1) Engineering change management is a critical but often poorly defined and executed process for managing changes to products and ensuring compliance. It typically involves four steps - change request, change notice, change order, and change verification. 2) Automating the engineering change management process can provide benefits like faster time to market, lower costs, reduced inventory waste, improved decision making, and increased compliance. However, many companies still rely on tools like Excel and lack an integrated process view. 3) The presentation proposes developing a single, integrated engineering change management process supported by enterprise software. This could help organizations more effectively engage stakeholders, reduce variation, eliminate waste, and increase profits on new products.

1. Engineering Change
Management:
The Process
John M. Cachat
jmc@peproso.com
© Copyright John Cachat

2. About John M. Cachat
• Driving Business Performance
– Helping companies align their business and technology
– Focus on people, process, and then the technology
– Subject matter expert on business process management
– On-going research into next generation of technology for enterprise
systems
• 28 years experience in enterprise systems
– USAF Research Project (1985)
– Founder of enterprise quality software company (1988)
– Chair of ASQ technical committee on computerizing quality (1992)
• Trusted advisor to global organizations, government agencies,
and professional groups
http://www.linkedin.com/in/johncachat
2 © Copyright John Cachat

3. Housekeeping
Phones are muted
Use the question
block for questions Copy of presentation
available upon request
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4. Today’s Discussion
• Why Now?
• Engineering Change Management Process
• Identifying & Eliminating Waste In The Process
• The Role of Software
• Summary
• Free Proof of Concept Offer
• Q & A
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5. Why Now?
• As manufacturing firms increase their rates of
new product introduction, the management of
engineering change has become a major and
ongoing challenge.
• The need for rapid engineering change is an
requirement of a rapid rate of new product
introduction and short product life cycles.
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6. Engineering Change is
More Critical Than Ever?
• Engineering change is often poorly defined
and poorly executed
• Implementation of Engineering changes are
often disruptive and costly
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7. Engineering Change
Organizational Pressures
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8. 8
Engineering Change Complexity
• Single Product with Multiple Change Requests
– Grouping multiple changes into a single revision change
• Single Change Request Against Multiple Products
– This change is applied to 10 different parts
• Single Product that Affects Multiple Products
– This part is used in 5 other assemblies (configuration
management)
© Copyright John Cachat

9. Engineering Change Management
A Four Step Process
1.
ECR
Change
Request
2.
ECN
Change
Notice
3.
ECO
Change
Order
4.
ECV
Change
Verification
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10. Change Request
• Source
– Customers
– Internal
– Suppliers
• Deviation/Waiver/Permanent
• Should you or shouldn’t you do it?
– Review impact & related costs
– Determine risk
– Other parts, processes, etc.
• Who get’s to vote? – create some rules
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11. Change Request
Should you or shouldn’t you?
• Determine risk
– Safety issue?
– Cost versus the right thing to do
– Short term versus long term
– Stop shipments / manufacturing
NOW?
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12. Change Request
Should you or shouldn’t you?
• Review impact & related costs
– Product Life Cycle stage
– Impact on related parts
– Current inventory (shipped,
warehouse, internal, & at
supplier)
– Impact on reputation
12 © Copyright John Cachat

13. Who Needs to Vote?
(Create Some Rules)
• Critical
– Financial impact of $XXXX or greater
– Affects product in the field
– Safety related issue
**A product recall is always a Class I change.
13 © Copyright John Cachat

14. Who Needs to Vote?
(Create Some Rules)
• Major
– Affects the service organization, inventory or
outside organization
– Financial impact of under $XXXX
14 © Copyright John Cachat

15. Who Needs to Vote?
(Create Some Rules)
• Minor
– Includes pre-production products, accounting
functions, clarifications, typo corrections and
changes that do not affect the form, fit, or
function of the product or part
– Do not affect inventory
– Outside the organization
– Financial impact less than $XXXX
– Does not affect field service
15 © Copyright John Cachat

16. Engineering Change Management
A Four Step Process
1.
ECR
Change
Request
2.
ECN
Change
Notice
3.
ECO
Change
Order
4.
ECV
Change
Verification
16 © Copyright John Cachat

17. Change Notice
• Who needs to know about the change and what
do they have to do in order to prepare for the
change?
– Engineering
– Manufacturing
– Quality
– Purchasing
– Marketing (packaging)
– Customers
– Suppliers
• What needs to be updated?
17 © Copyright John Cachat

18. Change Notice
• What is impacted?
– Already shipped
– In the warehouse
– In production
– At the supplier
• What needs to be updated?
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19. Change Notice
What Needs to be Updated?
19
Pricing
Purchase Order Review
Inspection Requirements, Gauging
Tooling
Documentation (Procedures, Work
Instructions)
Blueprints, drawings
Employee Training
Customer Approval?
(Design Authority)
Physical Part Counts
BOM Change
Manufacturing Routing
DFMEA
PFMEA
Control Plan
Special, Critical, Key Requirements
Material Specifications
© Copyright John Cachat

20. Engineering Change Management
A Four Step Process
1.
ECR
Change
Request
2.
ECN
Change
Notice
3.
ECO
Change
Order
4.
ECV
Change
Verification
20 © Copyright John Cachat

21. Change Order
• Everything is ready to go
• When do we start?
– Immediately
– By Date
– By Inventory/production schedule
• Existing parts (rework, scrap, use as is)
• New parts
21 © Copyright John Cachat

22. Engineering Change Management
A Four Step Process
1.
ECR
Change
Request
2.
ECN
Change
Notice
3.
ECO
Change
Order
4.
ECV
Change
Verification
22 © Copyright John Cachat

23. Change Verification
• % of changes that were correct
• Did we get what we expected?
– Cost reduction
– Quality improvement
• If yes, great and review other parts that we
can apply the same change to (look across and
read across)
• If no, start over
23 © Copyright John Cachat

24. Automation Ideas
• Small company versus big company
• The current “state of the art” in
most companies include MS Project
& MS Excel
• These tools are personal
productivity tools – not enterprise
business systems
24 © Copyright John Cachat

25. Automation Ideas
• Look at the product lifecycle and look for gaps
• Process view, not department view, not a
document view
• Start with a process flowchart
25 © Copyright John Cachat

26. 26
Engineering Change Process
What it actually is
What you think it is
What it should be
© Copyright John Cachat

27. Big Company Challenge
Where does Engineering Change Belong?
27
Tie everything together
with business workflow
© Copyright John Cachat

28. How Do I want Engineering Change to Work?
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29. Your Form, Not Their Screen
29
• Little, to no, training
required
• No need to change
existing
documentation
• Use Email as the user
interface (and cell
phones)
• Make their job easier
© Copyright John Cachat

30. Engineering Change Process
3
Software
2
Process
1
People
30 © Copyright John Cachat

31. Benefits / Value
• Increase Revenue
– Develop new markets and gain market share by collaborating more
directly with the customer and delivering customer-specific goods
more quickly
• Competitive advantage
– Faster time to market
– Reduce design cycle times and product costs through collaboration
– Lower costs with more efficient use of resources in product
development
– Reduce delivery lead times
• Compliance and risk mitigation
– Rock solid process with robust audit trail
31 © Copyright John Cachat

32. Benefits / Value
• Reduce Inventory Waste
– Stop making parts to the wrong revision
– Reduce component obsolescence
– Faster and more effective change management with Suppliers
• Improve Decision Making Analysis / Management Review
– Change Verification feeds information back into Engineering
– View a single, consistent record of figures and analytics
related change management
– Improve financial analysis by capturing engineering change
costs and cycle times
32 © Copyright John Cachat

33. Increase Profit on New Products
33
INCREASE
PROFIT ON
NEW PRODUCTS
0
20
40
60
80
100
120
Design Proto Pre-Prod Production
Program A
Program B
Number of Engineering Changes by Product Stage
© Copyright John Cachat

34. Increase Profit on New Products
34
INCREASE
PROFIT ON
NEW PRODUCTS
Turn Around Time (in Days)
0
5
10
15
20
25
30
35
Change
Request
Change Notice Change Order Change
Verification
Program A
Program B
© Copyright John Cachat

35. 35
Summary
Engineering Change Management
• There are 4 steps – not one
• Engage the people
• Single process is critical
– Reduce variation (Six Sigma)
– Eliminate waste (Lean)
• Technology
– Consolidate stand alone tools
– Tie together with business workflow
– Use existing enterprise software data
© Copyright John Cachat

36. 36
Summary
Engineering Change Management
• This is a HUGE opportunity
for every organization
–More revenue
–Lower costs
–Lower risk
–Higher compliance
• When do you add
people to the process?
© Copyright John Cachat

37. About Us
John Cachat
jmc@peproso.com
Contact
Proven expertise in training
and document management
systems
Rapid Solution
Development™ process
Services
Assess Current Status
Develop Short and Long
Term Plans
Develop Specific Solutions
to Your Problems
Assist in ROI Analysis
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38. FREE Proof of Concept
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We
We

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John Cachat
jmc@peproso.com
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Engineering Change Management: The Process
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