The Essential Guide to
Engineering and Manufacturing

Change Orders


Change orders in engineering and manufacturing are an integral part of the product development process. Change orders are documents that specify modifications to a product’s design or manufacturing procedure. They are required to ensure that the final product meets the required quality and performance standards and is produced efficiently and affordably. This guide will discuss the best practices for engineering and manufacturing change order management.

Unlocking Success:
The Importance of Effective Engineering Change Order Management

Engineering Change Orders: Why Is Effective Change Order Management Important?

Engineering change management (ECM) is essential for bringing new products to market or enhancing old ones. The procedures have changed over the past few decades from manual, paper-based systems to email-based sharing of change information to fully automated processes and workflows with software like product lifecycle management (PLM)—its basic intention is still the same—to allow everyone on the engineering and manufacturing side who is involved to develop, examine, and accept fresh or updated designs.

ECM offers a measure of control, usually revision-based, to make sure that everyone is working in accordance with the appropriate design and timing. This also involves abiding by a wide range of environmental, safety, ISO, FDA, ITAR, and EAR standards for companies that are subject to regulation.

What Is an Engineering Change Order?

An engineering change order (ECO) is a formal review process of proposed engineering changes to an established baseline that will impact form, fit, or function. An ECO, at minimum, will list all the affected components and will provide the reasoning behind the proposed changes. Redlined drawings, inventory disposition instructions, and part effectiveness are other types of information that may be contained within an ECO.

Engineering Change Request vs. Engineering Change Order

An engineering change request (ECR) is another common change management process that precedes an ECO. ECRs are used to document the initial request or suggestion(s) to address a design problem. An ECO and an ECR both provide a list of the components that will be impacted and the reasons for the requested changes. It’s possible to combine the ECO and ECR processes because the ECR may be considered redundant by some businesses.

Naming variations

An ECO is also sometimes referred to as an engineering change notice (ECN) or an engineering change (EC). Another type of change order is an engineering release notice (ERN). It’s used to implement changes to components or end products, typically found in government or medical manufacturing.

Better ECO results using a defined process

Effective change order management can ensure that change orders are processed quickly and efficiently, and that the final product meets all quality and performance requirements. The quickness and fairness of handling prospective change orders on a project are helpful to both the owner and the contract manufacturer (CM) partner.

Effective management of change orders is essential to the success of any product development project. Teams can process change orders efficiently and effectively by adhering to best practices such as:

• Establishing a change control board (CCB)
• Defining a clear change order process
• Documenting change orders
• Monitoring change order progress

Ineffective management of change orders can result in increased costs, delivery delays, and extended disputes between owner and contract manufacturer (CM), as well as a decline in product quality. A poorly documented ECO process can lead to major complications when it’s time for internal reviews, quality checks, or new employee training.

Preventing Product Disasters:
The Crucial Role of ECOs in Resolving Design Flaws

Product design flaws can lead to serious issues that create delays, production bottlenecks, and even product failures. These issues can impact your customer satisfaction levels and damage your company’s reputation. It’s critical to reduce and resolve any product issues as early as possible. ECOs are also important to ensure you quickly address any product design issues and keep your business moving forward.

Making changes in any area of a business without buy-in from stakeholders often leads to problems. This is particularly important for communicating changes to procurement and manufacturing teams. They need updated information about which parts to order or how to adjust their manufacturing workflows and account for existing resources. The more streamlined your process is, the faster you can increase quality and get your products to market.

Document Change Orders

Document change orders (DCOs) are crucial for effective change order management. Instead of major design modifications, smaller adjustments like changing the work order instructions or fixing a typo in a document will go into a DCO. A DCO is also used to update or change the documents for a product or component such as fabrication drawings, protocols and procedures, and written instructions.

Each document change order should be documented with a clear description of the:

• Changes made
• Reason for the change
• Impact of the change on the project timeline or budget
• Steps required to implement the change

Here is a sample of a typical Excel-based ECO template and Arena ECO management examples that include:

• Nomenclature of ECO details, description of the change, date, approvers
• Summary status—the reasoning for the change
• Item numbers/item names affected by the change
• Proposed changes and redlines 

Benefits of engineering change orders

You may need to review specific steps in the production process or revert to a previous design at some point. It’s essential to maintain a clear record of engineering changes so that you can easily go back to a product baseline or point in time. These steps are often required for compliance to get products approved for the market. ECOs provide access to the necessary revision history with details of who made each change and why.

With a PLM system, your ECO process is clear, allows for accountability, and keeps teams on track. Approvers receive automatic alerts to remind them that they need to review or approve a change. This significantly speeds up the approval process, which shortens the overall production timelines.

       Additional benefits include:

• Keeps product development on track
• Reduces costs
• Improves product quality
• Reduces time to market
• Reduces errors, delays, and bottlenecks
• Maintains clear records of any changes
• Ensures stakeholders have bought into the change

Sequence of a Typical Engineering Change Order Process:

NOTE: Steps of an ECO differ from company to company, but the overall layout is basically the same.

ECOs: Challenges and Tips

Here are a few of the most common challenges that can arise when creating an ECO.

Relying on a single author to document everything

If there are no standards in place, the individual responsible for a change order might not write up complete notes or could miss a step. Managing ECOs should eliminate common issues incurred when relying on a single author, such as:

• Typos or misinterpretations
• Accidental information omission resulting in incomplete sections of the ECO
• Shorthand that makes the author’s notes hard to interpret

Not understanding the full impact of a change

Having visibility and traceability into a change is an important part of the ECO process. When your data is disparate and not centralized, it can be difficult to take a step back and consider everything that will be changed and why. A small change in one component could affect other products that use it. This ripple effect might not always be readily apparent when the change is initially made but can lead to unknown production issues later.

Delays in approvals

The sheer number of people needed to approve forms and gain access to documents can also cause a delay. This is especially true if you need to access multiple chains of command who start at square one in understanding each request. If you don’t have a standard process, you might also risk accidentally leaving people off the approvals list.

Risk of changes not being approved

Thorough documentation practices are essential when creating and executing change orders (COs). However, they can be time-consuming and there’s a chance that key information gets missed. If key details are accidentally excluded, a change might get rejected and drag the process out even further. This is a major risk to businesses, as it leads to missed timelines and lost revenue.

ECO Tips

Keep change orders clean and manageable

Having a clear scope of what your CO covers and making sure the size and volume of the request are manageable helps speed up the change review process. When making a change, it might seem like a good idea to merge multiple functional updates or include other processes or product development changes in the same CO. However, this adds unnecessary complexity and can increase the odds of getting it rejected. If one part of a complicated CO has an error, the entire ECO will be impacted—instead, break down changes into granular modules to make sure they’re easy to understand.

Keep documentation consistent

Having repeatable processes and standardized documentation templates are key components to a successful ECO process. Consistency is also key for making sure everyone can understand the changes, as well as their involvement.

Monitor change order progress

Monitoring and communicating change order progress can help to ensure that change orders are implemented on time and within budget. Regular change control board (CCB) progress reviews should be conducted to ensure that changes are being implemented according to plan, and to identify any issues or risks that may impact the project timeline or budget.

Prioritize change orders

Prioritizing change orders can ensure that the most important modifications are implemented first. The change control board (CCB) should prioritize change orders according to their impact on the project’s schedule, budget, and quality.

Implement changes efficiently

Changes must be implemented efficiently for effective change order management. The team responsible for implementing the change must ensure that all necessary resources are available and that the change is implemented within the agreed-upon time frame and budget.

Review and close out change orders

Effective change order management requires that change orders be reviewed and closed. Once the change has been implemented, the team should conduct a review to ensure that it meets all quality and performance requirements. The change order should then be completed, and all associated documentation should be archived for future reference.

Streaming Manufacturing Change Orders:
Maximizing Efficiency and Quality

Manufacturing Change Order: Why Are Effective Manufacturing Change Orders Important?

Manufacturing is the process of creating products, such as clothing, automobiles, medical devices, and other pioneering innovations. Using computers, robots, and cloud-based technologies, manufacturing can be a complex process involving a variety of machines, tools, and equipment with several levels of automation.

A manufacturing change order (MCO) is typically initiated by the manufacturing team rather than the engineering team. It’s used for process or documentation changes, rather than for changing the design of a part, assembly, or product.

MCOs address issues such as production efficiency, quality concerns, or modifications to manufacturing equipment or processes. The MCO keeps track of all the changes made to a bill of materials (BOM). Every modification is listed along with the reason for the change. The revision must be changed to complete the ECO and update the BOM. A copy of the ECO may be generated for record keeping.

What Is a Manufacturing Change?

Manufacturing change request (MCR): A change request specifying proposed modifications to the manufacturing process or equipment.
Manufacturing change order (MCO): A change order describing modifications to the manufacturing process or equipment.

Manufacturing modifications should be documented so issues may be solved effectively. Most manufacturers start by submitting an MCR or MCO when they encounter manufacturing problems. For instance, a production team might submit process improvements using an MCO if the existing process is not efficient or straightforward. If there are changes required to both the design and the manufacturing process, an MCO will be submitted to the appropriate teams for review alongside an ECO. A good manufacturing change process keeps engineers informed about any problems on the manufacturing line. This information can be applied to their current or future design iterations.

Sequence of Steps Manufacturers Typically Follow From – Concept to Manufacturing:

Arena helps you accelerate your change order processes

Having the right product lifecycle management (PLM) solution can go a long way in helping you submit and complete engineering change orders that don’t slow your team down.

Arena PLM gives your businesses a better way to establish formal engineering change review processes with automated approval routings to allow internal teams and supply chain partners to collaborate effectively and shorten review cycles. With Arena, it’s easy to create, share, review, and release product design changes quickly.

You’ll be able to see for yourself the many ways in which Arena can improve your processes, help speed time to market, and increase your success as a product development company.