Considerations and Trends in Supply Chain Data Collection: Electronics

In recent years, the increasing regulation of the electronics sector has impacted how companies approach the lifecycle of existing and emerging technologies.

At the crux of developing technologies is the complex compliance pressures that companies face when producing, selling, and disposing of a variety of electronics devices and infrastructure (e.g., equipment).

Addressing both compliance responsibilities and consumer and investor attention on sustainability is a focus of corporations seeking to set the bar. It is important to understand the breadth of the electronics sector as well as the complex supply chain that results in the end product brought to market.

Complex regulations apply to electronics manufacturers around the globe, from specific state requirements (e.g., California Prop 65) to European Union (EU) Directives such as the waste electrical and electronic equipment (WEEE) Directive and the Restriction of Hazardous Substances in Electrical and Electronic Equipment (RoHS) Directive. In addition, initiatives such as the Green New Deal and the Corporate Sustainability Reporting Directive (CSRD), are putting pressure on corporations to show that they are moving toward a future that looks to a circular economy for success.

Understanding the Electronics Sector

The electronics manufacturing and retail sectors span a variety of product classes such as:

• Electronic Devices: smartphones, tablets, laptops, etc.
• Wire & Cable
• Telecommunication Equipment:  radios, antennas, etc.
• Test & Measuring Equipment: thermometer, speedometer, multimeter, etc.
• Computer Equipment & Peripherals: computers, laptops, cords, plugs, etc.

While these components of the electronics sector appear separate, there are shared challenges that they face when considering the supply chain needs.

For instance, each part of an electronic device may be manufactured by a different company and yet the overarching manufacturer is responsible for compiling SDS, ensuring compliance with regulations that are local (state, province), federal, and regional (EU), and ensuring that ethical standards are met.

With overarching goals of both compliance and sustainability, there is a growing importance placed on supply chain data collection software to ensure visibility.

Industry Challenges in Compliance and Sustainability

Electronics manufacturers report facing multiple pain points when attempting to increase supplier engagement.

• Difficulty evaluating new materials in a timely fashion when it comes to compliance and sustainability.
• Difficulty analyzing complex product catalogs for compliance in a timely fashion.
• Difficulty staying up-to-date with evolving regulations
• Difficulty in responding to customer questions about compliance and sustainability due to time constraints and the lack of easily accessible product data.

Horizon Scanning

When addressing these pain points, there is a definitive need for companies to horizon scan for the plethora of regulations that apply to their products – and to distinguish which regulations apply to their role in the supply chain (e.g., manufacturers, distributors, e-waste recyclers, and others that play a crucial role in electronics manufacturing.

For instance, the EU has numerous Directives that govern products including electronics. Chemicals are regulated by the EU Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH), including substances of very high concern (SVHC).

In the United States (US), the Toxic Substances Control Act (TSCA) 8(a)(7) is a recent rule that affects reporting obligations as they pertain to per- and polyfluoroalkyl substances (PFAS) and the TSCA Inventory Application.

How Electronics Manufacturers are Leveraging Software Solutions: Market Research Findings

Many internal teams in each company are involved in purchasing decisions including product compliance teams, supply chain and procurement teams, and sustainability teams. In addition, there is a hierarchy to follow when making purchasing decisions, along with budgetary constraints. Despite these challenges, electronics manufacturers are taking significant strides to utilize software to address their needs.

Technology: A Catalyst for Transformation

It is becoming evident that electronics manufacturers are relying upon technology to support compliance and sustainability goals.

Based on an external market survey conducted by 3E:

• 71% of respondents use supply chain data collection software.
• 93% of these users onboarded their software solution in the last 3 years.

Manufacturers also report increased anticipated investment in both supply chain data collection software and services over the coming years.

Electronics manufacturers are not only leveraging software to solve data collection problems, but also data sharing problems. Moving data securely and efficiently throughout the supply chain is key to enabling compliance and innovation. One important consideration is the Digital Product Passport (DPP).

3E Digital Product Passports are digital repositories of critical product information that businesses share across stakeholders. DPPs are particularly important when tracking compliance status among complex supply chains where parts are manufactured separately and then joined together in the final product. 3E Digital Product Passports offer a flexible vehicle for storing and sharing compliance and sustainability data throughout complex supply chains, without exposing proprietary information.

Drivers of Increased Spend and Adoption:

The below are some significant drivers of the recent increased investment in supply chain data collection:

• Increasing number of products. Growth is a goal for any company and with new product development, companies must comply with requirements for the chemicals used in those new products.
• Expanding regulatory scope. The constantly shifting regulatory scope requires consistent and accurate horizon scanning to avoid risking noncompliance. This is made increasingly difficult due to the increased complexity of supply chains.
• Increasing supplier numbers. As global supply chains shift, the number of suppliers increases in parallel. Thus, these new suppliers must be integrated into the overall supply chain process and data collection pressures increase.
• Need for data collection and consulting services. Both an increasingly complex regulatory landscape and an increased number of suppliers lead to the need for time-consuming data collection and the best outside consulting services to support daily workflows.

Preparing for the Future of Supply Chain Data Collection in Electronics

3E's supply chain data collection software can specifically address the following:

• Quality of data collection and depth of regulatory data.
• Integration with existing systems (ERP, EHS, PLM).
• Automated compliance scoring and reporting.
• Customizable supplier surveys.
• Horizon scanning of regulatory news.

This is where 3E comes into play.

The 3E Advantage

3E Exchange delivers targeted solutions that align directly with electronic manufacturers' pain points:

• 3E allows companies to conduct supplier outreach as they see fit. For instance, within 3E Exhange customers have the option to conduct supplier outreach in-house or to tap into a team of global supplier relations experts.
• 3E Exhange also allows customers to automate supplier surveys, saving a significant amount of time.
• With 3E DPPs, all information about the chemicals and mixtures within a product move with that product. 3E Exchange allows customers to keep DPPs in one software solution, evaluate new materials and chemicals and chemical mixtures efficiently while securely sharing data across teams.
• 3E's proprietary newsletter, The Signal, provides the information, technology, and analysis necessary to stay on top of new and changing regulations.

What Customers Are Saying

“3E Exchange really optimizes the time. Some of these things are very time-consuming… You spend hours, sometimes even days, collecting all the information from suppliers before you can provide an answer. 3E Exchange facilitates that communication.”

       – Product Steward Manager

Next Steps for Your Organization

The time to explore new technological solutions to help your electronics company face compliance challenges is now. When you evaluate options, you should look for the following attributes:

• Automated and repeatable data collection strategies to improve data collection quality
• Streamlined compliance management with compliance checks, ingredient screening, and exportable compliance documentation
• The best and most trusted partner who can help you to receive buy-in from suppliers and onboard them for streamlined supply chain data collection.

Partner with 3E for Supply Chain Compliance Solutions

Schedule a personalized consultation with 3E to explore how our platform can elevate your supply chain operations.