DRAFT – October 6, 2000 Written by David Ling, HP [email protected]
VISION
DeclareNet is an internet business-to-government (B2G) e-service for (1) internet community between regulatory authorities and manufacturers, (2) compliance information exchange, and (3) regulatory tool for post-market surveillance. Our customers are regulatory authorities and product manufacturers. Our services are global, scalable and modular. Our initial focus is the IT sector, with future plans to expand to other industry sectors such as telecommunication products and consumer products.
Our vision is an open, global IT market where product regulations are based on the principle of “design once” to international standards, “tested once” in a competent laboratory, and demonstrated conformance by a “supplier’s declaration of conformity (SDoC).” This principle is embodied by the IT industry sector’s global vision called “One Standard-One Test, Supplier’s Declaration of Conformity (1-1SDoC).”
Our mission is to eliminate the need for pre-market testing and certification requirements that add cost and act as barriers to trade. Our strategy is to use the power of the Internet to help manufacturers and regulators bring safe, legal IT products to market fast, at an order of magnitude increase in operational efficiency.
PROBLEM STATEMENT
Every industrialized nation has or will have regulations on electromagnetic interference (EMI) and product safety of IT and telecommunications equipment. In the past 10 years, the world has seen a 7 fold increase of these types of regulations. Countries also set varying requirements for the archival of product conformance information on products, even after they have been discontinued. These requirements have evolved independently, without coordination and without consideration of whether the growing burden of regulation is adding value or protection to citizens. Regulators, particularly in emerging economies, are duplicating requirements in other countries or not knowing how to take advantage of existing work. The result is rapidly increasing complexity, unnecessary cost, and fragmentation of global markets.
COST OF MANAGING COMPLIANCE INFORMATION
Today a company must provide proof of conformity to each country upon demand by the local authority, customer or the public, using documentation and marking that must be customized to fit unique criteria in every market – the world has no standard way of making products’ compliance information available. Companies dedicate resources to learn of the requirements, manage the product regulatory compliance information, and provide response to inquiries. Often, this is accomplished through a complex, fragmented mix of company specialists, contracted representatives, and third-party certification bodies. The process is paper-intensive and extends to the company’s management of compliance documentation up and down its supply and distribution chain. This includes each company's suppliers, as well as documentation related to components added to their products by downstream partners and resellers. Multi-national companies spend tens to hundreds of millions of dollars to manage this compliance management complexity. Small and medium-sized companies without international product regulatory support resources may be locked out of some markets. Wrong, incomplete, or delayed compliance information to demanding regulators and customers can make otherwise well-designed products miss their market window.
COST OF REDUNDANT TESTING, CERTIFICATION, AND CONFORMITY STATEMENTS
As more countries are reshaping their economies to become more technologically competitive, we will continue to see a steady stream of new country product regulatory requirements for testing, certifications and conformity statements. Virtually all of these new requirements are redundant, because the products are re-tested and re-certified to the same international EMI or product safety standards. These redundant requirements add cost, delay product entry into markets, without adding any customer protection or value.
These costs are significant. A 1998 report by the U.S. International Trade Commission estimated over $3B annually in costs to U.S. companies and consumers for duplication of testing and certification of ITE and telecommunications equipment. Perhaps most significant is the delay in time to market imposed by confusing, unpredictable, and redundant certification requirements. A delay of weeks in product certification can wipe out a significant fraction of the entire life cycle of modern IT products. These costs and delays can make it uneconomical to enter small markets with high regulatory barriers to entry.
VALUE PROPOSITION
DeclareNet offers unique short term and long term benefits to overcome the problems outlined above.
conformance to standards and regulations for thousands of products. Manufacturers need only input their compliance data once to reach the whole world. Also, DeclareNet allows companies to aggregate and manage the compliance information of product components, up and down their supply and distribution chain, simply by cross-linking their DeclareNet listings with those of their upstream and downstream partners. Using DeclareNet, companies will realize significant improvement and cost savings in the management of supply chain compliance information. DeclareNet also addresses one of the key causes of non-compliance – a manufacturer is unaware of the regulator's requirements. Regulators will be able to post news, alerts and changes of its regulatory requirements. Companies can track and manage new and emerging requirements using DeclareNet.
Declarenet also offers a service to manufacturers in automating the payment of licensing or administrative fees required by some country regulators.
For regulators, DeclareNet offers a powerful, new tool for global surveillance of compliance. It is an easy one-stop access to find SDoC info from multiple manufacturers. Regulators can find the compliance information, or locate the company’s accountable party or technical expert for products in their markets.
In addition, regulators can conduct richer and deeper market surveillance than ever before. Regulators can conduct sophisticated searches to target their surveillance activities. Regulators can also share market surveillance results to avoid duplicating checks of “good” products, or to target suspected “bad” products.
Long-term, we believe a centralized access to manufacturers’ compliance information and market surveillance results will revolutionize product regulatory regimes throughout the world. Regulators will eliminate pre-market requirements for unique testing and certifications only if they have confidence in SdoC’s and in an effective post-market surveillance system. We believe DeclareNet offers regulators a better, more powerful post-market surveillance method and means to enforce accountability of manufacturers. In doing so, DeclareNet will remove a critical obstacle for regulators to accept SdoC’s in lieu of mandatory pre-market requirements. We believe DeclareNet will be the catalyst for global regulatory reform and streamlining that will open markets, and eliminate cost and delays for manufacturers.
Declarenet’s offer becomes more powerful and compelling with every new regulator or company that participates. The benefits increases exponentially as more participants use and provide rich information. Through this network effect, we believe DeclareNet will be able to achieve its vision for regulatory reform based on 1-1SDoC.
SERVICES AND OFFERINGS
DeclareNet contains basic compliance information (e.g., product name, model number, standards complied with, contact information of accountable parties, as well as other information at the supplier's option such as product certifications). Manufacturers are responsible for providing and maintaining the information. The manufacturers will pay a fee to have this information available through DeclareNet. This information will be accessible through secure logons for manufacturers and regulators, and non-secure logons to limited information to the general public. Regulators wanting to know more specific information about products, such as summaries of test reports and accreditation info of the labs where testing was performed, will be able to contact the company by hyperlink. Alternatively, manufacturers have the option of providing that information directly on DeclareNet.
Some key functionality for manufacturers are:
• Consistent input/output of product listing info. Enter product listing by (1) data entry per listing, (2) template derived from an existing listing (3) Linking to existing listings, or (4) machine-to-machine upload for manufacturers that have its own database.
• Product family. Ability to quickly and easily create product listings, as needed by marketing or other reasons, and associate them within a product family.
• OEM compliance management. Option to cross-link OEM’s compliance info to a manufacturer’s listing. Option to show or hide OEM’s compliance info and accountability in your declaration.
• Archival capability
• Custom news and alert of audits by regulators. Tools to respond and track inquiries.
• Links to the actual product’s SDoC (required pdf format) web or attached via file upload.
• Community features. General news, updates, education, calendar, closed user groups, links to service providers.
Some key functionality for regulators are:
• Communicate and list new and revised regulatory requirements. Consistent input/output of regulator news and event info.
• Customize interface. Track and manage open audits on-line.
• Surveillance tools. List all products and all companies claiming compliance, by specifying interested region (e.g. in U.S., EU). Sort
capability by (1) company (2) country of origin, or (3) product category (e.g. printers).
• Global surveillance. Share info with other regulators. Post market surveillance statuses and result by product listings. List postings of other regulators’ market surveillance results by product.
DeclareNet is an independent, incorporated company, separate from any interest in delivering its own products to market. This independence provides a neutral, non-discriminating relationship to companies and regulators. Our operating principles are:
• Open membership. Membership will be open and available on a non-exclusive basis to all electronics OEMs, manufacturers, suppliers and distributors.
• Equal access. All company members will have equal access to DeclareNet’s services. All regulators that have either adopted 1-1SDoC regulatory system or have reduced, removed or do not have pre-market requirements for electromagnetic interference or product safety of IT products will have full functionality of the web-site.
• Confidential. DeclareNet will protect the confidentiality of proprietary information.
• Non-exclusive. Members have the option to continue to work with alternative exchanges, consultants, certification bodies or other service providers.
