Assisting Companies Leverage
Investments in SAP Solutions
Engineering Change Management
Overview and Best Practices
Eric S...
Assisting Companies Leverage
Investments in SAP Solutions
Agenda
 Definition of Change Management Process
 Issues and Go...
Assisting Companies Leverage
Investments in SAP Solutions
Definition of Change Management Process
 There are different ty...
Assisting Companies Leverage
Investments in SAP Solutions
Definition of Change Management Process
 To start with, a stand...
Assisting Companies Leverage
Investments in SAP Solutions
Issues and Goals
 While many businesses will have change manage...
Assisting Companies Leverage
Investments in SAP Solutions
Issues and Goals
 Implement a new change management process can...
Assisting Companies Leverage
Investments in SAP Solutions
Industry Standard Change Management Processes
 There are a numb...
Assisting Companies Leverage
Investments in SAP Solutions
Industry Standard Change Management Processes
 The previously m...
Assisting Companies Leverage
Investments in SAP Solutions
Typical Change Management Processes
 In the end, most companies...
Assisting Companies Leverage
Investments in SAP Solutions
Typical Change Management Processes
 Example 1 – Simple change ...
Assisting Companies Leverage
Investments in SAP Solutions
Typical Change Management Processes
 Example 2 - More complex p...
Assisting Companies Leverage
Investments in SAP Solutions
Typical Change Management Processes
 Example 3 – Much more comp...
Assisting Companies Leverage
Investments in SAP Solutions
Difference Between ECM and PCM
 In many companies, the change m...
Assisting Companies Leverage
Investments in SAP Solutions
Difference Between ECM and PCM
 PCM occurs when the Manufacturi...
Assisting Companies Leverage
Investments in SAP Solutions
Difference Between ECM and PCM
 Our recommended best practice i...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 There are three basic options for imp...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 When changing an object in SAP, you a...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 History of every change to the associ...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 The simple change process
 Very few ...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 A view of the SAP Change Master
© 201...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 A more controlled process – SAP ECR/E...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 ECR/ECO process (general flow)
© 2010...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 When the ECR/ECO process is used
 Th...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 More complex, utilizing notifications...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 A view of the a change notification
©...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 One of the major advantages to the no...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 More complex, utilizing notifications...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 Advantages and disadvantages of each ...
Assisting Companies Leverage
Investments in SAP Solutions
Change Management in SAP
 Our recommended approach is to have a...
Assisting Companies Leverage
Investments in SAP Solutions
Utilizing SAP Workflow
 What is SAP Workflow?
 SAP Business Wo...
Assisting Companies Leverage
Investments in SAP Solutions
Utilizing SAP Workflow
 Can be used to drive the entire change ...
Assisting Companies Leverage
Investments in SAP Solutions
Example Implementations – High Tech
 Via ECR/ECO process contro...
Assisting Companies Leverage
Investments in SAP Solutions
Example Implementations – Automotive Supplier
 Due to complexit...
Assisting Companies Leverage
Investments in SAP Solutions
Example Implementations – Medical Devices
 Very similar to prev...
Assisting Companies Leverage
Investments in SAP Solutions
© 2010 LeverX, Inc. Page 35
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Engineering Change Management - Overview and Best Practices

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Overview of the Engineering Change Management process, issues, goals, industry specific challenges, etc. This presentation also covers some successful SAP ECM implementations to help you gain some insight and knowledge about current industry best practices.
View my website www.sapplmworld.com for more information on SAP PLM.

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Engineering Change Management - Overview and Best Practices

  1. 1. Assisting Companies Leverage Investments in SAP Solutions Engineering Change Management Overview and Best Practices Eric Stajda and Shobhit Singhal
  2. 2. Assisting Companies Leverage Investments in SAP Solutions Agenda  Definition of Change Management Process  Issues and Goals  Industry Standard Change Management Processes  Typical Change Management Processes  Engineering Change Management (ECM) vs. Production Change Management (PCM)  Change Management in SAP  Utilizing SAP Workflow  Example Implementations © 2010 LeverX Page 2
  3. 3. Assisting Companies Leverage Investments in SAP Solutions Definition of Change Management Process  There are different types of change management, including  Organizational Change Management  Change management is a systematic approach to dealing with change, both from the perspective of an organization and on the individual level. A somewhat ambiguous term, change management has at least three different aspects, including: adapting to change, controlling change, and effecting change. A proactive approach to dealing with change is at the core of all three aspects. For an organization, change management means defining and implementing procedures and/or technologies to deal with changes in the business environment and to profit from changing opportunities.  What we are focusing on in this presentation is product change management © 2010 LeverX Page 3
  4. 4. Assisting Companies Leverage Investments in SAP Solutions Definition of Change Management Process  To start with, a standard definition of change management  The Change Management process in Systems Engineering is the process of requesting, determining attainability, planning, implementing and evaluation of changes to a system. It has two main goals: supporting the processing of changes and enabling traceability of changes, which should be possible through proper execution of a defined process.  Businesses will refer to their change process under a variety of acronyms, including  ECR (Engineering Change Request)  ECM (Engineering Change Management)  ECN (Engineering Change Notice)  ECO (Engineering Change Order)  Etc.  Despite the different acronyms, all change management process have the same goal in mind  Controlling and implementing changes in a controlled fashion © 2010 LeverX Page 4
  5. 5. Assisting Companies Leverage Investments in SAP Solutions Issues and Goals  While many businesses will have change management processes, they are always striving to improve  Current issues with change management processes include  Still working from paper forms  Current electronic system does not offer required capabilities  Current electronic system not integrated with other areas of organization (ex: Manufacturing)  Limited scope (ex: Only control change to drawings)  Not appropriately workflow enabled  Process is not lean  Cycle time is long  Extended supply chain not integrated with process  No ability to measure KPIs, business metrics, etc.  Visibility of change history limited © 2010 LeverX Page 5
  6. 6. Assisting Companies Leverage Investments in SAP Solutions Issues and Goals  Implement a new change management process can be difficult, because it requires a good deal of business change management  Everyone is used to the same process and not easily changed  Therefore, business goals and benefits should be identified early in the project and well communicated  Common business goals and benefits include  Leaner process  Automate process with workflow doing the heavy lifting  Simplify the process  Reduce cycle time  Improve collaboration during change and implementation process  Eliminate errors  Reduce costs based on miscommunication (ex: Wrong revision built)  Better internal/external communication of change  Paper-free process © 2010 LeverX Page 6
  7. 7. Assisting Companies Leverage Investments in SAP Solutions Industry Standard Change Management Processes  There are a number of groups offering standardized ways of doing change management, including  CM II – Institute of Configuration Management  Continuous improvement in ability to "change faster and document better." CMII evolved into a methodology for accommodating change and keeping (1) requirements clear, concise and valid, and (2) records and data accurate.  Wikipedia offers a glimpse of standard process  There are six main activities, which jointly form the change management process. They are: Identify potential change, Analyze change request, Evaluate change, Plan change, Implement change and Review and close change. These activities are executed by four different roles  Book: “Analysis on Engineering Change Management Based on Information Systems”  Engineering Changes (ECs) are inevitable and frequent in manufacturing enterprises. The primary challenge in efficient management of ECs arises because the sources as well as the effects of an EC are spread across different phases of the product lifecycle. With the application of information systems in enterprises, it becomes an urgent problem to run integrated engineering change management… © 2010 LeverX Page 7
  8. 8. Assisting Companies Leverage Investments in SAP Solutions Industry Standard Change Management Processes  The previously mentioned standards are good if you are starting from scratch or just looking for ideas on how to improve you current change management process  Sometimes looking outside the box gives us the best ideas  The goal of implementing a change management process should not be to just to shoehorn you existing process into an electronic system  Look around and talk with other companies about their experiences © 2010 LeverX Page 8
  9. 9. Assisting Companies Leverage Investments in SAP Solutions Typical Change Management Processes  In the end, most companies have similar change management processes with minor deviations  Everyone has a way to request change and how to implement a change  There are varying degrees of success and complexity  Some industries are much more complex and regulated  Ex: Medical device companies must meet validation and FDA requirements when making changes  Ex: Auto suppliers use changes as a way of capturing additional profits against a given contract © 2010 LeverX Page 9 Planning of Engineering Change Implementation of Engineering Change Release of Engineering Change ECR ECO ECN
  10. 10. Assisting Companies Leverage Investments in SAP Solutions Typical Change Management Processes  Example 1 – Simple change management process  Simplicity is based on number of approvers, objects controlled, groups involved in implementation, etc. © 2010 LeverX Page 10
  11. 11. Assisting Companies Leverage Investments in SAP Solutions Typical Change Management Processes  Example 2 - More complex process flow for engineering and production change management © 2010 LeverX Page 11 SUBMIT Evaluate (Facilitator) Review (Change Board) Create ECR (Initiator) Define Components (Facilitator) Design Work Review Release Implemented Last Edited 04-26-06 REV, K Change Board Signatures •Design Engineer •Manufacturing Engineer •Quality Engineer -PS&AE Signatures Senior Mfg. Eng Engineering Central - ECR/ECO Lifecycle Guide Select: •Product Line •Facilitator •Description •Reason for Change •Project # •Attach Specs to be Revised •Attach Parts to be Revised •Promote ECR Automatic e-Mail is sent to the Facilitator •Reviews proposed change •Reviews supporting documentation •Adds any additional supporting documentation if needed. •Create ECR approval route if needed. •Promote ECR to Review – only when any approval routes are completed. Automatic e-mail sent to Change Board Create Spec & Part Routes as needed. When notified that routes are complete: 1) Check that Specs are in the Review state. 2) Promote Parts to the Review state 3) Promote ECO to Design Work state. •Review all work •Approve ECO only • Review each object •Bulk Promote all Specs and Parts to the Approved state. • Review & Approve ECO • ECO is automatically promoted to the IMPLEMENTE D state. • Distribution Groups are notified. IF AUTO-CREATED: • Assign Mfg. Eng. • Set Priority • Set Release Distro- Group IF NEW RELEASE ALSO: • Set ECO Description • Assign Design Eng • Connect Spec & Part • Connect Files and/or Drawing Markups, if required • Assign Project # • Create Approval Route on ECO. • Promote ECO to Define Components Create ECO •Automatic from ECR or •Manual (if new) Signatures Senior Design Eng System automatically creates New Preliminary Revisions of Attached Spec & Parts •Create & Attach Markups •Check in any supporting documentation •Promote to Evaluate •Once the Change Board Approves – The ECR is automatically promoted to the Plan ECO state. •Automatic creation of ECO •Automatic Attachment of all Preliminary Specs & Parts •Automatic ownership change of all connected objects to the Responsible Design Engineer •ECO is Automatically Related to the ECR CompletePlan ECO ECR Automatically Promotes to Complete, When All Related Objects (ECO, SPECS & PARTS) and Routes Meet Completion Requirements. •Verify that All Related Objects (ECR, SPECS & PARTS) are Released and routes are Finished. •Promotes ECR to Complete state if appropriate. Note: 1.Drawing Markup Objects are promoted to Implemented (locked) when the ECO is promoted from the Create to Define Components State. No changes can be made to them. 2. If Drawing Markups are added in the Define Components State, the lock will occur when promoted to Design Work. •INITIATOR or FACILITATOR •FACILITATOR •APPROVER or CHANGE BOARD •AUTO GENERATED •APPROVER or FACILITATOR
  12. 12. Assisting Companies Leverage Investments in SAP Solutions Typical Change Management Processes  Example 3 – Much more complex, just a few steps of the overall process © 2010 LeverX Page 12
  13. 13. Assisting Companies Leverage Investments in SAP Solutions Difference Between ECM and PCM  In many companies, the change management process is split into to distinct processes  Engineering Change Management (ECM)  Production Change Management (PCM)  The ECM process is usually all of the activities from initiation of change up until the release of engineering data to various groups  Requesting the change  Doing an analysis of the change  Approving it  Making updates to drawings, BOMs, specifications, etc.  Completing a final review  Releasing data from the engineering group  Data is often “thrown over the wall” to ancillary groups (manufacturing, purchasing, etc.) to implement the change  Downside – not efficient due to other groups were not involved in the change during the engineering process (surprise!) © 2010 LeverX Page 13
  14. 14. Assisting Companies Leverage Investments in SAP Solutions Difference Between ECM and PCM  PCM occurs when the Manufacturing or other groups receives the change and begins implementing  Extending material master views to plants  Updating production BOMs  Disposition of goods  Preparing the manufacturing floor to be able implement change  Ordering goods  Contacting partners about the change  Etc.  You may be doing PCM for multiple plants or different groups © 2010 LeverX Page 14
  15. 15. Assisting Companies Leverage Investments in SAP Solutions Difference Between ECM and PCM  Our recommended best practice is to have one change management process that includes both the ECM and PCM process  This means having the groups implementing the change being involved in the change process early on – this avoids the “throw it over the wall” syndrome  A few rules when combining the ECM and PCM process  Down stream groups should be involved in the approval process or at least on the distribution list  Visibility of what is coming  Activities that down stream groups need to do are started as soon as possible  Do not just start at release of the change  Ex: How soon can production BOMs and other information be updated? Why wait?  Goal: One change record from start to finish that connects ECM and PCM activities  Easy to see where change started and where it ended © 2010 LeverX Page 15
  16. 16. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  There are three basic options for implementing change management within SAP  Change Masters  ECR/ECO Process  Notifications with Change Masters  What option you choose depends on the complexity of your process and what you are trying to achieve  Before we go into each option, it should be said that what each option is actually doing is controlling changes to SAP objects and recording the history  The key SAP objects which are controlled in the change process are  Bills of Materials  Documents  Materials  Variant Configuration Information  Task Lists  (note: Key objects are listed above… there are many others) © 2010 LeverX Page 16
  17. 17. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  When changing an object in SAP, you always have the option of adding a change number © 2010 LeverX Page 17
  18. 18. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  History of every change to the associated objects is recorded © 2010 LeverX Page 18
  19. 19. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  The simple change process  Very few participants in the change process  Linear process with not much collaboration  Not much workflow  Changes can be made immediately and released at a defined date in the future  Common steps  Change definition – usually comes from supervisors/managers  Change approval – usually verbal/ paper based.  Change execution – most advanced users have authorization to change objects without formal process  Change release – changes are released based on validity date  Solution  Use SAP Change Masters as the change record  Some use of SAP Workflow © 2010 LeverX Page 19
  20. 20. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  A view of the SAP Change Master © 2010 LeverX Page 20
  21. 21. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  A more controlled process – SAP ECR/ECO  The SAP ECR/ECO is very similar to the change master  Additional controls and system status network is added on top of the change master  From SAP help: If the decision is made that an engineering change is necessary, an Engineering Change Request (ECR) is created on the basis of the change notification and both objects are linked afterwards. Now the affected objects (for example, documents, BOMs) are assigned. This can be done using drag & drop if the integrated product structure browser is used. Now the internal change process for the selected objects is started. In the next optional step, the feasibility and necessity of the change can be checked by responsible agents for all objects affected. If all objects can be changed, the approval process can be started. Now all departments affected by the change can be involved. Viewing and Redlining can be used to view documents and to provide feedback electronically during the process. If everybody has approved the changes, the ECR can be converted into an Engineering Change Order (ECO) for the physical change of the affected objects. Therefore, the objects are sent to the responsible agents who make the changes. The changes do not become effective until the responsible agent in configuration management has released the ECO. With the release, changes are effective for the effectivity parameters, for example, valid-from-dates or serial numbers, which are used in the ECO. The release itself can happen either in one step as a general release or using a so called release key as a phased release, which allows the release for different areas, such as costing or production, step by step. If changes are released for running production orders, the Order Change Management (OCM) process is triggered. In this process, changes can be adopted to running production orders in a controlled process taking into account the current status of the production order. © 2010 LeverX Page 21
  22. 22. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  ECR/ECO process (general flow) © 2010 LeverX Page 22 Create ECR with all associated objects; attach accompanying docs Prepare all Red Line Markups With Pkg Prepare Request Forms Approve ECR? Reject ECR YesNo Process BOM And Rtg changes Close ECO Release ECO Get Signatures Identify Change Required Create/approve new Doc Versions Verify Object Changes
  23. 23. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  When the ECR/ECO process is used  The ECR/ECO process is used when a more controlled process for making change is required  Major difference – objects are add to the change and then approved  Change do not happen to the objects until change are approved  Validity date is not required up front – only when ready to implement vs. change master immediately requires a suggested validity date for the change  As with the change master, you can use SAP Workflow for routing of the change  Digital signature used to control change status changes  Disadvantage: System status network is not changeable and process must be followed as defined by SAP © 2010 LeverX Page 23
  24. 24. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  More complex, utilizing notifications and change master or ECR/ECO together  Most collaborative and controlled process  Process is designed to be extremely lean and system driven  Workflow is used to do most of the heavy lifting  Used by industries which are tightly regulated and change processes are often critical and lengthy (e.g. Pharmaceutical, aerospace etc)  Common Steps:  Change identification – can be anyone in the organization  Change definition – change is defined using SAP notification objects which serve as base for collaboration and documentation  Pre-change review – manual or using SAP reports (std./custom.)  Change approval – formal, digital using SAP workflow  Change execution – modular, driven by workflow  Change release – automated release and notifications using predefined business rules  Note, the SAP Change Master or ECR/ECO is still used but is tied to the Notification © 2010 LeverX Page 24
  25. 25. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  A view of the a change notification © 2010 LeverX Page 25
  26. 26. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  One of the major advantages to the notification is the use of tasks  Allow for adhoc capability  All changes do not %100 follow the same path © 2010 LeverX Page 26
  27. 27. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  More complex, utilizing notifications and change master or ECR/ECO together – (example flow) Page 27 Send entire package to Document Control dept Use workflow tasks to collaborate with SMEs Assign ECR constructor, create change notification and ECR. Copy all information from request notification to change notification Requestor creates request notification Identify Change Required Yes Sponsor reviews request notification No Doc Ctrl checks package Needs changes Start approval workflow Ok Send back to Doc Control Approver reviews package Not Ok Ok Doc Ctrl implements the changes Production change management workflow is trigered © 2010 LeverX, Inc.
  28. 28. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  Advantages and disadvantages of each approach Page 28 Simple Change Master process • Easy to setup • Less overhead • Fastest process • Best suited for design phase • Change history is not comprehensive • Change collaboration is informal and optional • Any errors are usually discovered after the implementation ECR/ECO process • Good change history documentation • More controlled process • Allows better collaboration • Allows greater flexibility in change process • Less errors • Best suited for production phase • Takes longer to setup • Change process tends to be longer ECR/ECO with notifications and digital signatures • Best change documentation • Extremely controlled and guided process • Best collaboration • Process can be as flexible as required • Minimum chances of error • Helps in meeting regulatory requirements more efficiently • Hardest and longest to setup • Maintenance overhead © 2010 LeverX, Inc.
  29. 29. Assisting Companies Leverage Investments in SAP Solutions Change Management in SAP  Our recommended approach is to have a balanced process depending on business requirements and industry  If process requires, our best practice is to utilizing notifications with a Change Master or ECR/ECO  This offers the most functionality and has been successfully implemented by LeverX and SAP at a number of customers  Variety of industries, including automotive and medical devices © 2010 LeverX Page 29
  30. 30. Assisting Companies Leverage Investments in SAP Solutions Utilizing SAP Workflow  What is SAP Workflow?  SAP Business Workflow can be used to define business processes that are not yet mapped in the R/3 System. These may be simple release or approval procedures, or more complex business processes such as creating a material master and the associated coordination of the departments involved. SAP Business Workflow is particularly suitable for situations in which work processes have to be run through repeatedly, or situations in which the business process requires the involvement of a large number of agents in a specific sequence.  Very powerful is used correctly  Issue – companies attempt to overcomplicate the workflows, adding to many bells and whistles, causing future support issues  The role of workflow is two-fold  Inform users of activities they need to perform as the change moves along its lifecycle  Send updates about the status changes and events to interested users  Escalation rules and task forwarding can be easily setup to enhance process  Adds slight maintenance overhead which must be taken into account during implementation © 2010 LeverX Page 30
  31. 31. Assisting Companies Leverage Investments in SAP Solutions Utilizing SAP Workflow  Can be used to drive the entire change process from change request creation to approval to change implementation to change notification  Ex: A requestor input a change that involves product XYZ – once saved, based on the changing product correct notification is sent to the manager in charge of identified product  Yes, the workflow supports the following  Workflow notifications sent to Outlook inbox  Deadlines for tasks  Ability to do “adhoc” workflows from different SAP objects  Maintaining substitutes when on vacation or out of the office  Escalation of tasks based on rules  As an implementation consideration, it suggested that staff be built up for long term support and update of workflows © 2010 LeverX Page 31
  32. 32. Assisting Companies Leverage Investments in SAP Solutions Example Implementations – High Tech  Via ECR/ECO process controlled updates to documents, material masters, and BOMs  ECR/ECO process worked for them because of the strict system status network  Utilized SAP Workflow based on status changes © 2010 LeverX Page 32
  33. 33. Assisting Companies Leverage Investments in SAP Solutions Example Implementations – Automotive Supplier  Due to complexity of process, used notifications with change masters to control updates to documents, BOMs, and material masters  Full recording of change from initial identification of problem to release of correction  Used workflow for routing and approvals  Able generate key business metrics based on status changes to see where improvements could be made © 2010 LeverX Page 33
  34. 34. Assisting Companies Leverage Investments in SAP Solutions Example Implementations – Medical Devices  Very similar to previous example, used notifications with ECR/ECO to control updates to documents, BOMs, and material masters  More elaborate use of digital signatures to control release of items due to FDA requirement  Approvers automatically determined via business route  Additional reports developed for checks and balances  Ex: If changing object A, you must change object B © 2010 LeverX Page 34
  35. 35. Assisting Companies Leverage Investments in SAP Solutions © 2010 LeverX, Inc. Page 35 Open Discussion

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