In an increasingly competitive global economy, manufacturers must take every opportunity to improve their overall performance and increase competitive advantages. Engineering change orders provide a comprehensive means of changing existing products to help organizations better meet these goals.
What is an Engineering Change Order (ECO)?
An engineering change order (ECO) is a document used to implement modifications in the design of a particular product. The engineering change order plays a crucial role in new product development (NPD) and can be used to specify new product designs during the initial stages of development. They provide a comprehensive summary of changes, indicating all of the affected assemblies, components, and documents associated with them.
Assemblies are produced items crucial to manufactured products, such as the frame of a car. Components are the raw materials used in the manufacture of a product, typically purchased from external vendors. This makes it critical to include supply chain partners in the ECO process, including all communications. This will help prevent costly miscommunications that lead to production delays.
Best Practice: Ensure all stakeholders buy into the change by demonstrating a low implementation cost and the potential for increased revenues in the future.
Why use an ECO?
ECOs are typically used to solve problems that arise during manufacturing. Most commonly, they function to make repairs or improvements. This has the effect of optimizing a design while ensuring functionality. The exact action taken as a result of an ECO is usually a corrective measure related to at least one of the following:
- Production costs exceeding the budget
- Significant rise in defects from quality control and/or warranty claims from customers
- Obsolete components, which are often determined by external factors such as resource availability
- Compliance violations
Read on to see the benefits of implementing engineering change orders.
Engineering Change Order Benefits
ECOs are an efficient way of solving manufacturing problems with the input of multidisciplinary teams. As an evaluative mechanism, they can provide a basis for quantifying the impact of engineering changes, which in turn pushes the decision making process forward. These orders can affect either individual items being manufactured or the manufacturing process as a whole. Some of the benefits associated with ECOs include:
- Improves your competitive advantage, especially in regard to cost, quality, and/or marketing
- Expedites future problem-solving by organizing documentation of product changes
- Enables efficient workflows and communication with both internal teams and external suppliers
- Reduces design, manufacturing, and inventory errors
- Increases accountability by involving key stakeholders from all departments
- Keeps product development on budget and on schedule
Stages of the Engineering Change Process
This engineering change management process begins when someone identifies an issue with a product or manufacturing process. Next, the impact of the issue is further evaluated at the departmental level. An engineering change request (ECR) is then drafted which includes a suggested fix, affected parts, and an estimate of costs.
Key stakeholders, also known as a change control board, receive the ECR, including but not limited to engineers, supply chain partners, and management and continue through the approval process. After necessary revisions and careful consideration, the proposed change is either denied or agreed to. The stakeholders look at the impact of a change and feasibility. If agreed on, discussion of a solution may also begin at this time. If the suggested change is a crucial repair, the organization may have no choice but to move forward with an ECO. Even if the repair is costly and could cause production to be shut down, management is obligated to issue an ECO if the product is unsafe for customers.
With the change being deemed feasible, an engineering change order is drafted to summarize what modifications have been made. At this stage, unilateral updates may be made across diagrams, computer aided design (CAD) files, and standard operating procedures (SOPs). Final approval from key stakeholders is necessary before moving on to ensure all departments are on the same page.
Now that the requested change has been agreed upon, it can be put into practice. Those immediately affected are notified, making the change based directly on information found in the ECO documentation. Following the documentation and engineering change order process is key to maintaining traceability throughout the project.
ECO vs ECR
An engineering change request (ECR) differs from an engineering change order (ECO) in that these requests serve as prerequisites for putting an ECO in motion. ECRs determine the necessity and viability of a change by providing an estimate of the resources it will require. After review by key stakeholders, an ECO will be processed if necessary.
How does a modern industry solution enhance the ECO process?
A modern cloud-based PLM solution like Propel Software significantly enhances the process of an Engineering Change Order (ECO) by leveraging automation, real-time collaboration, and streamlined workflows. When implementing changes to a product's design process, a cloud-based PLM system allows for seamless management of ECOs throughout their lifecycle.
Firstly, automation plays a crucial role in accelerating the ECO process. Propel is built on Salesforce and is therefore able to provide automated workflows that guide the ECO through its various stages, such as initiation, review, approval, and implementation. Automated notifications and reminders ensure that all stakeholders are aware of their responsibilities and deadlines, reducing delays and improving overall efficiency. By automating repetitive tasks, such as routing the ECO for approval or updating the bill of materials (BOM), the cloud-based PLM solution saves valuable time and reduces the risk of human error.
Real-time collaboration is another key aspect of a cloud-based PLM solution that enhances the ECO process. With a centralized platform, engineers, designers, and other stakeholders can collaborate on ECOs simultaneously, regardless of their geographical locations. Real-time access to the latest product data, documents, and design specifications enables effective communication and decision-making. This collaboration eliminates the need for time-consuming meetings or email exchanges, expediting the ECO review and approval cycles. By facilitating prompt feedback and collaboration, cloud PLM solutions ensure that changes are implemented swiftly and accurately.
Furthermore, a modern cloud-based PLM solution helps organizations comply with regulatory requirements during the ECO process. The solution can enforce validation rules, ensuring that all necessary information and documentation are included before an ECO can progress to the next stage. It can also maintain an audit trail of all ECO activities, including who made changes, when they were made, and why. This audit trail aids in demonstrating compliance with regulatory standards and simplifies the process of regulatory audits.
Engineering change orders promote collaboration while preventing design errors to keep product development on track. Keeping accurate, up-to-date documentation of any and all changes made to your product plays a significant role in maintaining a competitive advantage.
Document change orders (DCOs) and manufacturing change orders (MCOs) play a similar role in the ongoing optimization of a manufacturing process. Modifications inevitably happen all the time over the course of a product’s development, so having a defined process for their review is essential.
In an ever-competitive global business environment, it is essential for organizations to act proactively and be well-prepared for shifts in the market that may require rapid adaptation. ECOs deliver the best possible outcome over the course of a product’s lifecycle by providing a universal methodology for making design changes.
Learn more about how solutions can streamline change management processes, such as more robust supplier communications, in our article Supplier Communities: The New Frontier in Secure External Collaboration.”