Sub-Zero/Wolf is a leading manufacturer of premium residential refrigeration and cooking appliances and protecting sales in the European market is critical in its goal of becoming the world's luxury appliance of choice. When the European Union (EU) passed the Restriction on Hazardous Substances (RoHS) regulations, which prohibits use of six substances in electronic products after July 1, 2006, Sub-Zero/Wolf realized they faced a major obstacle to selling products in this important market.
Sub-Zero/Wolf products contain thousands of standard and custom components sourced from hundreds of suppliers around the world. To completely address the compliance issues, the company realized the need for information on compliant parts, estimated part life cycles and compliant replacements. Data was also required to report on maximum concentration levels of hazardous substances and any exemptions to the regulations. Finally, information would also be collected to address evolving environmental regulations in other markets.
The challenge was to develop a RoHS-compliant part database with the information needed to avoid any production delays that could interrupt sales. Sub- Zero/Wolf contacted IHS Markit to address these complex requirements and to leverage IHS Markit expertise in RoHS compliance and ISO 9001 certified data collection processes.
The Price of Compliance
Sub-Zero/Wolf is committed to protecting the environment and early in 2005 senior management made a commitment to comply with the emerging European regulations. Besides the importance of being good environmental stewards, the company also sought to avoid any negative publicity, eliminate potential barriers to sales, and penalties that could result from non-compliance. For Sub-Zero/Wolf, this meant that thousands of components from hundreds of suppliers would have to be researched, processed, and documented to verify compliance.
Obstacles and Challenges
The sheer number of suppliers and their locations around the world, along with the number and variety of parts posed major challenges in collecting the material composition information. In some cases suppliers were not aware of the regulations or could not provide accurate information and most did not have compliance information available on their web sites. All of these issues, along with fact that parts have varying lead times, challenged the company to keep the commitment that all Sub-Zero/Wolf products would comply on time without interruptions in production or sales.
A No-Compromise Approach
Sub-Zero/Wolf formed a cross-function team from Procurement, Planning, Information Technology, Quality and Reliability, Design Engineering, Service, and Sales and Marketing to define the information required for compliance.
Consistent with the Sub-Zero/Wolf guiding principle to preserve the brand image of quality and reliability, the compliance would require the company to:
- Source/assess suppliers' compliance declarations
- Determine lead time and supply chain constraints
- Analyze non-declared components
- Test/qualify material changes due to RoHS compliance
- Develop a permanent audit system for analysis of incoming components
- Generate Engineering Changes for parts that require a material/process change to be compliant
- Collaborate with supply chain partners to successfully launch RoHS-compliant models
The hours spent on compliance analysis were grossly underestimated; however, having IHS Markit initiate the due diligence/ declaration process and deliver in excess of 85% of the required declarations was an asset Sub-Zero/Wolf could not have afforded to do without.
Compliance as a Competitive Advantage
During the project Sub-Zero/Wolf realized that their competitors not only faced similar challenges but were in fact lagging in their ability to certify compliance. Because of their commitment and the capabilities of IHS Markit, Sub- Zero/Wolf had the supporting information and processes in place well ahead of their competitors and able to differentiate its products as environmentally friendly.
And, while complying with the EU directive remained the main driver, the scope of the project was expanded to include information on evolving regulations in other areas of the world.
"The regulations put additional requirements on all of the corporate departments and functional areas." explained Christopher Jessup, Procurement Systems Manager at Sub/Zero/Wolf. "The hours spent on compliance analysis were grossly underestimated; however, having IHS Markit initiate the due diligence/ declaration process and deliver in excess of 85% of the required declarations was an asset Sub-Zero/Wolf could not have afforded to do without. In addition to RoHS, Sub-Zero/Wolf managed a very demanding product development and production support schedule; therefore, outsourcing the majority of the supplier declaration process to a competent and customer service-oriented company was an absolute necessity."
Getting 500 Worldwide Suppliers On Board
Early on, Sub-Zero/Wolf and IHS Markit recognized there would be significant training, communication, logistics and project management issues in addition to the data collection challenges. Working closely with hundreds of suppliers around the world, the project team developed contacts and trained them on the RoHS regulations and the data they would provide to certify compliance.
Sub-Zero/Wolf selected a number of standard services for the project consisting of:
- Developing an attribute set and organization model for compliance and compliance-related data
- Using a data QA process that incorporated Logic Checks for consistency of related attributes
- Tracking supplier contacts/data collection activity with the IHS Markit internal Supplier Tracking system
- Part data collecting and processing
- Integration consulting to make information accessible system-wide in a format that supported end-user decision making processes
- Project management services including a detailed scope of work, staffing requirements and managing international sourcing and production facilities
Results That Count and an Ongoing Commitment to Compliance
Sub-Zero/Wolf 2006 corporate goals addressed new product development, production support and RoHS compliance. Success in all three areas with limited resources required a strategy that relied on IHS Markit experience and capabilities to meet the aggressive RoHS compliance deadline. According to Sub-Zero/ Wolf, the RoHS compliance support that IHS Markit provided was "part and parcel the reason for the success of the RoHS project and meeting the 2006 goals."
As part of a comprehensive compliance assurance program promoted by IHS Markit, Sub-Zero/Wolf now uses Thermo Electron Niton XRF analyzers to sample incoming parts. This hand-held device enables spot testing for the presence and concentration of restricted substances and is an important step in demonstrating due diligence.
Sub-Zero/Wolf remains committed to uninterrupted growth and a no-compromise approach to product quality and compliance. And, they are confident they can rely on IHS Markit for the information and services they need as new challenges arise.