PLM system lets engineers reuse designs. Once created, a model of a part can be stored in a company's PLM system and reused in a future assembly. If that part has been shown to comply with regulations and standards in its first incarnation, the UGS system lets an engineer check to ensure that it still meets those rules, Sterling said.

FEELING THE SQUEEZE

According to D'Hooghe of Agile, the automotive industry is particularly affected by changing legislation, because many automakers are now working to ensure that their vehicles comply with the End-of-Life Vehicle Directive passed by the European Union in 2000. D'Hooghe said that a few big-name automakers and other manufacturers are using the Agile PLM system to track compliance, but they declined to be interviewed for this article.

That law aims to redirect, from landfill to recycling,
the approximately 8 million tons of waste generated by the disposal of vehicles in European Union countries each year.

The directive specifies the materials and chemicals that can be included in particular amounts in automotive parts. It sets target dates by which each part of the directive must be met. By 2015, about 90 percent of a vehicle must be recyclable, according to the Automotive Industry Action Group of Southfield, Mich. AIAG is a nonprofit consortium of companies involved in the worldwide automotive industry.

Any manufacturer or importer that sells vehicles to the European Union must comply with the directive by reporting a great deal of information about materials, parts, and systems. A vehicle is a complex compendium of parts compiled from a multitude of suppliers, but the automaker is responsible for the final product.

And the End-of-Life Vehicle Directive is only one of the rules and regulations in Europe. The EU's Waste Electrical and Electronic Equipment Directive sets environmental targets for the amount of hazardous materials that can be contained in electrical and electronic equipment.

Another directive seeks to restrict the use of hazardous substances. Electrical and electronic equipment sold in the European Union after July 2006 can't contain more than certain levels of lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls, and polybrominated diphenyl ethers.

Although these are EU-enacted laws, their arms reach well beyond Europe to encompass any manufacturer that wants to sell its products in EU countries.

This is where a PLM system capable of tracking compliance can make all the difference, D'Hooghe said.

"Regulations are getting more stringent and fines are going up," he said. "Manufacturers needed a way very early in the product development process to make sure that what they're developing won't make for compliance problems down the road."

A SERIES OF LISTS

Vehicle and electronic manufacturers aren't the only ones that are using the PLM technology for this purpose, D'Hooghe said. "Whatever the product is, you can be sure there's a whole set of regulations around it today,"
he added.

Environmental constraints have an effect on many industries, including life sciences, consumer packaged goods, and food.

"Anything that contains additives, any food that's
genetically modified is particularly regulated," he said. "For a product to be labeled healthy, slim, or green, manufacturers have to show it meets a number of standards."

To assess whether their products are compliant with whatever code they aim to meet, a company needs a record of exactly what constitutes the part. For an electronics manufacturer, this would be a breakdown of the components inside. For a food producer, it's a list of ingredients.

A part that meets standards and regulations the first time around can be stored in the PLM system from UGS and reused in later assemblies.

An automaker keeps not only a list of all the supplied parts, but requires that suppliers list the materials each supplied part is made of, according to AIAG. Vehicle manufacturers must build a chain of information from raw materials all the way through final vehicle assembly. D'Hooghe said his company's PLM system tracks all this information.

Acceptable parts are listed in the system and can be included with a part design for record-keeping purposes. The PLM system lets the engineer ensure that supplied parts to be used in a vehicle meet end-of-life and other pertinent regulations.

Still, even a seemingly simple concept like a compliant part isn't easy to get one's arms around, said Joel Kroon, Agile's director of automotive product strategy. The end-of-life legislation cracks down on some substances, but many others are subject to ever-changing environmental thresholds, Kroon said. A part that's compliant one day might not be so the next because standards are constantly being updated. "You can imagine how difficult this can be for everyone," Kroon said.

STOPPED AT THE BORDER

And you have to stay on top of it. Sony found that out the hard way. In December 2001, Dutch officials seized more than 1.3 million imported Playstations before they could enter the country. The Dutch government feared that the game machines contained too much cadmium in the console's cables, according to the Reuters news agency.

Under European Union rules, no goods containing more than 0.01 percent cadmium can be imported. A Dutch Ministry for Environment spokesman said at the time that large concentrations of cadmium were banned in the Netherlands to prevent it from entering the food chain, in line with European Union policy.

The cables that were examined contained values of cadmium varying from three to more than 20 times the allowed value, according to a government spokesman.

Sony commented at the time that it believed its products were within the limits required by law and that the Dutch regulators had been in error. Nonetheless, the company put new cables on the products.

In its latest incarnation, PLM helps engineers track up-to-the-minute
environmental regulations that affect their products.

And even companies that don't export their products outside the United States need to concern themselves with legislation. States may have different environmental regulations in place that manufacturers must be aware of.

In September 2003, California enacted its e-Waste Collection and Recycling Act, which requires manufacturers to phase out dangerous substances in equipment by 2007. The law also requires retailers to add a disposal fee of as much as $10 to cathode-ray-tube-based products sold in California and sets rules on exporting to-be-recycled electronic gear to other countries.

Each color monitor contains, on average, four to five pounds of lead, which is considered hazardous waste when disposed of, according to the U.S. Environmental Protection Agency. Computers also contain other hazardous materials, including mercury, cadmium, and hexavalent chromium.

"Tracing all this legislation is a huge undertaking," D'Hooghe said. "Companies don't have a comprehensive view on what type of compliance is called for in different places."

Sometimes an engineer can't simply call up a CAD file for a part, because the company gets that part from a supplier and incorporates it into the final product. In these cases, it's vital to ensure that those parts meet vital standards. Once again, the PLM system can help, D'Hooghe said.

"Designers don't have a view anymore of how a product is developed," D'Hooghe said. "They don't have a view of all the materials and components in a product. That stuff is made somewhere else."

A company can link to a supplier's PLM system to ensure that the parts a supplier uses will meet company specifications. The supplier lists the parts in the supplied product and the original equipment maker can then include the supplier's records with its own records.

Ensuring that engineering products meet the plethora of existing codes and laws is a perplexing and complex task that's only going to get harder. Staying on top of these ever-changing rules is the name of the game, and vendors are outfitting their PLM systems to ensure that engineers can do just that.