What is an Engineering Change Order (ECO)?
This article defines engineering change orders (ECOs) and describes the role they play in new product development (NPD) and manufacturing.
Engineering change order (ECO) definition
An engineering change order (ECO) is a document that specifies either new product design details or proposed changes to existing products. ECOs provide a list of all the components, assemblies, and other documents that are affected. The engineering change order is sent to all key stakeholders (change control board or “CCB”) including engineering, quality, procurement, manufacturing, and external design teams or supply chain partners in many cases. Every CCB member is responsible to determine the impact of the change order and whether the ECO can. be implemented as planned and on time. CCB members will approve or reject the change and when all CCB members have approved the ECO, then it can be acted upon.
The role of ECOs in engineering change management
The change process starts when someone identifies an issue that may need to be addressed with a change to the product. It ends when the agreed-upon change is implemented. ECOs are used in between to summarize the modifications, finalize the details, and obtain all necessary approvals.
Key Stages of the engineering change process:
Issue identification & scoping:
Someone identifies a problem or issue and determines that it may require a change. The scope of the issue and its possible impact are estimated.
An engineering change request (ECR) is created to examine the necessity and feasibility of the change, to identify parts, components, and documentation that might be affected, to estimate costs, and to list the resources required to implement the change.
The ECR is circulated for review and discussion among key stakeholders and is modified as needed.
Once the ECR is approved, an engineering change order (ECO) is generated, which lists the items, assemblies, and documentation being changed and includes any updated drawings, CAD files, material disposition codes, standard operating procedures (SOPs) or manufacturing work instructions (MWIs) required to make a decision about the change.
The ECO is then routed to a change control board (CCB) made up of 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.
Those responsible for implementation use the information in the ECO to make the requested change. While an engineering change order is used for many changes, some companies will use other types of changes as well. These include manufacturing change orders (MCOs) and document change orders (DCOs).
While you may groan at the prospect of pulling together another set of documentation, an ECO is a critical part of keeping product development on track and making sure product information is accurate. A good ECO contains the full description, analysis, cost, and impact of a change, and a good ECO process ensures that all stakeholders have bought into the change. Having an organized method of handling product changes reduces potential design, manufacturing, and inventory errors, minimizes development delays and makes it easy to get input from different departments, key suppliers, and contract manufacturers.
Following good ECO practices also makes it easy to document a full history of what changes have been made to a product and when they occurred. In industries with regulatory requirements, like the medical device industry, having a full history of every change to a product is mandatory. (Depending on the industry, change orders and even the change process itself may be audited by a regulatory body.) Keeping a record of product changes will also help you debug any problems that occur after your product launches. The task of identifying and fixing the root cause of any problem is easier when you have a complete product change history.
Without a clear ECO process in place, making a change to a product can set off a chain of costly, time-consuming, and avoidable events. Take a part switch that happens late in the development process. Engineering may tell manufacturing to be aware of the new part, but if that information is never conveyed to the purchasing department, the old part will be ordered. When the components arrive, manufacturing will not be able to assemble the product, and its launch will be delayed until the new part is obtained (most likely with some rush charges incurred along the way).
Engineering change orders make it possible to accurately identify, address, and implement product changes while keeping all key stakeholders in the loop and maintaining a historical record of your product. Without them, miscommunications occur that lead to delays, incorrect purchase orders, and improper product builds.
Engineering Change Orders: Paper-based vs. electronic software systems
With Paper/Manila Folders
With Electronic Systems
Companies need to be able to adapt quickly in today’s constantly changing environment, and often that means making changes to their products. Engineers make modifications during development and production with the intent of adding functionality, improving manufacturing performance or addressing the availability of a particular part.
To make sure proposed changes are appropriately reviewed, a solid process is critical—especially if members of your product team are scattered across multiple locations (for instance, design engineers in Boston, the manufacturing team in Texas, and component manufacturers all over the world). At the heart of a solid engineering change management process is the engineering change order. Read about five fixes that can help improve engineering change management.
Learn how Arena PLM can help you control your engineering change process, accelerate your engineering change order review and approval processes, and eliminate ambiguity when communicating product changes to your extended supply chain. Also check out our free ECO template.