Decintell Falco Engineering Change Management (ECM) Module
Decintell Falco Knowledge Platform is a complete enterprise suite consisting an array of modules to cover enterprise wide transactions and workflows. The platform comes with its own Admin Centre. Admin can create roles, create users, assign roles and access rights. Configure alerts, emails etc. Admin can also monitor users' login sessions in real time and can force logout or suspend a user. Admin Centre is a very powerful tool to grant user level access to ensure information integrity. Apart from Admin Centre, Falco combines a set of standard modules and customised modules to handle complicated workflows within an Enterprise. (for more about Admin Centre click Decintell Falco Admin Centre)
The standard modules are My KRA BI Dashboards, DOIT (IoT module to monitor equipment performance), WAC (weighment calibration app). The customised workflows are SWAS (an aftermarket suite), CPC (Constraint based Capacity Planning and Control), ECM (Engineering Change Management), CEM (Customer Engagement Management), TPM (Total Preventive Maintenance), NPD (New Product Development) and many more. (for more on Decintell Falco Knowledge Platform click Digitise with Decintell Falco Knowledge Platform).
For the scope of this blog we will discuss ECM module in detail. "Engineering Change Management" is one of the most critical and least controlled processes.
Part Numbering System
Engineering Change is about mapping change in part drawing to correct bill of material. However, one needs to consider a broader definition of engineering change. Before we even talk about engineering change management, it is essential to begin from part number generation. Having a system to generate an accurate and unique part number for every single part is basic hygiene. Every organisation should have its own standards of designing part numbers and structure for building bill of material. There should be standard for number of digits for a part number. Each digit must mean exact same attribute. For each attribute there must be a controlled master, to ensure parameters for each attribute are strictly controlled.
Attributes can be defined as Material of construction (MOC), dimensions, process specs, tolerance specs, surface treatment, whether the part is assembly or sub-assembly or a child part, etc. There needs to be a digit in a part number to indicate current engineering level of the part. This digit typically starts at "0" indicating first level. And with every engineering change it is typically incremented in alphabetical series as "A", "B" and so on (some companies follow numeric series instead of alphabetical). Once the revised engineering level for a part is finalized, the part drawing needs to be suitably updated to reflect the change. Every BOM in which the part number appears, needs to be changed to reflect the changed part number.
Bill Of Material Architecture and Engineering Change
The BOM architecture policy has an impact on Engineering Change Management workflow. The architecture will decide how to designate assemblies, subassemblies and child parts. There has to be a digit within part number to indicate its place in the BOM tree. If part number engineering level digit is incremented, it will have an impact on sub-assembly part number and cascading all the way up to main assembly part number. As a typical policy if an engineering change is applicable retrospectively then BOM part number remains same, as the revised part is interchangeable with older revisions of the part. However, if the changed part is not interchangeable, it is a must to change the number of entire BOM tree, indicating new version of the BOM itself.
Since we are discussing BOM structure, I would like to mention that the architecture has major impact on production planning and reporting in ERP. While a layered structure allows better BOM management, it does create problem for production reporting and back-flush of material from WIP. A flat BOM is easier while reporting production and manage inventory accounting. However, this is a topic for a separate article.
Engineering Change impact on Part Drawing
Drawing standards is a vast subject. It is almost like a language. The stricter adherence to drawing standards ensures accurate communication to part manufacturing. However, for the topic at hand I will mention standards directly related to engineering change. Once an engineering change is confirmed and duly approved, drawing needs to be suitably amended and drawing revision needs to be incremented to reflect the change.
The next process flow falls under document management. This revised drawing then needs to be published, old drawing must be removed from the active system and all hard copies of old drawing must be destroyed. Revised drawing must be immediately accessible to all stake holders and if any hard copies are issued, an acknowledgement must be obtained from every recipient. Typically drawing users are, internal quality, production, field service, customers and part vendors (if the part is outsourced). A record must be maintained of every single copy. While the theory of document management is known to all, it is very difficult to follow in practice. Many a Non-Conformances (NCs) are scored during ISO audits for this workflow alone.
Managing Engineering Change
We will discuss basic of Engineering Change Workflow. It begins when an Engineering Change Request (ECR) is generated by quality, engineering, service, vendor or sometimes even customer. The request has to be duly processed by engineering function. The change needs to be technically validated.
If it is a critical part, then thorough testing needs to be carried out, including accelerated life cycle testing. Once the trials are approved, engineering needs to generate a formal note referred to as Engineering Change Note (ECN). ECN is then circulated to Quality, Supply Chain, Production, Finance functions for their approvals. (sometimes it is also mandatory to obtain customer approval especially for critical parts)
Quality function will vet the changed part and part drawings and will sign off on the release. Production function needs to vet the part drawing to ensure that they have proper methods, tools, training to produce and assemble the part. Supply Chain vetting is very critical. They need to ensure vendor readiness to produce the part, estimate lead time to procure the part, accurately calculate stock of old revision part in warehouse, pipeline and at vendors' place. Any special raw material required for old revision part which will be no more required. And finally come up with best possible date of implementation to ensure that vendors are ready and there is no obsolescence cost impact. Supply Chain also needs to assess the costing of revised part if procured from vendor. After necessary approvals and vetting from Supply Chain, the ECN finally lands up at Finance. Finance will calculate cost impact and sign-off the Engineering Change.
Once these steps are duly processed, engineering function needs start implementation. All the revised drawings must be issued by withdrawing old drawings, all BOMs must reflect the revision change and ensure that the effective date is strictly adhered to, otherwise phenomenal obsolescence costs will be incurred.
Engineering Change Cost Impact
Silent and incremental therefore deadly. The cost impact of Engineering change has two separate impacts. One the part cost in itself. Cost per part per piece may be relatively insignificant. However, if we calculate the total quantity of these parts used across all BOMs, only then the true impact is realized. Besides, if one were to consider collective impact of all engineering changes during a year, on BOM cost, it sums to significant BOM cost increase.
The second impact is Obsolescence cost. If while implementing an engineering change, the total pipeline including warehouse stock, is not calculated accurately, it raises substantial obsolescence risk. Obsolescence is a direct hit to bottom-line. Many organizations do not recognize this obsolescence on false hope that someday this material will be used. And more often than not, this day never comes. All it ends up doing is carrying this obsolete material in warehouse, occupying shelf space and incurring heavy inventory carrying cost, not to even mention the weakness it creates on balance sheet. Huge obsolescence as a singular reason, is responsible for many insolvency cases.
The date of implementation of Engineering Change is the deciding factor. If Engineering Change is implemented after considering lead time to first consume pipeline stock, then there is minimal risk. However, many times it is not possible to do so, due to some urgency or other, including implementation timeline driven by the customer. Under such circumstances, it is must to compute obsolescence impact and negotiate with customer to compensate suitably.
ERP and PLM and Engineering Change
How do ERP systems or PLM systems help in managing engineering change. Several ERPs have feature to handle BOM impact. They allow new version part to be introduced with a phase-in date and phase-out date for old version part. This allows ERP systems to automatically control the ordering of new parts on vendor. However, for this to work as designed, basic hygiene of ERP master data base must be maintained.
PLM systems allow control of drawing number, incrementing engineering change, release of drawing in the system and replacing the old drawing.
Decintell Falco ECM
There is a major gap that ERP and PLM systems typically do not address. Managing the workflow in itself (as explained in detail above). Workflow that tracks the ECR, ECN, vetting by various functions, calculation of obsolescence, assessment of BOM cost impact.
At Decintell, we have deep domain knowledge to comprehend complexities Engineering Change Management.
ECM workflow allows strict control over part number generation, managing the entire workflow and computing cost impact. But ECM is more than just about Engineering Change workflow. ECM also hosts a Knowledge Repository (KRè). Majority of product and process knowledge is generated and stored in engineering. KRè stores data for part specifications, process routing, value stream and operation sequence, equipment registry, allocation of equipment to value stream per process route, cycle time per part per process, by equipment type. KRè allows hundreds of man years of experience and knowledge within your organisation to be centrally stored, drawn upon and effectively used, rather than this knowledge becoming proprietary to individuals. This knowledge gathered thru person specific experience can be put to benefit of the entire organisation This data repository has controlled access and any change in data goes thru several steps of approval, before updating relevant masters.
ECM is a fully functional module of Decintell Falco. However, we appreciate that each organisation has its own specific needs and constraints. Leveraging our domain knowledge, we work closely with your team to map existing flow. Reengineer the same to remove non-value add activities. Optimise the flow to suite organisation specific requirements.
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