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ERP 101 Series: Engineering Revisions and Engineering Change Order (ECO)

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ERP 101 Webinar 3 discussed:
1.Controlling changes made to components and products.
2. The similarities and differences between Revisions and Engineering Change Orders
3.How changes are communicated to the departments and the MRP system planning supplies and demand

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ERP 101 Series: Engineering Revisions and Engineering Change Order (ECO)

  1. 1. ERP 101 Engineering Revisions and Engineering Change Orders (ECO) David Bush Senior Manufacturing Consultant, Rootstock
  2. 2. The ERP 101 Webinar Series Date Topic Aug 2, 2016 An Introduction to ERP for Manufacturing Aug 16, 2016 Engineering – Learn how to create Part Master Records and Bills of Material Aug 30, 2016 Engineering – Learn how Change Orders and/or Revisions ensures that ERP system data is accurate and up-to-date Oct 11, 2016 Shop Floor – Explore how ERP is used to create and maintain Work Centers, Routings and Procedures TBA Shop Floor – See how scheduling the Shop Floor through ERP controls Labor and Machines TBA Procurement – Link your Vendors and Purchased Parts via ERP TBA MRP – Step though an overview of this vital ERP subset TBA Sales – See how you can link your Customers and Products via ERP TBA Manufacturing Accounting – An overview using standard cost TBA Manufacturing Accounting – An overview using weighted cost
  3. 3. Meet Our Speakers David Bush Senior Manufacturing Consultant, Rootstock • 30+ years of manufacturing and MRP/ERP systems experience • Previously at General Microcircuits, Consona Corporation, Relevant Business Systems, Inc
  4. 4. A Recap • In the last episode, we discussed: – Part Numbers • Format • Description • UOM • Source • Type • Using Parts to Create Bills of Material
  5. 5. A Recap • Bills of Material (BOM) – Multiple Levels – Components, Sub Assemblies, Reference Items, Tools and Fixtures – Scrap factors and Set-up Quantities All of this is used by MRP to calculate material needs
  6. 6. In This Episode • What additional considerations could affect material planning? – We have our part numbers, and we’ve put them together in a bom. • We’ve identified the quantity required to build the next higher assembly. • We’ve adjusted that quantity by various factors. – What happens when change occurs? • New styles offered • Safety features added • Parts no longer available How do we control changes that affect MRP?
  7. 7. Handling Change that Affects MRP • Revisions • Engineering Change Orders
  8. 8. What Is an Engineering Revision? • An alpha-numeric code that identifies a specific change or adjustment to a part. F/E, Rev 0, Rev A, Rev A1, etc. • A documented change to a part, subassembly or final assembly – May be minor or significant but does not affect form, fit or function (revised parts are interchangeable) – May be prompted by sales, engineering design or availability from vendor. – Formal method required by company to control the change and it’s possible effects
  9. 9. What Does an Engineering Revision Control? • Revisions typically include Pending, Released and Implemented statuses. • How is each Revision used? • Department sign-offs typically done outside of the system under Revision control. • System only recognizes Implemented Status, so – Why use Pending and Released status at all? – What benefits come from controlling these statuses? – Revision Status tells MRP what to plan. – Revisions may happen at any level of a bom from purchased parts to finished goods.
  10. 10. What Does an Engineering Revision Control? • What if the revision is to add and/or delete parts, rather than change existing parts. How is that handled? • Part no longer available for purchase, replaced with new part. • New options added and others deleted. – Revision still required, but now the date feature of Revisions comes into play. Add Revision Date and Delete Revision Date. Example: Part A is being replaced by Part B. A revision is needed for both parts.. Part A will have a ‘Delete’ Revision and part B will have an ‘Add’ Revision, both with same date. Let’s look at our bicycle for an example of how and why this might be done.
  11. 11. Lets Look At An Example • Braking system redesigned due to problem with brake pads. • New fiber pads will replace the old rubber pads on this purchased assembly. How would Revision control be used, and what issues would need to be handled?
  12. 12. Changes to Purchased Sub-Assembly • 1. Is new part number required or can it be handled via Revision Control? • 2. Create Revision at the purchased part (brake assembly) level. • 3. Determine how change will affect existing stock and purchase orders. Will they: – A. Be used up and then switch to new assy? – B. Be scrapped? – C. Be reworked by you or the vendor?
  13. 13. An Important Consideration • Revision Control does not control physical inventory.. that is done at the part number level, not part number/revision. • So, it is possible to have different revisions in inventory of the same item. • This must be handled by material control. • The ERP system MAY track revisions in inventory, but we’ll discuss that option during the webinar on physical inventory.
  14. 14. What if MORE Control is Required? • What if informal sign-offs won’t cut it? Now we move to Engineering Change Orders (ECO). – ECO’s work in conjunction with Revision Control to provide a more formal system to handle change. – Main difference between ECO and Revisions is a formal sign-off by various departments BEFORE the change can be implemented. • A. - Pending, Released and Implemented Status remain, but at ECO level instead of Revision. • B. - Individuals are typically given the ability within the ERP system to create and maintain ECO’s. • C. Sign-offs are required (again, within the system by those given that ability) by Engineering, Material Control, Purchasing and possibly other departments.
  15. 15. In Review • Change is INEVITABLE and the ERP system is designed to handle it via Revisions and ECOs. • Revision Control is a less formal method, but still requires status changes and implementation/deletion dates. • ECO’s incorporate all of the features of Revision Control, but add a more formal system of sign-offs within the ERP system. ECO’s become the controlling mechanism.
  16. 16. Where Do We Go From Here? • Shop Floor Control – Work Centers – Processes – Operations – Sub-contract Operations – Setup and Run Considerations – Scheduling Labor and/or Machines
  17. 17. Q&A www.rootstock.com 888.524.0123 marketing@rootstock.com
  18. 18. The ERP 101 Webinar Series Date Topic Aug 2, 2016 An Introduction to ERP for Manufacturing Aug 16, 2016 Engineering – Learn how to create Part Master Records and Bills of Material Aug 30, 2016 Engineering – Learn how Change Orders and/or Revisions ensures that ERP system data is accurate and up-to-date Oct 11, 2016 Shop Floor – Explore how ERP is used to create and maintain Work Centers, Routings and Procedures TBA Shop Floor – See how scheduling the Shop Floor through ERP controls Labor and Machines TBA Procurement – Link your Vendors and Purchased Parts via ERP TBA MRP – Step though an overview of this vital ERP subset TBA Sales – See how you can link your Customers and Products via ERP TBA Manufacturing Accounting – An overview using standard cost TBA Manufacturing Accounting – An overview using weighted cost Sign Up Now

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