engineering change management webinar april 2013

Engineering Change

Management:

The Process

John M. Cachat

jmc@peproso.com

© Copyright John Cachat

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

Housekeeping

Phones are muted

Use the question

block for questions Copy of presentation

available upon request

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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

4 © Copyright John Cachat

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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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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Engineering ChangeOrganizational Pressures

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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

Engineering Change Management

A Four Step Process

1.

ECR

Change Request

2.

ECN

Change Notice

3.

ECO

Change Order

4.

ECV

Change Verification

9 © Copyright John Cachat

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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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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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

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.

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Who Needs to Vote?(Create Some Rules)

• Major

– Affects the service organization, inventory or

outside organization

– Financial impact of under $XXXX

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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

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

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?

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Change Notice

• What is impacted?

– Already shipped

– In the warehouse

– In production

– At the supplier

• What needs to be updated?

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Change NoticeWhat Needs to be Updated?

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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

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

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

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

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

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

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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

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Engineering Change Process

What it actually is

What you think it is

What it should be

© Copyright John Cachat

Big Company ChallengeWhere does Engineering Change Belong?

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Tie everything together

with business workflow

© Copyright John Cachat

How Do I want Engineering Change to Work?

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Your Form, Not Their Screen

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• 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

Engineering Change Process

3

Software

2

Process

1

People

30 © Copyright John Cachat

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

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

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Increase Profit on New Products

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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

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

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

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

About Us

John Cachat

jmc@peproso.com

Contact

Proven expertise in training

and document management

systems

Rapid Solution

Development™ process

ServicesAssess Current Status

Develop Short and Long

Term Plans

Develop Specific Solutions

to Your Problems

Assist in ROI Analysis

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FREE Proof of Concept

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WeWe

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John Cachat

jmc@peproso.com

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Engineering Change Management: The Process

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