GTDC Worldwide Vendor Workshop Madrid, June 1415, 2006 WEEE: Distributor activitiesrecommendations

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GTDC Worldwide Vendor WorkshopMadrid, June
14-15, 2006WEEE Distributor activities/recommen
dations

• Karel EveraetVice President LegalIngram Micro
  Europe

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Members GTDC WEEE Committee

• Actebis Ruud Pels, Stephanie Babiel
• Avnet Axel von Netzer, Ulrike Telschow
• Bell Micro Helen Hancock
• GE Access Peter Muniz, Susan Bell
• Ingram Micro Karel Everaet, Matthias Aigner,
  Thomas Lingen
• Magirus Christine Hoehn
• Scribona Peter Maipuu
• Tech Data David Vetter, Norbert Sourek

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Agenda

• GTDC WEEE Initiative and Recommendations
• Impact of WEEE on the Distribution Channel
• Practical Solutions to Handle WEEE Obligations
• Status of GTDC Recommendations
• Recommendet Actions GTDC

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GTDC Meetings

• Distributors and Vendors jointly investigated
  most practical and most cost efficient solution
  to handle WEEE obligations

Meeting Brussels December 2, 2004 Meeting of
GTDC WEEE subcommittee Attendees GTDC members
Meeting Frankfurt October 7, 2004 Executive
Meeting Attendees Acer Fujitsu-Siemens HP IBM
EMC Seagate Sun Microsystems Symantec
Meeting Munich April 12, 2005 Working Group
Vendors and Distributors Attendees Acer Linksys
Apple FSC Cisco Microsoft NEC EMC HP Lexmar
k LGE
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GTDC Meetings, ctd.
Meeting Brussels May 24, 2005 Working Group
Vendors and Distributors Attendees Acer Apple
Cisco FSC HP Epson LGE Lexmark Linksys
Microsoft IBM Lenovo
Meeting Prague June 16, 2005 Executive
Meeting Attendees Acer FSC HP IBM EMC Seagate Su
n Microsystems Symantec
Meeting Paris February 7, 2006 Working Group
Vendors and Distributors Attendees Apple Cisco F
SC HP Hitachi Intel Maxtor Samsung Seagate Sony Su
n Microsystems
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Recommended Actions GTDC Prague Meeting

• Labeling Put on the market
• Standard positioning letter to Resellers upon
  request
• Available on GTDC web site, Distributor and
  Vendor web sites
• Registration, Reporting, Double Loading
• Vendor Managed Process
• Default Action Distributor is Producer
• RoHS (Restriction of Hazardous Substances)
• Vendors actively abandon restricted substances in
  production process
• Consider April 2006 as a hard stop to avoid
  inventory issues in July 2006.

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Agenda

• GTDC WEEE Initiative and Recommendations
• Impact of WEEE on the Distribution Channel
• Practical Solutions to Handle WEEE Obligations
• Status of GTDC Recommendations
• Recommendet Actions GTDC

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Distributor deemed  Producer  in case of
 import 

• WEEE-Directive (Directive 2002/96/EC)

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Distributor deemed  Producer  in case of
 Import 

• National WEEE Legislations
• Two Criteria
• Importing for the first time
• Putting on the national market
• Example 3 (11) German ElektroG
• Producer means any person or legal entity who
  imports for the first time into the territory
  covered by this Act and places it on the market
  

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WEEE obligations

• Product Compliance
• Labelling
• Product Design
• Information Compliance
• for Users
• for Treatment Facilities
• Registering at Producers Registers
• Reporting of quantities put on the (national)
  market
• Take Back of WEEE

Brand Manufacturer
Brand Manufacturer?
Distributor?
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The Distribution Channel in Europe

• 4 Basic Business Models
• Model 1 Buy Local - Sell Local
• Model 2 Buy Cross Border (Import) - Sell
  Local
• Model 3 Buy Local - Sell Cross Border
• a. to affiliate b. to reseller
• Model 4 Buy Cross Border - Sell Cross Border
• a. to affiliate b. to reseller

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Business Model 1 Buy Local - Sell Local
Germany
Distributor
Reseller
Brand Manufacturer
invoice
goods
Producer Brand Manufacturer
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Business Model 2 Buy Cross Border - Sell Local
Germany
Germany
Ireland
Distributor
Reseller
Brand Manufacturer
invoice
goods
Producer Distributor in Germany
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Business Model 3a. Buy Local Sell Cross border
(Affiliate)
Germany
Austria
Distributor
Distributor Affiliate
Brand Manufacturer
invoice
goods
Reseller
Producer Brand Manufacturer in
Germany Distributor Affiliate in Austria
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Business Model 3b. Buy Local - Sell Cross border
(Reseller)
Sweden
Denmark
Distributor
Reseller
Brand Manufacturer
invoice
goods
Producer Manufacturer in Sweden Reseller
in Denmark
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Business Model 4a./b. Buy Cross Border - Sell
Cross border
Germany
Italy
Ireland
Distributor Affiliate
Distributor Affiliate
Brand Manufacturer
invoice
a
goods
b
Reseller
Producer Distributor Affiliate (a) or
Reseller (b) in Italy
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Double Loading
Example IM Nordics Shared Warehouse in Sweden
Reseller DK
IM SW
Brand Manufacturer
DK WEEE-cost (Reseller)
SW WEEE-cost (Manufacturer)
Product price

• WEEE cost is added twice to product price
  (Double Loading)
• Product has to be reported twice but can only be
  taken back once
• Price is not competitive
• Reseller has to fulfill all manufacturer
  obligations
• EU End Customer pays WEEE cost twice

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Agenda

• GTDC WEEE Initiative and Recommendations
• Impact of WEEE on the Distribution Channel
• Practical Solutions to Handle WEEE Obligations
• Status of GTDC Recommendations
• Recommended Actions GTDC

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Practical Solution to Handle WEEE in the
Distribution Channel

• Vendor Managed Process
• Manufacturer increases sales price to Distributor
  by (average) WEEE cost
• Distributor reports to Manufacturer on which
  national market product was placed
• Manufacturer assumes all WEEE obligations for
  this market

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Vendor Managed Process
Producer Register (Sweden)
Producer Register (Denmark)
2. Manufacturer reports to competent Producer
Register
invoice
Distributor Affiliate
Distributor Affiliate
Brand Manufacturer
goods
1. Distributor reports to Manufacturer on which
local market product has been placed
Reseller
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Advantages of Vendor Managed Process

• No Double Loading
• No Double Registration (Manufacturer various
  Distributors)
• No Double Reporting (of same product at
  different Producer Registers)
• No Exchange of WEEE Data (WEEE Weight, WEEE
  Category, WEEE Type of Equipment) needed between
  Manufacturer and Distributors
• IMs Central European SKU Creation Team creates
  approx. 16.500 new SKUs per month
• Large portion of SKUs is in scope of WEEE
• Correct handling of different WEEE Date for 25
  Member States (almost) impossible.

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Agenda

• GTDC WEEE Initiative and Recommendations
• Impact of WEEE on the Distribution Channel
• Practical Solutions to Handle WEEE Obligations
• Status of GTDC Recommendations
• Recommended Actions GTDC

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Labeling Put on the Market

• Prague Meeting recommendation
• Standard positioning letter to Resellers upon
  request
• Available on GTDC web site / distributor and
  vendor web sites
• Action taken
• Letter agreed and made available for use

ü
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Registration, Reporting, Double loading

• Prague Meeting recommendation
• Vendor Managed Process (VMP)
• Default Action Distributor is Producer
• Action taken
• VMP broadly accepted as best solution to handle
  WEEE obligations
• GTDC established relation with EICTA to further
  lobby for VMP with member states
• Increasing number of large European Vendors
  implement VMP with Distributors

ü
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RoHS

• Prague Meeting recommendation
• Vendors actively abandon restricted substances in
  production process
• Consider April 2006 as a hard stop to avoid
  inventory issues in July 2006
• Action taken
• Many Vendors confirmed RoHS compliance ahead of
  schedule
• Not all inventory issues solved
• Not all customers are willing to accept
  non-compliant products after July 1 (even if put
  on the market before July 1)

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Agenda

• GTDC WEEE Initiative and Recommendations
• Impact of WEEE on the Distribution Channel
• Practical Solutions to Handle WEEE Obligations
• Status of GTDC Recommendations
• Recommended Actions GTDC

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Vendor Managed Process

• Vendors to support efforts of Environmental
  Compliance / WEEE Teams to implement VMP
• Vendors and distributors to continue lobbying
  with legislators and national producer registers
• Vendors should be able to take over WEEE
  obligations from and register on behalf of
  importing Distributors
• Registering at Producer Registers should only
  require presence in one European member state
  (like e.g. in Germany)

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RoHS

• Vendors to continue efforts to ship only
  compliant products
• No shipment of non-compliant products to
  distributiors after June 30
• Clear communication from vendors and distributors
  to resellers that non-compliant products may be
  sold after July 1 if put on the market before
  that date

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• WEEE make it happen.