May 17, 2020

Celestica Healthtech on medical manufacturers and RoHS planning

Supply Chain Digital
Supply Chain Technology
Supply Chain
Freddie Pierce
3 min
Medical devices, like the artificial heart, face new regulations
Written bySimin Bagheri (pictured, right), M.A.Sc., P.Eng. the Customer Engagement Lead for the Engineering Services division at Celestica Healthtech...

Written by Simin Bagheri (pictured, right), M.A.Sc., P.Eng. the Customer Engagement Lead for the Engineering Services division at Celestica Healthtech

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The Restriction of Hazardous Substances (RoHS) directive, which aims to eliminate a number of hazardous substances from electrical and electronic equipment, came into effect for consumer device manufacturers in Europe back in 2006.

Now, the legislation is ready to come into play for medical device manufacturers.

By July 2014, any medical device manufacturer looking to sell their products in Europe will have to chain their supply chain processes and comply with RoHS. Similar legislation is on the way in other regions, including North America.

With less than a year left to comply with the law, engineers and operations managers need to assess their organization’s RoHS readiness. In addition, senior management needs to demonstrate their commitment to the new regulations and help their teams move the transition plan along smoothly.

The silver lining for medical device OEMs are the many lessons and best practices learned from the consumer electronics industry.

To take advantage of the regulatory work that was already done by consumer electronics OEMs, medical device manufacturers should strongly consider partnering with a solution provider that has demonstrated experience and expertise in RoHS implementation at the global level. The sooner medical device manufacturers start redesigning their products and planning their go-to-market strategy, the more time they will have to perform all of their required testing and evaluations before the July 2014 deadline.

Getting the supply chain ready

Medical device OEMs will not only need to understand their supply chain in a post-RoHS world, but also how to provide evidence of RoHS compliance for every component and part they use. This key lesson learned from the consumer electronics world, is often overlooked by companies in their initial RoHS compliance planning.

Medical device manufacturers should also note that non-electronic peripheral items such as SKU numbering and packaging systems can be considered as part of an electronic device, which could impact compliance. For example, leather cases containing residues of RoHS-regulated chemicals could lead to regulatory non-compliance for a product.

An oversight in this area by a medical device OEM could result in serious financial losses, due to product inventory seizures and fines.

This type of financial loss occurred while some electronics OEMs were working toward their RoHS compliance goals. The Netherlands, which had a regulation banning cadmium in place by 1999, seized millions of gaming consoles and accessories worth millions due to cadmium found in some of the cables.

Medical device OEMs can avoid this situation through a comprehensive supply chain verification exercise that addresses all aspects of the product and its packaging, not just the electronic materials. The enclosures, connectors, interconnects, accessories and mechanical support devices all require serious attention in medical products. The same due diligence must be exercised when dealing with component suppliers – particularly those who have not yet been affected by RoHS.

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After the product materials have changed

During their RoHS preparation, consumer electronics manufacturers quickly learned that changing to lead-free component terminations —as well as interconnect solders—had a significant effect on the product’s long-term reliability. These material changes led to greater brittleness of the resultant interconnect and an overall more fragile product.

To solve this challenge, consumer device manufacturers moved to implementation of modified solder formulations, ultimately resulting in improved reliability.

Celestica has found that one major benefit of RoHS on manufacturing was the improved electrical performance characteristics of some of the RoHS compliant printed wiring board laminate materials, as compared to their precursors designed for lower temperature processing using leaded solders. 

The key for medical device OEMs is to start the conversion process as early as possible in order to prevent stockpiles of non-compliant inventory, which would be deemed unusable after July 2014. Look for a partner with global presence and expertise in RoHS compliance practices that can help start the process and ensure medical device manufacturers can perform the required testing and evaluations well before the RoHS deadline.

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Jun 16, 2021

EU and US agree end to Airbus-Boeing supply chain tariffs

supplychain
Boeing
Airbus
tariffs
3 min
Supply chains embroiled in Airbus-Boeing dispute will no longer be impacted by $11.5bn tariffs imposed on food and beverage, aircraft and tobacco

The EU and US have agreed to resolve a 17-year dispute over aircraft subsidies, suspending tariffs on billions of dollars' worth of goods that have plagued procurement leaders on both sides of the Atlantic. 

Under an agreement reached by European Commission Executive Vice-President Valdis Dombrovskis and US Trade Representative Katherine Tai on Tuesday, the tariffs will be halted for a period of at least five years. 

It will bring an end to punitive and disruptive levies on supply chains that have little to do with the argument, which became embroiled in the trade battle. Businesses on both sides of the dispute have been hit with more than $3.3bn in duties since they were first imposed by the US in October 2019, according the EC. 

The US imposed charges on goods upto $7.5bn in response to a World Trade Organisation ruling that judged the EU’s support of Airbus, its biggest aircraft manufacturer, unlawful. A year later in November 2020, the EU hit back. The WTO found the US had violated trade rules in its favourable treatment of Boeing, and was hit with EU duties worth $4bn. 

In all the tariffs affected $11.5bn worth of goods, including French cheese, Scotch whisky, aircraft and machinery in Europe, and sugarcane products, handbags and tobacco in America. Procurement leaders on both sides of the fence were forced to wrestle with tariffs of 15% on aircraft and components, and 25% on non-aircraft related products. 

Boeing-Airbus dispute by the numbers  

  • The dispute began in 2004
  • Tariffs suspended for 5 years 
  • $11.5bn worth of goods affected by tariffs
  • $3.3bn in duties paid by businesses to date 
  • 15% levy on aircraft and 25% on non-aircraft goods suspended

Both sides welcome end to tariffs 

European Commission President Ursula von der Leyen branded the truce a “major step” in ending what is the longest running dispute in WTO history. It began in 2004.

“I am happy to see that after intensive work between the European Commission and the US administration, our transatlantic partnership is on its way to reaching cruising speed. This shows the new spirit of cooperation between the EU and the US and that we can solve the other issues to our mutual benefit,” she added.

Both aircraft manufacturers have welcomed the news. Airbus said in a statement that it will hopefully bring to an end the “lose-lose tariffs” that are affecting industries already facing “many challenges”. Boeing added that it will “fully support the U.S. Government’s efforts to ensure that the principles in this understanding are respected”. 

The US aerospace firm added: "The understanding reached today commits the EU to addressing launch aid, and leaves in place the necessary rules to ensure that the EU and United States live up to that commitment, without requiring further WTO action."

This week’s decision expands upon a short-term tariff truce announced in March this year. The EC says it will work closely with the US to try and further resolve the dispute, establishing a Working Group on Large Civil Aircraft led by each side’s trade minister.

Airbus last month signalled to suppliers that post-pandemic recovery was on the horizon, telling them to scale up to meet a return to pre-COVID manufacturing levels. “The aviation sector is beginning to recover from the COVID-19 crisis,” said Airbus chief executive Guillaume Faury, adding that suppliers should prepare for a period of intensive production “when market conditions call for it.”

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