View from the OEM REACH and the supply chain
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1 View from the OEM REACH and the supply chain Cathy Phillips, HSE Materials Manager Confederation of British Metalforming March 2008 Issue Rolls-Royce plc The information in this document is the property of Rolls-Royce plc and may not be copied or communicated to a third party, or used for any purpose other than that for which it is supplied without the express written consent of Rolls-Royce plc. This information is given in good faith based upon the latest information available to Rolls-Royce plc, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Rolls-Royce plc or any of its subsidiary or associated companies.
2 A Downstream User s Perspective 2 The potential impact of REACH on the aviation sector and its global supply chain How Rolls-Royce is responding to REACH Concerns and advice on implementation
3 Rolls-Royce Group plc 3 Power for air, sea and land Annual sales 7+ billion ( 24bn order book) Customers; 500+ airlines, 4,000 corporate and utility aircraft and helicopter operators, 160 armed forces and more than 2,000 marine customers, including 50 navies. Energy customers in nearly 120 countries 38,000 employees in 50 countries A Global company with a Global Supply Chain
4 REACH scope 4 Importation Manufacture Placing on the market Use of substances Importation On their own In preparations In articles Trichlorethylene Paints, Sealants, Resins Systems, Components, aircraft
5 What REACH means to Rolls-Royce 5 Rolls-Royce as an importer (?) Alloys - preparations (cast stick, specialist metallic powders etc) Processing chemicals (drums of chemicals and powder preparations etc) Imported finished articles (with no intended substance release: bar, billet, forgings, components, assemblies) for this, we are not a REACH importer Contracts on non-eu suppliers will have to change to obtain information to complete registration.
6 What REACH means to Rolls-Royce 6 Rolls-Royce as a downstream user Making articles out of preparations, and using preparations / substances during manufacture and Repair & Overhaul Making some preparations (eg, thermal paints) Odd uses! Conducting Product and Process Oriented Research and Development (PPORD) with suppliers
7 What REACH means to Rolls-Royce 7 Rolls-Royce as a user of substances of very high concern (SVHC) Using SVHCs within alloys, adhesives, surface treatments and within process chemicals Unable to change quickly to alternatives (air worthiness) In some cases, there may be no alternatives
8 What REACH means to Rolls-Royce 8 Rolls-Royce as a user of substances of very high concern (SVHC) Rolls-Royce specifiers, purchasers, designers and technical experts will need to work with customers (who may specify SVHC use) and suppliers (who may have a technical necessity to use SVHC) to prove the need for each SVHC within any Authorisation. For each SVHC For EACH USE / APPLICATION
9 RR As a Downstream User 9 REACH is aimed primarily at manufacturers and importers of chemicals RR will mainly be a downstream user and therefore fall outside much of the REACH burden However, for strategic, niche/small market materials and targeted substances we will need to ensure that suppliers are REACH compliant We will be an importer of articles from all over the world and this brings responsibilities, especially when SVHC are involved We expect to have significant involvement in SEA
10 Purchasing impact of REACH 10 Changes will be needed in purchasing practice a new way of working Closer ties with engineering, design and manufacturing functions Cost, Quality, Delivery + REACH compliance May need to place contractual requirements on suppliers regarding a responsibility to register and obtain any relevant authorisations
11 Chemical Producer 1 Pb Communication through Supply Chain US/EU Supplier 1 Spec ## Antigallant US EU Repair shop 11 Chemical Producer 2 CdO & Ni(SO 3 NH 2 ) 2.4H 2 O Chemical Producer 4 (Importer) CrO 3 (e.g.) Chemical Producer 5 (Importer) Fe Supplier 2 Steel alloy Forger/Part Producer Steel alloy disc Plater Steel alloy disc w/ AMS## NiCd plating, conversion coat, & Spec ## antigallant Large, Complex Component Producer Engine Airframer Aircraft Airline Preparation Importer (Supplier 1) Appoint only representative or provide info to importer to: pre/register by use provide SDS or reg #/auth/restrict info Information on substances intended to be released or SVHC on candidate list contained in article will need to be collected through specs, MSDS or contractual requirements Article Importer Register substances intended to be released For SVHC on candidate list, notify Agency provide safe use info Article D/U Register uses not covered by substance M/I For SVHC on candidate list, provide safe use info?? Pass identified uses and hazard/risk info to next actor in supply chain Courtesy of AIA
12 REACH COMPLIANCE Continued access to substances: 12 Registration for an imported or manufactured substance is the right to bring onto the market irrespective of hazard or risk posed by the substance, OR it will be illegal: to PURCHASE the substance to use the substance IN PRODUCTS Authorisation is the right to use a substance - including presence in an article if the substance is considered of very high concern Communication you must tell your customer if an article you sell to them contains SVHC at >0.1% w/w
13 Priority for 13 replacement CANDIDATE LIST List of all substances that meet the criteria for Authorisation 1,800-2,500 Substances? Pressure on continued use ANNEX XIV LIST: List of Subs. SUBJECT to Authorisation ECHA WORK PROGRAMME
14 The Aviation Sector Declarable Substances list 14 This list is intended to: Help companies make product and process decisions, whilst complying with regulatory and customer requirements. Enable the business risk from these substances to be managed throughout a supply chain IT IS NOT A BANNED LIST SAE Standard/ASD EN Standard AS9535 and Guide ARP 9536
15 Using the Declarable Substances List 15 Declarable Substances (DS) list of substances - Can used by companies for forward planning - To help to identify problem substances Future- Proofing our industry - Similar lists are being considered in other sectors Declarable Substances list DS list SVHCs Known SVHC ALL REGISTERED SUBSTANCES Annex XIV = substances submitted to authorisation Priority SVHC Newly Classified SVHC
16 Ranking for REACH Authorisation Priorities? 16 Still not finalised but will be something like.. Priority 1: PBT/vPvB x CMR x wide dispersive use x high production volume Priority 2: (PBT/vPvB OR CMR) x wide dispersive use x high production volume Priority 3: (PBT/vPvB OR CMR) x wide dispersive use OR high production volume Et seq
17 Potential SVHCs where the sector are seeking alternatives: 17 Trichloroethylene Hexavalent chrome compounds Cadmium Beryllium Nickel oxides and other nickel compounds What are the potential SVHCs that are strategic substances for you? What is your business risk from REACH?
18 Enforcement 18 The manufacture, import, sale, supply or use of substances without the appropriate registration Using hazardous substances outside the terms of an authorisation or contrary to a restriction Failure to provide required information up and down the supply chain Failure to comply with other duties regarding information, eg, workers or consumers rights of access to information Failure to comply with the duty to apply recommendations, eg, in safety assessments Failure to comply with the duties to co-operate and supply information (in a timely manner)
19 Some Aerospace Issues Low use speciality products may be removed from the market (uneconomic for the manufacturer to put through REACH) Some substances will be liable for Authorisation for continued use Will need to register any substances that we import into the EU where we are the only importer and may need to directly register novel uses of substances in our operations. We will also need to ensure that suppliers/rr companies complete pre-registration We may need to register/notify substances in imported articles (intended release??) Supplier awareness & security of supply? Costs of supply will most likely increase Data will need to be passed along the supply chain - exchange of information could have implications for commercial confidentiality and intellectual property rights Internal company resource to support REACH Development of lists of targeted substances/timetables and align elimination/substitution programmes Unique Industry issues - Product life cycles, safety and reliability 19
20 Rolls-Royce Approach to REACH: The most cost effective solution is for a centrally co-ordinated/consistent approach: One defined process for the Group Formation of a Corporate IPT >> Operations Council REACH Executive appointed Purchasing and laboratories have a key role to play (make to Print, Design Make and Consumables) Engineering, Design, Manufacturing Operations, Repair & Overhaul ~ 12 FTEs currently and rising 20
21 Helping our Supply Chains Understand REACH 21 Significant outreach and awareness raising including supplier workshops ASD (EU)- Paris Airshow launch of Implementation Guidelines SBAC (UK) EWG AIA (North America)
22 Managing the Issues: Collaboration 22 The Aerospace sector globally is now working on several initiatives: - Industry Opinion on what is an article vs. preparation - Standardising data needed from suppliers for REACH - Common standards/guidelines for our sector - Supporting trade association / professional institution workshops on REACH - Provision of international training - Sharing best practice across other sectors - RIPs - Cost sharing Working with DEFRA and HSE (CA) (in the UK)
23 Working With the European Commission and ECHA 23 Various companies across ASD, SBAC and GIFAS are representing our sector in REACH IMPLEMENTATION PROJECTS (RIPs) The RIPs will generate TECHNICAL GUIDANCE DOCUMENTS (TGDs) to help businesses find their way through the legal maze
24 Practical Steps to Implementing REACH What have we got to do? 24 REACH requires different areas (Purchasing, Engineering and Design, Manufacturing operations and HSE), to work together inside our companies (easy for SMEs!). REACH will require new information to be collected within companies, and to be passed up and down supply chains (NOT easy for SMEs!).
25 Step 1: The end of ignorance What should you do about it? Most of your supply chain is probably unaware about REACH. Awareness of senior managers? If you want to maintain access to chemicals & raw materials, you need to get other departments to take on the implementation of REACH So first you need to brief senior managers and then brief your top suppliers. 25
26 Step 2: Get resource and plan Start developing the action plan: find out: What is imported - Collating the information on how much is imported (looking at purchase orders over the past 3 years) - Pre-registering & filling in IUCLID 5 if necessary What is not imported, but is still strategically important - Checking that the supply chain are going to meet their obligations for registration 26
27 Step 3: build an material inventory 27 Make a list of all the materials used by your business, if you do not already have a list: Your PURCHASING people need to find out The tradenames / specs of the chemicals you buy Where and who you buy them from (import?) How much you buy
28 Step 3: build an material inventory 28 Your LABS / MATERIALS People need to find out The substances in each of the materials (EINECs/ELINCS/CAS numbers) Is it vital to your product or to a manufacturing process?
29 Step 3: build an material inventory You (HSE Managers) will need to identify, for each Tradename / specification / constituent inside the preparation Is it hazardous? (CMR, PBT, vpvb) COSHH Inventories What your business risk is (will the supplier register it or will you have to?) There may be off the shelf software to help You may want to look into the options here and suggest something to your business. 29
30 Step 4: turn the materials inventory into a substance inventory 30 SOMEONE (You? Purchasing? Labs?) needs to Rearrange all the data you have by tradename / specification to be listed by substance Check that each substance has either an EINECs or ELINCs number (if not this is very bad) Sum the amount of each substance you have bought in 2005,2006,2007 and average it. This is where off-the-shelf REACH software could really help
31 Step 5: Decide what to pre-register 31 If you are an importer of >1tonne or more, you have to pre-register. If the substance is strategically vital and your supplier will not guarantee they will pre-register / register, you may choose to either: Find a supplier who will do it for you Do it yourself to minimise your business risk BUT - This will be expensive in time and money - Death by
32 Step 6: SVHCs Cross reference your substance inventories to your COSHH database / MSDS information looking for CMRs, vpvbs and PBTs (these could become SVHCs on the candidate list, and then added to Annex 14). vpvbs and PBTs will probably be subject to authorization first and MAY need registering, even below 1 tonne (but not yet!) Check whether you REALLY NEED to use the potential SVHC substance. REACH will change cost/benefit arguments, especially if it is also a VOC (Solvents Directive etc). 32
33 Step 7: Pre-register (by 30 Nov 2008) SOMEONE in your company needs to do the IT: Download IUCLID 5 software (its free) from the ECHA website Fill it in with the basic information which tonnage band, the EINECs number, your company details, SVHCs etc. Set up an address just to deal with the information from pre-registration. Off-the-shelf REACH software could really help here too, because it can probably export to the ECHA website directly. 33
34 Step 8: Planning for Authorisation 34 Monitor Annex 14 and the Candidate list for the substances you use. Where you have identified that you will be unable to easily move away from using a candidate list / Annex 14 substance, Contact others in your industry in the same boat. Talk to any industrial customers about the issue. Find out the supplier s plans for Authorization. Start looking into alternatives (Align R&D programs). Authorization will start circa mid Get planning for it!
35 35
36 Other sources of guidance and advice 36 The EU REACH websites: General Manufacturing Industry: Automotive Industry: Coatings Industry: General advice (free) and consultancy at reasonable rates:
37 37 End of Presentation Thank you for listening CONTACT DETAILS: +44 (0) nigel.marsh@rolls-royce.com +44 (0) catherine.phillips@rolls-royce.com
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