1. F5412E 4Gb FC-SAS/SATA-II RAID System By Matthew Alexander Haines Student Number: 416820

2. The product that has been chosen to show how environmental factors affect the price of a product is the F5412E 4Gb FC- SAS/SATA-II RAID System manufactured by Xyratex. RAID stands for Redundant Array of Independent Disks; these systems are used to store data across five independent disks; on one of the disk is a piece of data that tells the system where all the data is stored and on what disk. This is very useful if one of the disks goes down because it makes it easier to recover the lost data. RAID systems use fibre optic cables to connect to the systems that will be storing data onto the RAID, the speed of the system varies depending on the model. The model chosen for this report has a connection speed of 4Gb/s. (Xyratex, n.d.) The electronic circuit that is inside the RAID system cost approximately $50 USD to manufacture.*(Personal Communication, 22 October 2008) *(For commercial reasons the price of the circuit in the RAID system is an assumption and not the real cost of the circuit and RAID system.)

3. The main factors that affect the price of the RAID system are as follows: Legislation Ethics Competition All of these are general factors, they comprise of three or four factors that affect the final price of the product. These factors will be explained and how they affect the price of the final product

4. Legislation is split into separate factors; these are: RoHS compliancy, CE standards mark and UL Approved. These factors all make the price of the electronic circuits in the RAID system more expensive. The cost to meet these is varying; the chart to the right shows the percentage cost of these factors against each other.

5. RoHS stands for Restriction of Hazardous Substances (EU RoHS Directive, 2003, P.1), this means the sort of materials that can be used when manufacturing electronic circuits are restricted. Lead-free solder has to be used. This directive is linked to the Waste Electrical and Electronic Equipment Directive (WEEE). There are six hazardous materials that are restricted, some of these materials are: Lead Mercury Cadmium Hexavalent Chromium (Cr 6+ ) The restriction on lead affects the electronics in the F5412E RAID system as the lead-free solder requires higher temperatures to melt; this makes the overheads increase as higher temperatures are needed to be maintained; this adds about $0.10 to $0.20 USD per $50 USD circuit for the RAID system (Personal Communication, 22 October 2008). As higher temperatures are used the components become brittle; so this makes the yield of circuits decreases, the cost is incurred through rework of the circuit and even in waste as the circuit has to be disposed of. This adds another $0.10 to $0.20 USD per $50 USD circuit (Personal Communication, 22 October 2008).

6. The CE Approval mark is a mandatory Directive that needs to be met for any product that is to be sold in the EU. The CE mark shows that the product satisfies all 30 directives that are set up to make sure that a product is to EU standards. (EU CE Mark overview, 5 September 2008) The cost to get involved to get the approval varies with different products but can be several thousand pounds. This is usually paid upfront and doesn’t impact the price of the overall product. (Personal Communication, 22 October 2008)

7. UL Approval is similar to the CE mark; it has a set of specifications that the product must satisfy to be approved. UL Approval is an American standards for electronics. (UL Approval Overview, n.d.) To obtain UL Approval the product must fulfil the requirements that UL set. Again the cost to get UL Approval varies between products but can cost up to several thousand pounds. This does not make the product price increase and is again paid upfront as part of the cost to bring the product to the market. (Personal Communication, 22 October 2008)

8. Xyratex have a Corporate Social Responsibility policy. (Xyratex CSR report, 2007) This policy can be split into two areas which are Responsible Design and EICC. The responsible design is to ensure that no hazardous substances are used in the electronic circuit, this policy is linked to the RoHS legislation. Due to this the affect on the product is around $0.10 to $0.20 USD per $50 USD circuit. (Personal Communication, 22 October 2008) EICC stands for Electronic Industry Code of Conduct; this code sets the standards that are to be met; these ethic standards include: no child labour, fair business, advertising and competition and community engagement. (Electronic Industry Code of Conduct, 2005) There is a cost involved to meet the standards but these are unknown.

9. There are two main types of competition that affect the price of the RAID system in question; these are: Competition in the supply chain- production of components Competitor companies The increased competition in the electronic industry has meant that components are being produced at a much lower cost; these components are generally resistors and capacitors. Using these un-branded components reduces the manufacture cost for the electronic circuit in the RAID system by approximately $3- $10 USD per $50 USD circuit. (Personal Communication, 22 October 2008) Competing companies affect the sales price of the unit because if a company is selling a similar product for less then to minimise customer loss the price of the unit has to be less then that of the competitors.

10. USD % of totalComments Cost of Printed Circuit Board inside RAID $ 50.00105.93% RoHS compliant Design $ 0.100.21% Increased overhead cost from running processes at higher temperatures. Fall out from component failure / board re-work $ 0.100.21% Increased risk of component failure as a result of running processes at higher temperatures. Cost is that of re-working PCB's and/or scrap material cost (spread over annual volume). Less reduction from use of lower cost components $ -3.00-6.36% Increased competition in the component marketplace from SE Asian sources particularly China and Taiwan. Typically resistor and capacitors and some connectors. Total Cost : $47.20 (Personal Communication, 22 October 2008) The table below summarises the affect of environmental factors on the pricing of the RAID system:

11. 1.According to P. Davison (Personal Communication, 22 October 2008) 2.Electronic Industry Code of Conduct, Version 2.0, October 2005 [Electronic Version], http://www.eicc.info/downloads/EICC_English.pdf http://www.eicc.info/downloads/EICC_English.pdf 3.EU RoHS Directive, (2003), The Restriction of Certain Hazardous Substances in Electronic Equipment [Electronic Version], http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:037:0019:00 23:EN:PDFhttp://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:037:0019:00 23:EN:PDF 4.CE Mark Overview, (5 September 2008), http://thequalityportal.com/q_cemark.htm http://thequalityportal.com/q_cemark.htm 5.UL Approval Overview, (Last updated 2008), http://www.ul.com/ulprodcert.html http://www.ul.com/ulprodcert.html 6.Xyratex CSR Report, (2007), http://www.xyratex.com/pdfs/company/CorpSR_1-0.pdf http://www.xyratex.com/pdfs/company/CorpSR_1-0.pdf 7.Xyratex RAID System Description, (n.d.), http://www.xyratex.com/products/storage-systems/storage- F5412E.aspx http://www.xyratex.com/products/storage-systems/storage- F5412E.aspx

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