Zero Wait-State Agile EC MCAD Implementation Quick Start Presentation
Zws Seminar 20 Minutes
1. Oracle Agile Product Governance & Compliance Dries D’hooghe Senior Director of Product Strategy
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11. Design for Compliance/Green Process Flow Integrating Compliance in the Product Design Process ? Due Diligence New Rev or Version Manufacturers, Suppliers Corrective Actions SCM Content DB Internal DB Outsourced Data Gathering Measurements, Simulations Design Product Changes Quality DfX Procurement Shipping Marketing Sales Product Changes, Product Network Changes, Legislation Updates, New Customer Requirements IPC 1752 Custom Form New Design or Shipping Product Product Subassembly Component Supply Chain Design
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16. EU Laws Stimulate Global Cascade California: Prop 65 restrictions on materials (e.g., lead cables) SB20 and SB50 set recycling limits in 2005 SB423 harmonizes with RoHS January 1, 2007 EU: RoHS and WEEE China MII: WEEE in 2006, RoHS being finalized for 2006/2007 Korea: Industry agreements to limit certain materials and for products to be recyclable Japan: Recycle target active for household electronics and chemical label plans in draft; “Mitsubishi Green 150 initiative active” Brazil: Existing recycling targets for electronic products and batteries EU: EuP Program Aug 2007 — action required 2006 EU: REACH Program 2008+ votes in Nov 2005 Colombia — Draft National Hazardous Waste Policy USA — Federal- Restricted Substances for Hg Mexico’s Final List of Substances for Toxic Release Inventory and Final Rules on Wood Packaging Chile’s proposal for a National Pollutant Tracking System USA — Federal- Energy Efficiency (external power supplies) Clear need for sustainable, global, environmental compliance programs. Countries are rapidly implementing WEEE and RoHS requirements New European requirements (EuP, REACH) Recycling, battery and packaging requirements are being updated
26. Agile Product Governance & Compliance Solution Solution Capability Business Issue Business Benefits Reduce total solution cost and risk Reduce risk of non-compliance Reduce cost of design for compliance Increase revenues, comply to local standards Seamlessly integrate compliance information into transaction systems Design for compliance through optimized component selection Flexible BI framework flexibly addresses regulatory reporting requirements Compliance management framework provides complete solution Rapidly evolving compliance requirements Compliance essential for exploiting New Market opportunities Compliance initiatives consume considerable IT resources Non-compliance involves considerable risk
27. The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described for Oracle’s products remains at the sole discretion of Oracle.
32. PLM and the Risk of Non-Compliance Product Lifecycle Cash Flow Approval Volume Phase-Out Cash Flow Time Develop Proto NPI Next Generation Product Ramp to volume 3 Reduce cost & supply risk 4 Reduce service & warranty costs 5 Get to market faster 2 Develop Products “Right to Market” 1 Reduce cost and risk of non-compliance 6
No matter which industry a company is in, it and its products will be required to be compliant with regulations or customer prescribed requirements (codes of conduct, specifications, etc). In the past those requirements mainly targeted a company’s business processes, assets (e.g. plants) and financials. Lately, as the result of the highly distributed nature of the manufacturing and design chains of companies, more and more requirements are tied to the product a company sells (integrated product policy) in order to force a company to manage compliance within its product network.
It is not just about designing compliant products anymore. For more and more companies it is also about designing green products: products that help a company meet its environmental goals whether it is in being more eco-efficient, being perceived as an eco-innovator or whether it is to improve a product, a business reputation or brand. Agile PLM and Agile PG&C in particular can help a company to achieve these goals. From now on when we talk about compliance we mean: meeting a set of requirements that either because of regulations, because of internal company policies and objectives, or because of customer requirements.
As a result of compliance requirements companies are confronted with the following business challenges: Design for compliance: products need to be developed with compliance goals in mind (ease or disassembly and recyclability, energy consumption, presence of hazardous substances. Compliance is designed in into a product. Changes at later stages of the product development cycle to accommodate for compliance lead to slipped schedules, expensive rework and extra costs. Component compliance: compliant products cannot be designed without the knowledge of the compliance status of components and raw materials that make up the product. This requires companies to gather data in the form of data sheets, from component databases or through material declarations from suppliers. This data needs to be validates and a components’ or material’s compliance is then assessed for the purpose required by the company. Product compliance: 2 instances of the same product are never the same. A product can have many variants, or contain different components and materials from different manufacturers and suppliers. All these combinations need to be compliant before a product is truly compliant. Products can require the use of exemptions instead of being truly compliant. This introduces risk since exemptions typically have an expiration date or customers may not allow the use of exemptions. Product network compliance: In order to assess component or product compliance, data is required from suppliers in the product network sometimes multiple tiers removed from and unknown to the company. It is therefore important to communicate a company’s policy and requirements throughout this network through requests for declarations of conformance and to store these signed statements. This also allows a company to assess the capabilities of its product network to be compliant with its requirements. Compliance reporting: Customers and authorities will require a company to produce evidence of due diligence in terms of data gathering, data management, compliance assessment and non-compliance handling. On top of that, they will require a company to have documented business processes for each of these.
The message of this slide is: Compliance as a fire-drill exercise in Excel or stand-alone databases was okay for one legislation but is not sustainable in the current environment of many continuously changing regulations. Compliance needs to be baked into the product development processes. Companies need to develop a compliance strategy (choose where they fit on the compliance axis in the picture) as well as a compliance roadmap and keep revising these as regulations change.
Oracle Agile Product Governance and Compliance (PG&C) is a tool to that enables design for the environment and design for compliance, in particular substance based compliance such as required by legislations such as RoHS and REACH. To achieve this, PG&C supports a closed loop compliance corrective action business process as depicted in the next picture. A new design for a product or a component is introduced and requires to be validated for compliance. Different types of compliance require information at different levels within a BOM: some require information at the component level (or even the homogeneous material level within a component), some require information at the assembly or product level and some (e.g. corporate social responsibility) require information at a supply chain level. If that information already resides in PG&C it will be reused. PG&C can also massage data to distill more information out of data the you already have. E.g. if you receive a full or close to full material disclosure and want to evaluate compliance with a new substance that was not explicitly declared in the original declaration, then the system will evaluate that previous declaration and try to distill information about the new substance. In the full material disclosure case, that new substance would be absent. In a nearly fully disclosed declaration, the new substance could be hiding in the undisclosed portion and the system will assume it is equal to the undisclosed portion. If the information does not reside in PG&C then the system can receive information from data content providers or from other tools such as supplier portals or lifecycle analysis systems or from measurement systems through integration with those tools or services. PG&C also has built in supplier declaration management in case you want to have suppliers log into the tool directly and submit their declarations either in the UI, via Excel spreadsheet or via industry standard formats such as IPC 1752 or JGPSSI. Of course, users could perform these functions for a supplier in case you don’t want a supplier to directly access the tool. Declarations go through a customer configurable workflow that cleanses the data to match your naming scheme for substances through aliasing, validates the information for completeness (e.g. fully disclosed or not) and for end user acceptance before the system can officially use that information for compliance validation. This workflow capability can include sign off requirements. Once information is received, PG&C will use that information to assess compliance with customer configurable specifications containing threshold values and allowable exemptions. The built in compliance roll-ups (worst or best case across multiple declarations for the same part, worst or best case across the approved manufacturer lists a part belongs to and worst case in all the Bills of Materials and revs) will further roll up the information to assess the compliance status of all the BOMs and revs in the stored within the system. Queries and built in reports help a user to identify issues with BOMs and parts in the system so a compliance manager or quality manager can react and issue corrective actions (manage by exception) for instance via e-mail or via the Agile PQM module or using the normal quality processes you already have in place. Using these notifications engineers can use configurable and customizable design for x tools in PG&C to help them to identify root causes or perform what if analysis to improve upon their designs. Sourcing professionals could use those notifications to disqualify a part and search for a replacement etc. The engineers propose the necessary changes via Agile Product Collaboration, version or revision the design and submit it back to PG&C for final validation before releasing the design. Any time products change, customer requirements change, legislations change or your supply chain changes will you have to make an assessment of the impact on compliance. Oracle Agile Product Governance & Compliance can help with that. Since the system has built in history tracking, you will at any point in time be able to find out who or what provided the information, who accessed the information, who signed off on the information and how long the process took. This ensures a high level of due diligence. PG&C comes with an extensive set of out-of-the box queries and reporting. The tool has built in support for end users to create new queries and reports and has an extensive set of APIs and web services to help you integrate the tool in other systems.
In orange are WEEE and RoHS like legislations around the world. WEEE and RoHS are like an oil spill spilling over to the rest of the world. In red are new energy consumption regulations. Energy consumed by electronics in stand by mode or by power supplies in off mode is one of the fastest growing household electricity consumers. The other colors indicate other legislations. The summary message is: Everyone is creating WEEE and RoHS like legislations The EU is already implementing other legislations and everyone anticipates they will spill over to the rest of the world as well. But don’t loose track of existing legislations. They are being revamped as well.
China RoHS distinguishes between electronic information products (EIPs) and EIPs additionally listed in a catalogue. EIPs have labelling and disclosure requirements (green e if none of the 6 RoHS substances is in the product, otherwise the orange symbol regardless of EU exemptions. The 10 in the symbol indicates the environmentally friendly use period. If the orange symbol is used then the bottom table must be generated in Chinese and put in the instruction manual for the recycler. The packaging has its own requirements. For EIPs listed in the catalogue there will be a substance restriction in the future (max concentration values, catalogue itself and certification process are all still TBD).
Very similar to China RoHS, not a ban but a disclosure requirement
An interesting aspect of the EuP directive is that it creates a framework. Within this framework implementing measures can be adapted quickly within the need to create new legislations. The idea is to allow the industry to voluntarily achieve targets (the carrot). If they can’t then an implementing measure can be very quickly adopted with little notice to the industry (the stick).
This is a real customer example of Agile Services (SDO) putting a plan together for a customer to get to a sustainable compliance process.
Some of these logos are highly confidential. Do NOT share file. “ Here are our customers who have purchased PG&C licenses. Some of these customers are live (such as Extreme Networks and Spirent) and some are still in the early phases of deployment, therefore some are referenceable and some aren’t yet.” Approved by Dries D'hooghe 1/18/07. Referenceable Customers on PG&C: Harris Symbol Extreme Networks Spirent Powerwave ViaSat Conexant FreeScale DotHill Other Live Customers: Benchmark QLogic Funai Electric Quantum Quanta Radysis Brocade F5 Networks Have bought and planning to deploy: Dell Herbalife Tellabs Coherent Analogic Flextronics Foxconn Hitachi Verifone Fukuda Denshi Logitech Kyocera AMX Qualcomm Arima Bell Sports
The problem is not fines or criminal charges. The problem is the cost of exclusion from a market (e.g. the entire EU), the cost of stop ships, the cost of returns from your customers and the impact on your brand value.
Why manage compliance in a PLM system: Compliance is designed in in the same way that product costs and quality are fixated during the design phase of a product. The cost of making compliance related changes to a product are the lowest when the product is still virtual and stored in files and data management systems. As soon as a product becomes real (prototyping) the costs and rework related to compliance changes goes up exponentially and can lead to slipped launch schedules. Non-compliances in a shipping product are extremely expensive and can lead to stop ships, rejected shipments, returns, fines and exclusion from a market. The premise of PLM is to increase the product’s profitability by focusing on 1 to 5. Non compliance has the opposite effect. One non-compliance can completely kill the profitability of a product. PLM systems are the ideal systems to manage compliance in: they are the only systems that span all product lifecycle phases; ERP only knows about a product’s definitions when a product is close to production and authoring tools (such as CAD) only manage fragments of the product record.
This next section is optional. If your customer is familiar with the legislations you can skip it. We do not claim that PG&C supports these legislations out of the box. Depending on the unique customer situation, PG&C can be configured and extended (process extensions, custom reports, etc.) to support those legislations. The summary message is that: The pace of new legislations being introduced is speeding up, All legislations focus on the extended producer which corresponds mostly (95% of the cases) to the company whose logo is on the product or on the product packaging in order to deal with complex product networks. And to attach the regulations to the product instead of to a company or a plant (again in order to deal with the complex product networks and changing supply chains).
The fact that there are so many new legislations all focusing on the extended producer means that companies need to focus on the items on the next slide.
Legislation knowledge and interpretation to identify the legislative requirements for an individual company (no one-size-fits-all) based on: The type of products a company produces Structure of a company and its subsidiaries A company’s risk profile Just as what happened to become SOX or ISO compliant IT integration expertise Product compliance requires integration between multiple different systems in your organization at the process and data level. Oracle is uniquely positioned here with its AIA infrastructure. Data aggregation across products, product lines and company level in order to fulfill your reporting requirements Scalable flexible and powerful software Data storage and data management demands for compliance are high Substances content of a part at the homogeneous material level, full material disclosures Manufacturing parameters of a part Operational searching and reporting (substance where used, compliant part selection) Compliance roll-ups across all your parts, BOMs, configurations and revs. Oracle Analytics for aggregation and aggregated reporting Business process connectivity and integration Design for compliance must be tightly connected to the product design process in the PLM system to guard compliance behind the scenes while engineers are designing (pending revs, picking only compliant parts etc) Product compliance is more than just a check box exercise during a rev or product’s release process. Component and material compliance data In order to assess product compliance you need compliance information for parts, materials and
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