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In order to protect human health and the global environment, regulations governing the management of harmful chemical substances are becoming stricter around the world. For example, REACH regulation in the EU, TSCA (Toxic Substances Control Act) in the US, and the Chemical Substances Control Law in Japan. While cooperation from suppliers is essential in managing the chemical substances contained in products, with thousands of chemical types, it is not easy to keep track of these. In response, in order to properly manage chemical substances while reducing the burden on suppliers, the Hitachi High-Tech Group has developed chemNEXT, a cloud-based, fixed-price service for managing chemical substances contained in products. The service launched in February 2021 and supports safe and transparent manufacturing.
"We have a responsibility to leave a healthy global environment to the next generation. To protect human health and the global environment, chemical substances must be appropriately used and managed. At the same time, it is difficult for small- and medium-scale suppliers to spend the time and money to manage all of this. This is why we wanted to minimize the time and effort required, provide a system that is easy to manage, and visualize the status of in-house efforts, so that everyone could feel that they were contributing, if only a little, to environmental issues.
Kenichiro Kudo, manager of the Digital Supply Chain Development Department, Solution Development Division, Hitachi High-Tech Nexus, which developed the contained chemical substance management service chemNEXT, explains the significance of the project.
A large number of chemical substances are used in industrial products such as home appliances and electronic devices. However, if these are released during the manufacturing or disposal stages, the air, water, and soil will be polluted. Some of the chemicals used also cause health problems, such as having adverse effects on reproductive function or being carcinogenic.
The EU's REACH Regulation, which came into effect in June 2007 and which has become a leading model for chemical substance management, requires companies to bear the burden of proof for the safety of their products. Companies are required to monitor the chemical substances contained in their products and be obliged to grasp the presence or absence of chemical substances of very high concern (SVHC) and provide information. As of July 2021, there are 219 types of SVHC, and the number continues to grow with each revision.
It is obvious that Japanese companies must comply with domestic laws and regulations, but when finished products are exported to other countries, they must also comply with the laws and regulations of the destination country or region. Although it is the manufacturer selling the final product who is obligated to report the substances contained in the product, since the product is made up of various parts, it is necessary that this information be shared throughout the supply chain.
"In addition to the REACH Regulations, TSCA in the U.S. and the Chemical Substances Control Law in Japan are also becoming stricter, and the situation regarding chemical substances is changing at a dizzying pace. As a specialized trading company, Hitachi High-Tech Nexus delivers materials and electronic components to Hitachi Group factories. However, particularly over the past few years, we have been receiving an increasing number of inquiries from factories about how suppliers are managing chemical substances and what is contained in their products. To achieve this, we asked around to assess the situation." (Kudo)
Through interviews, it was learned that while each factory manages chemical substances, they were having difficulty in getting information from their suppliers. It was also necessary to request that suppliers enter data separately for each and every part configuration, which was an exhausting process. Upon visiting nearly 50 suppliers, there were comments such as "We don't know where to start" and "We don't know how to manage the collected data."
"For example, even just a single screw is made up of a base material, an anti-rust plating, an adhesive, etc., and the data for each of these must be managed. When it comes to battery packs, there are about 600 substances that need to be managed. Most of Hitachi's over 50,000 suppliers in Japan are small- or medium-sized companies that are unable to invest large amounts of manpower or money in this, so most of them were struggling with Excel and paper files." (Kudo)
chemNEXT was created in order to solve the problems that they face. chemNEXT is a service that has a complementary relationship with chemSHERPA, a free tool created by the Ministry of Economy, Trade and Industry to create data for managing chemical substances contained in products, and which enables central management of collected data in the cloud.
With chemNEXT, the progress of data management can be visualized in a cloud-based system, greatly reducing the labor required. Previously obtained data can be referenced to automatically determine whether to request data from a supplier, and only the required data can be automatically requested.
"With the advance of moves to IT, the increase of information, and the ease of connecting companies, I began to consider the purpose of Hitachi High-Tech Nexus. How can we contribute to society using the information and networks we have cultivated as a trading company, and what is something that only we can do? chemNEXT was developed by me asking myself this question. I believe that our company's unique purpose has finally taken shape." (Kudo)
The fee structure for chemNEXT is a subscription in which the contracting company pays a monthly usage fee. Mr. Kudo expects that "if management is visualized and this costs ¥100,000 without changing the amount of work required, the burden will be minimal and it will not be necessary to increase the number of people handling chemical substance management."
It is not easy to get suppliers to accept a new tool when many of them are already feeling over-burdened. The department in charge of chemNEXT has been holding briefing sessions for suppliers, which have been attended by about 300 companies so far. We are trying various things, such as drawing out honest opinions and questions from each company, and asking them about add-on features they need.
"Although it is truly a gradual process, as understanding deepens, we are seeing changes in awareness, such as that harmful substances must be reduced from the early stages of design. Visualizing the progress of data management will also help to encourage the development of products that are safe to use and contain fewer hazardous chemical substances." (Kudo)
In the future, we are considering leveraging the strengths of the Hitachi High-Tech Group technologies, "Observation, Measurement, and Analysis," to contribute in the form of total solutions for chemical substances at the product development stage. This would include providing information on regulatory trends and preliminary analysis services.
The system for connecting supply chains and sharing information that has been achieved through chemNEXT is likely to have a wide range of applications as the scope of CSR (Corporate Social Responsibility) expands and the ability of companies to respond is tested.
"The procurement of raw materials is also connected with environmental and human rights issues. As the perfect form of a BtoB business, it would be ideal if we could create a supply chain management database to integrate and manage information from various fields. We might be able to connect not only with suppliers, but also with users, developers, and engineers. We would like to leverage the Hitachi High-Tech Group technologies of "Observation, Measurement and Analysis," as well as the strengths of Hitachi High-Tech Nexus, with trading company functions, to realize safe and transparent manufacturing that does not place a burden on the environment." (Kudo)