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How to Streamline Engineering Change Orders (ECO), Revision Workflows and Processes

 

How to Streamline Engineering Change Orders (ECO), Revision Workflows and Processes


Dec 11, 2018
Manufacturing and Distribution

Streamline Engineering Change Orders (ECO), Revision Workflows and Processes

There is, perhaps, no more foundational component of a manufacturer’s success than the design and function of its products. The impact of the decisions made by engineers and product designers can impact everything down the line, and one miscommunication or missed detail can have a snowball effect, leading to production delays, budget shortfalls and disgruntled customers.

Parts and product designs often require iterative revisions and changes over time. Having the processes and tools in place to manage those changes is critical to providing cost-effective, uninterrupted supply to your customers.

Let’s explore how improving revision and change control processes through the use of enterprise resource planning (ERP) technology contributes to improving overall business results in three major areas.  

Managing Manufacturing Costs

When engineering triggers an engineering change order (ECO) to initiate changes to a product or process, it will list products or parts affected by the proposed changes and request reviews and approvals from those who may be impacted.

Managing that ECO in an ERP application enables the request to be routed to the appropriate people for review, and it calculates cost updates to help analyze the potential financial impact.

So, if a vendor changes its specifications on a part used to make your finished product, engineering will first need to evaluate whether it still meets specification requirements. Once deemed acceptable, everyone impacted by the change must receive timely notification.

Visibility of real-time data across an organization is imperative. An ERP helps you adhere to proper workflows for implementing the change in order to ensure optimal uptime, changeovers and smooth transitions in inventory, materials handling, production and other affected departments. Delays or miscommunication in any one area could halt production, result in the wrong parts being used or have severe financial implications.

You can put safety measures in place as well. If there’s a pending ECO, an ERP system can issue a notification on a workstation’s dashboard with a flashing warning signal, indicating that operators need to touch base with engineering to make sure they’re using the latest revision or component.

Using the wrong parts could have major consequences if a finished product is shipped to a customer and they discover it’s no longer compatible with their assembly or they need to manipulate their processes as a result. The ensuing chargebacks, returns, delays, potential loss of business and other financial impacts could be significant. It’s necessary to use consistent methods and processes to ensure accurate updates and to account for related costs in business forecasts and planning calculations.

Sales Effectiveness

Winning at each stage of the sales process — initial contact, quoting, getting the sales order, fulfillment and issuing reorders — requires the cost information to be accurately represented.

Increasingly, potential customers inquire whether you have defined processes and systems in place to ensure on-time delivery and consistent quality and that you can follow through on promises made. Demonstrating that you have rigorous ECO processes builds trust in your brand and offers peace of mind knowing customers won’t get stung later by added expenses or unexpected problems once they receive their order. An ERP system provides accurate, updated product information, and it can be leveraged as a major selling point for closing sales opportunities.

From an operational standpoint, your sales department needs to sell products with appropriate margins. Once again, accurate costing of products feeds many different areas of the business plan, and having errors or inaccuracies will cause needless work to catch up and determine what changed or what went wrong related to customer profitability or sales targets. An ERP system integrates seamlessly with most CRM platforms and is a vital tool for determining more accurate sales forecasts.

Design for Manufacturability (DfM)

Engineering is tasked with managing the form, fit and function of potential ECOs. If suppliers or the product design changes and any of these three areas are affected, you must initiate formalized changes to ensure production accuracy.

  • Form: What is it? (e.g., screw, panhead, size m3, etc.)
  • Fit: Does this part fit with another part?
  • Function: Does it do what is needed?

These three elements are typically evaluated before any change is initiated. Something as small as a different bolt could be a determining factor in a product’s performance. In critical applications, the smallest deviation in size, hardness, threading or material could require costly retooling, different fittings or reconfigurations in automated equipment.

There are additional considerations that may need updating, such as instruction documentation, bills of materials (BOMs), inventory changeover and timing sequences. If you don’t use the most up-to-date BOMs and routings, the operations team could manufacture a product using components from an old BOM or route version, resulting in a negative customer experience.

Another factor is whether cycle times are impacted. If, for example, an ECO results in increased cycle times for each product coming off the production line, any perceived savings could be quickly negated. Managing ECOs within an ERP helps ensure DfM success.

Creating visibility into each aspect of a product’s lifecycle and to those impacted by potential changes is a major function of an ERP system. Learn more about the foundational and far-reaching impact a modern ERP system can have on your planning, production and processes by reaching out to an experienced Wipfli representative today.

Author(s)

Wagner_Mike
Michael Wagner
Senior Consultant
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