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The outline of the management of chemical substances as our Green Manufacturing activities

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Murata Manufacturing Co., Ltd
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The outline of the management of chemical substances as our Green Manufacturing activities
Taro Hatano Murata Manufacturing Company Limited March 7,2006

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Our Company Profile

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Company Name    Murata Manufacturing Co.,Ltd.. Head Office     10-1, Higashi Kotari 1-chome, Nagaokakyo-shi,
Kyoto 617-8555
Date of Establishment October 1944 Paid-in Capital
69,376 million Yen (as of March 31, 2005)
Representative
Yasutaka Murata President and Statutory Representative Director
Number of Employees Consolidated basis
26,719 (as of September 30, 2005)
Parent Co.basis("MMC") 5,357 (as of September 30, 2005)
Company Profile

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Ceramic Resonator Ceramic Filters Piezoelectric Buzzers
Ceramic Resonator Ceramic Filters Piezoelectric Buzzers
Main Products
Dielectricity Magnetism Piezoelectricity
Chip Monolithic Ceramic Capacitors EMI Suppression Filters Microwave Filters Ferrite
EMI Suppression Filters
Bluetooth Modules Wi-Fi Modules
Ceramic Multilayer Technology
Ceramic Multilayer Technology

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0 100,000 200,000 300,000 400,000 500,000 600,000 '02 '03 '04
The Americas Europe Asia and Others Japan
(Fiscal Year)
Sales by Area
Unit: Million of Yen)
2003 Consolidated basis: 414,247 2003 Parent Co. basis :   343.374 2004 Consolidated basis424,468 2004 Annual Parent Co. basis : 358,919 *Sales for India : approximately 43k US Dollars on the average a Month these years

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Global Network
Global Network
Murata
Murata Electronique S.A.
Mu
Murata Electronics North America, Inc. Murata World Comercial Ltda.
Mura
Murata Elettronica S.p.A Murata Eletronica Do Brasil Ltda.
Murata Electronics
Murata Electronics (UK) Ltd
MMurata Electrronics (Netherlands) B.V.
Murata Elektronik GmbH Murata Electronics (Thaila (Thailand),Ltd. Murata Electronics (Malaysia) Sdn.Bhd. Murata Trading (Malaysia) Sdn.Bhd. Beijing Murata EElectronics Co., Ltd Korea Murata Electronics Company, Limited
Murata Manufacturing Co., Ltd.
Wu
Wuxi Murata Electronics Co., Ltd. Taiwan Murata Electronics Co., Ltd.. Murata Co., Ltd. Murata Electronics Singapore (Pte.) Ltd.. Murata Amazonia Industria E Comercio Ltda. Murata Electronics Philippines Inc. Thai Murata Electronics Tradi Trading, Ltd. Suzhou Murata Electronics Co., Ltd. Hong Kong Murata Electronics Co., Ltd. Murata Electronics Switzerland AG Murata Electronics Trading Mexico, S. A. de C. V. Murata Electro ectronics Trading (Tianjin) Co., Ltd Murata Electronics Tradingg (Shanghai) Co., Ltd Murata Amazonia Industria E Comercio Ltda. Murata Electronics Tradingg (Shenzhen) Co., Ltd
Murata Europe Management B.V. Copenhagen Office
MMurata Electrronics (Netherlands) B.V. Stockholm Office MMurata Electrronics (Netherlands) B.V. Helsinki Office MMurata Electrronics (Netherlands)
B.V.Barcelona Office Murata Elektronik GmbH Budapest Office
Regional Head Office Sales Office Sales Office and Production Plant Production Plant Head Office Murata Europe Management B.V.

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SUBJECT
1.Why do we need to manage legal and customer requirements for product environment? 2.How do we manage chemical substances in manufacturing our products? 3.How do we manage compliance with product environmental legislation?
.

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1.Why do we need to manage legal and customer requirements for product environment?

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Product Environmental Legislation in the World
(Asian countries) (Korea) <Korea ELV&RoHS (China) <China RoHS <WEEP (Thailand) *Criterion of import of Waste consumer electronic products (Japan) *Marking for presence of the specific substances in EE equipment U.S.A. (California) *Law for Recycle of Waste Electrical &Electronic Equipment (10 North- eastern states) *Legislation for recycle
EU is now leading the world in legislating restrictions of use of environmental burden substances and is affecting other countries.
EU is now leading the world in legislating restrictions of use of environmental burden substances and is affecting other countries.
European Union * ELV directive * RoHS directive * WEEE directive < EuP directive < REACH regulation
* :issued < :under preparation

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Major legal restrictions for chemical substances in articles
- ELV Directive(2000/53/EC) (EU)
Restriction of use of lead, hexavalent chromium,cadmium, mercury in materials and components of vehicles put on the European market from July 1, 2003
- RoHS Directive (2002/95/EC) (EU)
Restriction of use of lead, hexavalent chromium,cadmium, mercury and PBB, PBDE in electrical and electronic equipment to be put on the European market from July 1, 2006
- REACH (proposal under discussion) (EU)
Regulation of evaluation, authorization, restriction of chemicals. Registration of chemicals used in articles will be also required.

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Our customers (Equipment manufacturers) need to improve Green procurement activities
Increased legal requirements Factor
1.Audit, instruction, Screening
Action for suppliers
2.Request for Restriction and exclusion of use of the hazardous substances
- Compliance certification Compliance certification - Avoiding delivery Avoiding delivery of non-compliant goods compliant goods
3.Request for Establishment of the effective internal system
- Development of the information DB Development of the information DB - Assessment and recognition of Assessment and recognition of Green Product
Further challenge for Green Procurement
Further challenge for
Green Procurement
Increasing potential risk of offence against the laws Increased social responsibility for the environment

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Our Customers’ actions for the suppliers
Action for suppliers
1.Audit, instruction and screening 2.Request for Restriction and exclusion of use of hazardous substances 3.Request for Establishment of the effective internal system
Our customers will do business with reliable suppliers Our customers will purchase reliable products Our customers will ensure compliance based on the reliable management system
Intention

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Audit, Rating and Screening of suppliers
Our customers will do business with reliable suppliers
Sharing common knowledge of the management over the supply chain makes the scale
- Adverse effect(disappointing result of audit、Cost) > expected effect (The levels of the management cannot be measured) - Suppliers’ trouble caused by deferent requirements from some manufacturers in the audits and the instructions
JGPSSI Guideline for the management
JGPSSI Guideline for the management
Our customers’ actions for the suppliers and the problems (1)

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Request to the suppliers for avoiding restricted substances, and for compliance confirmation and analytical data
Our customers will purchase reliable products
Practice of adequate management of substances surely provides compliance
-Most of the collected confirmations and the analytical data could be not enough available -Suppliers’ trouble caused by unlimited requirements of some customers based on their unspecific aims
JGPSSI Guideline for the management
JGPSSI Guideline for the management
Our customers’ actions for suppliers and the problems (2)

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Request to the suppliers for improving the management system
Our customers will ensure compliance based on the reliable management system
Standardization of the management system makes Reliability
-Diversity of our customers’ requirements to the suppliers for improving the management system -Absence of assessment criteria for the management system and the performance Our customers’ actions for the suppliers and the problems (3)
JGPSSI Guideline for the management
JGPSSI Guideline for the management
JIG(JGPSSI) guideline for survey of the 24 targeted substances
JIG(JGPSSI) guideline for survey of the 24 targeted substances

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more cost-effective system in the whole industry
JGPSSI activities for standardization across the supply chain
M urata contributes

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2.How do we manage chemical substances in manufacturing our products?

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Purchasing
Chemicals Articles Packing materials
Manufacturing
Electronic components
Shipment
Cartons Reels,Tapes etc baking molding assembling Waste
into air, water,land
Chemicals as semi- finished packing Raw materials Additives, etc packing preparation Mould compounds, Metal alloys, etc preparation *1
*1: Substance/preparations to be transformed into Article *2: Emission to be made during manufacturing
*2 *2
We manufacture main electronic components by transforming Chemical Substances into Articles
Our production process
(Chemical substances/ Preparations)

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Our activities
1.We are promoting the restriction, the reduction and the abolition on the basis of our voluntary criteria
(1) the technical criterion for the environmental burden substances in products (2) the technical criterion for the environmental burden substances used in the process
2.We are surveying, controlling and screening the uses of the environmental burden substances
- to check the substances in purchased materials including the impurities - to check and verify the contained substances in selection of new materials - to prevent ourselves from purchasing unchecked(unregistered) materials

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The structure for restriction of use of the substances in our products and in the process
RANK In the products In the process
A: Prohibition
Shall not be contained Shall not be used (The use is prohibited in accordance with any active legal requirements)
B: Voluntary prohibition
shall not be contained after a certain time shall not be used after a certain time (the use is prohibited beforehand so as to avoid offence against potential regulations)
C: Reduction
Try reducing the amount of the substaces in use Try reducing the amount of the substaces in use (action for the reduction should be made under the long term scheme)
D: Preparation for reduction
prepare to reduce the amount of the substances in use Prepare to reduce the emission of the substances (Investigation of content of the substances/the alternative should be taken in the purchasing stage and in the development stage)

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Our activities (details)
The points of our survey and control for the content and the use of substances
1. To identify “substance/preparation” and “article” in purchasing the materials 2. To examine any substances to use, and to allow ourselves to purchase only the registered ones
(1) To manage “self-producing materials” and “purchased materials” under the one system (2) To obtain necessary information with not only Safety Data Sheet(SDS*) or Material Safety Data Sheet (MSDS*) but also our independent questionnaire to suppliers *They are almost alike and obligatory for chemicals manufacturers to
issue in Europe, Japan,etc
(3) To check our supplier’s confirmation of compliance, and compliance with export control regulations of Japan. (4) To check even very small content and impurities of environmental burden substances

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Our activities (details)
The objectives to check the substances contained in chemicals 1. To comply with national legislation in any countries where our manufacturing bases locate 2. To check and control the substances in examining for registration 3. To comply with export control regulations of Japan 4. To exclude any pollution or any accidents which may occur in transporting the substance, and exclude any potential risk of offence against relevant laws 5. To collect complementary information about the substance which is not reported in the SDS or the MSDS 6. To support our customer’s Green Procurement activities by providing material declaration considering cases of transforming the substance to an article or incorporating into it in the process

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Our activities (details)
The objectives to check the substances contained in articles 1. To comply with product environmental legislation including European relevant legislation such as RoHS, ELV 2. To provide material declaration about the specific substances in products 3. To support our customers in obtaining information available to their Green Procurement activities

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Substance / Preparation D/B Article D/B Selling product D/B
Declaration specifications Process specifications Material specifications
Material Declaration
Our Customers
Emission from factories Purchasing Manufacturing Shipment
Our Suppliers
Information about materials
*To obtain the purchased product information based on JIG(JGPSSI) in principle *To issue selling product information based on JIG(JGPSSI) in principle *MSDS,etc
Our Green Procurement communication system

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3.How do we manage compliance with product environmental legislation?

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04/1 04/ 1 04/1 04/7 05/1 05/ 1 05/1 05/7 06/1 06/ 1 06/1 06/7
Product development
Final supply
RoHS restriction coming into effect
( J u l y , ' ( J u l y , ' ( J u l y , ' ( J u l y , ' 0 6060606 )
Offers of the non-compliant models
Transition to the substitutes substitution or discontinuance (a part of products)
Offers of the compliant models
Arrangement period of our company stocks
:Request point of batch recognition
Our RoHS Activities
:Beginning of the label marking
Present
Exception control


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Mercury , Specific brominated flame retardants (PBB・PBDE) , Cadmium
- The entire abolition is already completed - The use has been already prohibited before the enforcement. - Purchasing of materials containing them is prevented by beforehand obtaining compliance confirmations from our suppliers
Hexavalent chromium
- The substance is now being used in some kind of materials for some specific usage - The use has been already prohibited before the enforcement (it is not to be used any more in newly developing models) - Purchasing of materials containing them is prevented by beforehand obtaining compliance confirmations from our suppliers
Abolished Almost abolished Our Activities for RoHS Restrictions

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Lead
-We are asking our customers for approval for specifications of the substitutes * the use of lead in ceramics, glasses and high- melting point solders are exempted under EU- RoHS/ELV
In progress
Our activities for RoHS are amounting almost to “activities for lead-free products” now
Our activities for RoHS are amounting almost to “activities for lead-free products” now
Our Activities for RoHS Restrictions

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1. We decline your orders for Non-Compliant products (started in January, 2006) 2. We practice marking "RoHS compliant / non- RoHS compliant“ in the packing labels on our all products
Our Policy Our Activities for RoHS Restrictions

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(α) stands for EU(European Union) “RoHS" . (β) indicates Compliant / Non-Compliant product. Y ; RoHS Compliant Product, N ; RoHS Non-Compliant Product (γ) stands for the current active version of the restriction. The character "(A) " stands for the current version of EU-RoHS Every time RoHS is revised, the indication may change among the Roman alphabet.
Marking for RoHS Compliant/Non-Compliant
< for RoHS Non-Compliant Products >
ROHS-N (A)
< for RoHS Compliant Products >
ROHS-Y (A)
(α) (β) (γ)

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Further issue
ISSUE: Shortening of the term of shift to RoHS compliant products (For customers who still use both non-compliant models and compliant ones)
ACTION: 1.To assist the equipment manufacturers with promoting the approval for RoHS compliant models 2. To discuss the time we may continue receiving their enquiry to non-compliant models and the time we may continue supplying the repair parts
Promotion of solution based on cooperation among the supply chain

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Thank you for listening!
http://www.murata.co.jp

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