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The European Product Safety System and the Supply Chain
Marcello MancaVice-President & General ManagerUL Environment Inc
The European Product Safety System launched over 20 years ago to support one of the cornerstones of the single market: the free movement of goods
The mechanisms in place to achieve this aim are based on prevention of new barriers to trade, mutual recognition and technical harmonization(1)
The scope of EU “Product safety” laws refers (also) to the physical health and safety of citizens with regards to non-food products(2)
European citizens must be confident that the products they use, consume or simply come into contact with are safe and do not present any danger to their health and physical safety(2)
(1) summary from EC DG Enterprise “Blue Guide”; (2) summary from EC Health & Consumer DG “Product Safety” factsheet
an highly simplified Product Safety system does not workin an increasingly complex Electric & Electronic industry
10UnderwritersLaboratories
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What are we seeing…
Underwriters Laboratories researched the failure rates for first time product submittals and found these failure rates vary by product type from 14% to 45%, averaging 28%(1)
During our regular factory inspections, UL evaluates the products being manufacturedto check compliance with specification originally tested & certified, on average10% of the inspections detect non-compliant products(1)
It is easy to imagine honest reasons why products fail to comply with technical requirements, particularly when one deals with complex products and supply-chains:
• Failure or inappropriate specs of components and subassemblies• Legitimate misunderstanding of requirements in standards & regulations• Lack of technical means or safety engineering knowledge to test and
evaluate compliance of components, sub-assemblies and end-products• Manufacturers & suppliers do not know how to bring products into compliance
The (pre-market) cooperation between manufacturers and a reliable 3rd party conformity assessment body, like Underwriters Laboratories, prevented unsafe products to reach the places where people live and work
• 12% no CE marking • 71% no or incomplete SDoC• 25% no brand name • 87% no or incorrect technical file
• 72% failed one or more technical requirements (EN 60589)
The European Commission reports(2) on the Electrotechnical sector:
• 10% to 70% market share of non-compliant products• up to 99% of imports from 3rd countries are non-compliant
It does not take dishonesty to get a self-declaration (SDoC) wrong, but add increasing economic pressures and dishonesty to the equation the potential for creating unsafe conditions and an unbalanced market place grows exponentially
(1) 2006 project IP0106LUM | voedsel en waren autoriteit; (2) EC Impact Assessment SEC(2007) 173
The risk of unsafe products escalates and the costs of (non) compliancecan increase considerably:
• manufacturers need to invest in “safety engineering knowledge” and “testing capability” to evaluate their products and the ones of their suppliers & subcontractors
• larger companies often develop functions to manage “design”, “compliance”, “suppliers & distributors control” and “procurement”, to deal with their extended and complex design, production, subcontracting & distributing networks
• smaller companies often don’t have such means, knowledge or technical capabilities, and rely on other (smaller) companies, that relied on others, that relied on others… creating an “ad-hoc trust-me compliance system”
• in either case everyone in the product supply-chain carries the crippling costs of “cascading liabilities”
• reputable firms are more likely do the right thing and incur the costs of honest action, putting them at a competitive disadvantage to those who would cheat the system, effectively imposing an “honesty penalty”
as recent examples unfortunately showed,costs of “Lack of Compliance” are much higher…
Systematic high-level Recalls (2006, 2007, 2008)
• 20 million Toys, due to magnetic parts and lead in the paint(1)
• Toothpaste, tainted with brake-fluids thickener and anti-freeze(1)
• 9 million lithium-ion Computer Batteries overheating(2)
• Milk-powder, contaminated with melamine kills babies(3)
We are living in a financial crisis that results from de-regulation that began in the 90’s
• it happened in the US financial markets• market forces were expected to be the “regularizer”
• Today the financial crisis affects everyone around the globe.It started due to a poorly regulated and uncontrolled “supply chain” of financial mechanisms used in the credit markets