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Reducing the Cost of RoHS Compliance

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For small to medium size CMs, the cost of RoHS compliance can be high—5.2% of annual revenue, by some estimates. This figure factors in the cost of higher priced materials (solder paste and laminates), higher cost of manufacturing, increased administration and testing, as well as a lengthier exemption process. But a growing number of CMs are now learning how to manage those costs and, in some cases, reduce it. 

Lessons Learned 

The initial 2006 rollout of the RoHS directive was disruptive. CMs had to introduce--and invent--completely new processes, often times making costly mistakes. But now, nearly a decade later, CMs have had time to iron out these processes. Though complying with RoHS is still considered to be painstaking and costly, understanding the costs of compliance as part of a long-term strategy is essential to making it work to your advantage.

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Thorough BOM Scrub 

In terms of a smooth and cost-effective RoHS conversion path, a thorough BOM scrub is the key. This will allow you to determine which RoHS compliant components are available, whether obsolete components can be replaced by RoHS compliant components, and whether any through-hole components can be replaced by SMT components. Performing the scrub early will allow you to visualize the most logical and least costly conversion path. In addition, you'll be able to assess where cost can be reduced by updating the original design.

Component Consolidation Strategy 

As through-hole components are now less commonly used--and as many are being deemed obsolete--some CMs have used the RoHS directive to transition to more SMT designs. SMT designs require fewer components and therefore less time and labor spent on assembly. Using more SMT components can both improve the quality of your boards as well as the costs of labor. 

Avoid the Costs of Non-Compliance

Some CMs tend to underestimate the costs of compliance failure, which can be the most paralyzing. If these requirements are neglected or delayed, your company could be exposed to number of risks, such as short- and long-term revenue loss, fines and fees, requalifying, and an overall loss of market share. This is usually a result of a company having to withdraw a product from the market, rework a product, or reintroduce another design to meet the directive's standards. In other words, avoiding the costs of non-compliance boils down to a long-term investment in proper infrastructure, materials, and processes (which could initially cost more) in order to avoid potentially devastating losses.