How lead-free trends impact distribution
Staff -- Purchasing, 4/21/2005 2:00:00 AM
The Restriction on the Use of Hazardous Substances (RoHS) legislation which bans the use of lead and several other substances is having a big impact on electronics distributors.
All equipment being sold in Europe must be lead-free by July 2006, under RoHS legislation. Distributors are serving as a kind of clearing house for information about which suppliers are building RoHS compliant parts.
"Customers are looking to distributors for information about which parts are RoHS compliant," says Robin Gray, executive vice president of the National Electronic Distributors Association. "Distributors are also segregating inventory."
Some manufacturers are making both lead-free and leaded products at least for a while so inventory has to be segregated. In other cases, some component manufacturers are making lead-free parts while others have not.
P.J. Murphy, vice president of sales at passives specialist Sager Electronics, Weymouth, Mass. says the role of distributor in RoHS is to educate OEM and electronics manufacturing services providers about which products are compliant because there is a wide range in the degree of compliance among manufacturers.
"Today AMP has 5,000 RoHS compliant parts. Tomorrow they will have 5,100, the day after 5,200. They continue to evolve. Other suppliers like Phoenix Contact, based in Germany were compliant years ago. They are leading the pack. Other companies just haven't grasped the magnitude of the situation. They will be left at the curb if they don't get their act together soon," says Murphy.
Managing information concerning which suppliers are compliant is a big nightmare because there is no standard way of designating a RoHS complaint part.
NEDA has called for entirely new part numbers for lead-free product. However, not all suppliers are issuing new part numbers.
Leoni Tipton, vice president of sup-ply chain programs for Arrow Electronics, says about 72% of semiconductor suppliers will issue new part numbers for lead-free product. Only about 49% of passives and electromechanical suppliers say they will issue new part numbers, according to Tipton.
"Some are changing part numbers. Some are obsoleting the older part," says Paul Tallentire of Newark InOne. Others are labeling packaging or labeling the product.
"Some suppliers will continue building the leaded part for awhile and see what happens. Some believe their products are exempt," he says. "The issue hits us when the product comes into our receiving bay and we have to deal with these different approaches to a difficult problem and simplify it and make it easy for our customers."
Tallentire adds that RoHs is resulting in thousands of new parts being introduced into the market.
"Two years ago we introduced 50,000 products. Last year, 40,000 products. This year because of RoHS we are looking at 90,000 new products."
He says many buyers call and want only RoHs compliant parts, but some manufacturers are not making them yet.
"It's a minefield. It is going to be a real period of difficulty in terms of designing products and manufacturing products over the next 18 months."
Tallentine says distributors need to provide buyers with "clarity and simplicity through this period of flux."
"The role of the distributor is to help customers make the right product selection and insure we can supply compliant products as quickly as possible so they can change their design," says Tallentire.
Gray of NEDA says while managing the information concerning RoHS compliant parts is a challenge for distributors, it is also an opportunity.
"There is a competitive advantage for doing this. If distributors can get the information from suppliers and provide it to customers, it will further enhance their role in the supply chain," says Gray.
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