What is an Engineering Change Order (ECO)?

Time to market, quality, cost, revenue—these metrics all tie back to how well a manufacturer manages change. Innovation drives change. In fast paced industries, such as medical device and electronic and high-tech, a high number of changes occur daily. However, fierce global competition has made change a constant in every industry. A company’s success hinges on their ability to adjust to changes with speed and agility.

What is an Engineering Change Order?

Product designers use the engineering change order (ECO) or change order (CO) during the product development process to notify, seek approval, and implement their proposed changes. A key success metric is agility—how fast and how well is the change impact and time to industrialization assessed. 

Stakeholders up and down the value chain are affected by these changes and need to optimize their processes to implement them using the ECO or CO. A single change can impact many assets all at once, such as 3D CAD models and drawings, specifications, documentation, BOMs, and more. Furthering the complexity of managing this process, a change isn’t always identified by internal resources. Outside factors can play a role.

For example, there may be a change order for a part replacement because of supply chain disruptions, product quality issues, or new regulations. No matter the reason, changes affect every aspect of the product development lifecycle. All stakeholders within that lifecycle need to be kept abreast of the change and its status in order to be effective in their jobs (i.e. manufacturing, purchasing, warehouses, service departments, etc.)

Key Stages of the Engineering Change Process

1. Identify issue or need.

Someone identifies a problem or issue and determines whether it requires a change. The next step is estimating the scope of the change and its potential impact.

2. Investigate need.

The appropriate person creates an engineering change request (ECR). The ECR kicks off the process of: 

• Determining the necessity and feasibility of the change
• Identifying potentially impacted parts, components, and documentation 
• Estimating costs

Listing the resources required to implement the change

3. Create ECO.

Once the ECR is circulated for review and discussion amongst key stakeholders and is modified as needed and approved, an engineering change order (ECO) is generated. The ECO lists the items, assemblies, and documentation being changed. It also includes any updated drawings, CAD files, material disposition codes, standard operating procedures (SOPs) or manufacturing work instructions (MWIs) required to make a decision about whether to implement the change.

4. Review and approve ECO.

The ECO is routed to a change control board (CCB) comprising all stakeholders (including external partners when appropriate) who need to approve the change. Once the ECO has been approved, the affected individuals are notified that the engineering change should be implemented.

5. Implement change.

Using the information in the ECO, those responsible for implementation make the requested change. 

Principles of Engineering Change Order Management

Implementing an ECO or CO can be a complicated process. Manufacturers face a multitude of challenges: high-setup times (involving manual data collection of changes), non-transparent change statuses, long process execution times, time-consuming manual tracking of actions, parallel and conflicting changes (due to poor communication and lack of ubiquitous documentation), and reliance on disconnected legacy systems. 

The key is to implement streamlined processes and tools to minimize the downstream impact of changes. When implementing these, keep the following principles in mind.

• Optimize the use of the BOM in a way that enables a complete digital product definition. A digital product definition essentially configures, manages, and stores all product-related content – from final assembly structures to individual components – in a single, central repository.  The “digital thread” is the term used to describe how the product definition weaves its way through all these downstream data sets.  Consider a component that is being used across many assemblies. If this component changes, the change must be reflected in all assemblies that use it or people will be working with incorrect, out-of-date data. A digital thread makes it far easier to communicate this change. 
  
  
• Maintain two separate processes for work-in-process (WIP) and release management.  Access to a single source of product information early and often enables increased cross-functional interaction between engineers in the early phases.  With complete visibility and one global process, stakeholders can better complete tasks on time and provide valuable guidance on when changes can easily be incorporated without excessive cost.
  
  
• Make it easy to find and access the right information, both current and historical. It’s key to deliver the right information throughout the organization. An example is providing the latest release information to the shop floor. Or the product team giving the supply chain visibility into what is effective for the BOM a few months or quarters out to ensure all changes are proactively considered and managed during execution.
  
  
• Ensure complete change management and traceability.  Traceability across product development deliverables establishes a hierarchy of control. This makes it possible to propagate changes across the entire design so teams are not working in silos, and are sharing and maintaining design intent between sub-assemblies.  No matter where a change originates – whether within engineering, supply chain, or manufacturing – product changes ripple across cross-discipline deliverables.

PLM for Engineering Change Management

With product lifecycle management (PLM), you create data governance and associativity so that all changes and configurations are fully defined and controlled. This ensures that tasks are delivered to those responsible using a repeatable and automated workflow. Changes are made and issues are resolved accurately and efficiently. With PLM, you deliver a real-time view of the most accurate data to all enterprise stakeholders, expanding cross-discipline involvement. Standardizing on best practices for change and configuration management leads to more informed decision making, driving down the cost of poor quality. The time it takes to implement changes is accelerated and new products are introduced to market faster.