How Companies Use IT to Keep Up with Chemicals Laws

How Companies Use IT to Keep Up with Chemicals Laws

Monitors - CC license by Flickr user ginnerobot

 Complying with regulations on chemicals and other substances can be costly to businesses, but non-compliance can be even more costly.

"Do not let compliance or non-compliance hold you up or take revenue from you," said Kimberly Knickle of advisory firm IDC during yesterday's GreenBiz.com webcast, "How to Drive Business Value from Product and REACH Compliance."

REACH - short for Registration, Evaluation, Authorization and Restriction of Chemicals - is a European Union regulation that requires companies to register chemicals they use and declare certain substances in their products. A related E.U. law is the Restriction of Hazardous Substances (RoHS) directive, which restricts the use of lead, mercury, cadmium and other substances.

Knickle said that the average cost of RoHS compliance for companies is $500,000. But non-compliance, on the other hand, can cost companies plenty from lost revenue, wasted inventory and damage to their brand and reputation.

By complying, and even going beyond what is required by regulations, companies can reap benefits by providing safe products, maintaining what markets they are in and gaining access to new ones, handling risks in their supply chains, protecting their brands and meeting corporate sustainability standards, she said.

A key component, she said, is a comprehensive IT-based compliance system. One single program or system can help a company in a number of ways, like ensuring all of its divisions have access to the same information and keeping more accurate records.

"One thing that companies have also achieved here is faster compliance with new regulations, and that can really be about creating a competitive advantage as well," Knickle said.

Joe Stainbrook, senior product environmental engineer for electronics component maker Molex, explained how a system from business software company SAP, the sponsor of the webcast, has helped his company.

Molex, which manufactures its components in 16 different countries and sells to customers around the world, uses the SAP Product and REACH Compliance program. All of the company's locations have access to it, and it clearly shows which products comply with certain regulations.

"We as a component supplier, we need to focus on substance restriction," he said, noting that pressure is coming both from regulations and from customers with their own requirements. "A lot of our customers want to be proactive, want to be ahead of legislation, want to market their products as being greener than others."

The webcast, "How to Drive Business Value from Product and REACH Compliance" will be archived for one year and is available for free viewing.

Monitors - CC license by Flickr user ginnerobot

 

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