CONTRACT MANUFAC TURI NG


FEAT


ATURE


COMPLIANCE – REGULATORY RED TAPE, NECESSITY OR OPPORTUNITY TO DIFFERENTIATE?


by Benjamin Khor, ESCATEC’s corporate regulatory compliance manager F


or many companies, regulatory compliance is just red tape, an


expensive overhead that has t o be done and, in some cases, worked around. ESCAT EC, a multinational EMS provider, t akes a different view; by investing in an in-depth understanding of compliance, the company can use this expert ise to reduce costs for customers.


Oft en companies employ in-house experts to understand and manage


compliance, supported by external servic e providers. This specialist knowledge is only known by a few employees which is problematic when someone leaves.


ESCATEC’s approach is to just have one in-house expert as a co-ordinator and t hen make extensive use of a reputable external service provider. This external expert is able to educate a large number of people in the company and along the supply chain on the latest development s through a regular programme that includes frequent webinars, widely disseminating this knowledge and


understanding throughout the company and it s supply chain.


Compliance covers so many areas from labour to environmental regulations and from corporate governance to specific requirements of specialist product areas. These are the minimum requirements but, by having an in-depth understanding of all aspects of compliance throughout the company, opportunities to save customers’ money can be found in many different departments.


By better understanding compliance with customs regulations, ESCATEC’s Logistics department found that tax exemptions could be applied to some goods shipped from its Swiss business unit and also from Malaysia where it does much of its contract


ogistics department


manufacturing. The savings were passed onto the customer.


ESCATEC as a contract manufacturer was not allowed to sell the surplus components that sometimes remain in stock when a product reaches end of life. Through access to the resources of the external compliance service provider, it discovered that a special license could be obtained to sell surplus stock. This means that ESCATEC’s Procurement department has more flexibility in component purchases and can further optimise bulk purchases to achieve even lower costs for cust omers.


Compliance stretches throughout the supply chain. Due diligence on compliance by ESCAT EC’s suppliers is vital; such as ensuring that suppliers significantly minimise any conflict minerals in parts in accordance with the various Conflict Minerals regulations. In addition, supplier compliance is essential to meet regulations such as REACH (Regulat ion for Registration, Evaluation, Authorisation, and Restriction of Chemicals), ROHS (Restriction of Hazardous Substances), California Proposition 65 and the Consumer P rotection Act, all of which can be complex and daunting for suppliers. ESCATEC re aches out to its hundreds of suppliers to boost their knowledge of compliance requirements via the external service provider’s platform, to make their jobs as easy as possible rather than them having to work it out for themselves.


T his investment in support by ESCATEC enhances the working relationship between ESCATEC and its suppliers, so they are more prepared to offer bet ter t erms of supply that can be passed onto customers. To further support these relationships, ESCATEC hosts its Supplier Conference at its P enang headquarters each year.


ESCATEC’s designers ensure that any products designed for customers are compliant not only with existing regulations but also, where known,


/ ELECTRONICS


Above: ESCATEC’s Suppliers Conference in 2019 in Penang, Malaysia


Below: Benjamin Khor


pending regulations that


pending regulations that will come into force during the lifetime of t


Examples include recyclability for parts used in ships (Regulations (EU) No.1257/2013), the EL 2000/53/EC automot


No.1257/2013), the ELV Directive 2000/53/EC automot for easy recyclability


recently announced EU requirement that goods should be designed to be easy to repair.


Since the beginning of the China/ US trade war, products made in China have been targeted wit Strong compliance underst


enabled ESCATEC’s Export team in Malaysia to rapidly prepare Certificates of Origin to ensure that there was no interruption to shipments or unnecessary tariff costs as the trade war escalated.


Strong compliance understanding enabled ESCATEC’s Export


In essence, ESCATEC invests in compliance above and bey ond the essentials. Having in-depth knowledge enables it to st and out from it s compet ition and helps win business by delivering savings t hat others


would not realise. This commitment t o understanding all aspects of compliance also assures customers that ESCATEC truly understands the import ance of compliance, giving them greater peace of mind.


ESCATEC www.escatec.com ELECTRONICS | MAY 2020 33 argeted with import duties.


force during the lifetime of the product, thus avoiding expensive redesigns. Examples include recyclability


of parts, and the ive requirements


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46