These days, the $11 billion computer company is grappling with European legislation that requires manufacturers of electrical and electronic equipment to certify that the contents of their products-at least 75 percent, by weight-can be recycled to reduce the amount of e-waste going into landfills.

The directive known as Waste Electrical and Electronic Equipment (WEEE) takes effect on Aug. 13, although companies are required to certify WEEE compliance well in advance of that date. Currently, seven countries and five U.S. states have pending WEEE-like legislation, according to Richard Hess, manager for global environment, health and safety at Sun (Palo Alto, Calif).

"We outsource all of our product assembly, so the big issue for us is making sure the supply chain is compliant and [meets specifications for] quality," Hess said.

Right now, trying to meet the requirements of WEEE is a crapshoot, he said. The law continues to evolve, with new product additions and exemptions being proposed all the time. What's more, despite the August 2004 deadline for European countries to lay out their WEEE requirements, more than half of the 25 EU member states have yet to publish their timetables for implementation of the law.

With so much uncertainty surrounding enforcement of WEEE, it's no wonder that few OEMs in North America are taking a proactive stance toward the environmental directive, choosing instead to "study" the issue.

Yet with the deadlines for WEEE and another EU directive-Restriction of the use of Certain Hazardous Substances (RoHS)-looming, there isn't much time left for study. The soundest approach, is for manufacturers to face up to the fact that whatever they design will eventually reach the end of its life, noted Stuart Randall, technical director at Darp Environmental Ltd. (Devon, England) and co-founder of the WEEE Network.

"Whether it's a kettle or a football or a car, sooner or later somebody's going to throw it away," he said. Indeed, thinking about upgradability, reuse and recyclability as part of a product's complete life cycle can be a competitive weapon and a boost to profits in the long run, analysts said. Companies can cut costs by reducing waste, making products easier to take apart at end of life and using materials that are biodegradable or less energy-intensive to manufacture and recycle. Some might even shorten time-to-market by simplifying design and assembly processes, the analysts said.

The impact of WEEE has been grossly underestimated, and the consequences will be a rude awakening for an unfortunate number of electronics companies, said Pamela Gordon, president of Technology Forecasters Inc. (Alameda, Calif.). The misconception is that WEEE is merely a "take-back" initiative.

"What I hear a lot is companies that are preparing for the WEEE directive, or SB-20 and SB-50 here in California, do not realize that product redesign will be required in most cases," she said.

That requirement is a legal obligation with penalties ranging from fines to the banning of products. The financial burden can be vastly reduced if products are redesigned for disassembly and reuse.

While largely ignoring WEEE, the electronics industry has been preoccupied with RoHS, which bans the use of six materials-most notably, lead. Since lead-based alloys are a universal ingredient in integrated-circuit packaging and printed-circuit-board assembly, the cost impact of RoHS is far more tangible than that of WEEE.

"The biggest issue for companies is, 'Oh, my gosh, I ship 40 percent of my product to Europe. Do I want a 40 percent drop in revenue come the RoHS deadline of July 1, 2006?' That's bigger than a 2 percent hit to profits from recycling fees, or whatever it would end up being," said Michael Kirschner, president of Design Chain Associates LLC (San Francisco).

"I don't think anybody has a handle on what it's going to cost to recycle and redesign a product so that part of it can be reused, or so it's more easily upgraded and has a longer life cycle," he said.

Broad impact
The EU directives will affect companies large and small. For tiny New Forest Electronics, a one-man shop that designs and manufactures handheld logic analyzers, designing for WEEE is relatively inconsequential.

New Forest (Fordingbridge, England) has only one product line, with roughly 30 to 40 units shipping per year and those units generally staying in the field for many years. Thus take-back, disassembly and recycling won't be much of a distraction, said Robin Brand, the company's owner.

The more pressing concern for a company of New Forest's size, Brand said, is the pending RoHS legislation. "I have had to re-engineer my product for RoHS," he said.

All that development and testing takes money and time. Although Brand could not quantify the redesign costs he has incurred, the amount is not trivial. "I'm a very small company, but I've still got to take the time and sort out the details and comply with the legislation," said Brand.

Even at Sun, which has an initiative to promote design for ease of repair or disassembly independent of the EU legislation, it's difficult to commit to recycling or reusing a certain volume of material until you actually begin the take-back part of the program and can see what works and what doesn't, Hess said.

Thus, most of the company's WEEE-related activity to date has been centered on setting up a reverse logistics supply chain and contracting with a major recycling company in Europe to handle product disassembly and track hazardous waste. The recycler, Mirec Asset Management Ltd. (Eindhoven, Netherlands), also makes suggestions to Sun's design engineers on ways to make systems easier to take apart at end of life.

Previously, an informal process of incorporating input from Sun's internal remanufacturing and service group contributed to the company's recyclability initiative. Sun is now working toward establishing a formal process of obtaining input and commentary from external partners, such as Mirec, Hess said.

The process begins internally, by identifying which existing products and those under development will be subject to the laws, and which components or materials in those systems can or cannot be recycled. Then it's a matter of figuring out what needs to be changed in the design process-whether it be redesigning a board to use recyclable or reusable components, or reengineering the entire assembly process to streamline disassembly at end of life. "For example, instead of 98 screws, get it down to 40, keeping in mind quality and performance," Hess said.

Small changes, big impact
Indeed, eliminating screws and manual assembly steps is a tactic employed in the PC arena to reduce service labor cost. Dell Inc., for example, uses a snap-together design for its enclosures. Motherboards pop in and out. Hewlett-Packard Co. is another company that has gone to screwdriver-less enclosure designs, securing its computer side panels with a couple of easy-to-remove thumbscrews.

Modular system design is another effective approach to reducing e-waste, said Design Chain Associates' Kirschner. To do this well, companies must understand the technology road maps of the components they're using and make sure their basic product will be compatible with those plans for a few life cycles. That way, it's possible to pop out an old processor or memory module and put in a new one, he said.

Design-for-reuse will ultimately force companies to look at new revenue models, such as leasing, where in the end the OEM still owns the product, so the strategy is to get as much life out of it as possible.

"That's where long-term technology road maps and design-for-reuse and -upgrade come into play," Technology Forecasters' Gordon said. "The revenue is there, and in some ways it's so much easier than having to do a new sale each time. You've got a loyal customer who is leasing from you over a period of years, and when they're done with it you can lease it to someone else; you can control how it's recycled."

Gordon believes that once companies begin to understand the competitive advantages of environmentally friendly product design, they will be less averse to bearing the initial cost burden of research and development.

Japanese manufacturers have been highly progressive in this area, developing new approaches to system design and new materials that are more easily recycled. Japan has also been fairly advanced in terms of setting up an infrastructure for third-party recycling, more so than the United States, Gordon noted.

Well before WEEE and RoHS came into play, Japan set targets for recycling a certain percentage of laptops and other electronic products, and surpassed the goals earlier this decade. "A lot of it is the geography of Japan," Gordon said. "The amount of living space is a surprisingly small percentage of the land mass. So the idea of unlimited space for landfills is not a factor."

Crista Souza can be reached at csouza@cmp.com.

See related chart