Change Management

What is the future role of engineering change management?

The way a business deals with change is crucial to its success in product creation. Businesses must react to customer-side trends as well as market and industry developments, and this increases complexity especially for multi-discipline processes like change management. How will you respond? Before we get into the details: Your goal should be a digitally orchestrated change management concept that promotes flexibility in the context of defined processes.

Business Potential

Change management: Business potentials for product creation

Engineering change management (ECM) links the “how” to the “why”. It’s a process that connects all the decision-making strands involved in modifying a product or the process of creating it. This includes, for instance, the way your business evaluates a certain change, but also how you reconcile that change with your product lifecycle management targets.

In this way, successful change management yields better products and lower costs, as well as competitive benefits gained from stronger customer focus and greater adaptability.

If you take the right steps in the right sequence and coordinate them the right way, change requests no longer threaten your time-to-market targets.

Another reason for boosting the performance of your change management is that this process will become ever more important to how you collaborate with others. Your development alliances with suppliers and partners need a formalized organization that can successfully address this scenario.

Reference

Endress+Hauser Process platform to manage a global change process Read more about

What makes change management so important?

Change is a pervasive aspect of the way manufacturing businesses operate. Scenarios for a change request include

Client project: The client business changes an order by altering requirements.
Innovation management: An existing product is produced using newly introduced technology.
Continuous improvement process (CIP): A business unit, e.g. quality, design, sales or service, has identified a weakness that needs to be rectified.
Business decision-making: Management reacts to changing market conditions or new statutory regulations and wants to modify the features and functions of an existing product.

A change can affect a variety of components involved in product creation, e.g. the product itself, the manufacturing process, the packaging, etc. Moreover, it may involve any phase of the product lifecycle, in product development as well as in series manufacturing.

What makes change management business-critical?

It is a multi-disciplinary process with a wide variety of steering tasks
The frequency of changes and the effort involved in bringing them about hold time- and cost-saving potentials
It ensures maximum responsiveness to market developments

In practice, this means that changes account for a considerable portion of the effort it takes to create a product. According to a McKinsey study, one-third to one-half of available technical capacity must typically be allocated to change processes.

Optimal control of this process is therefore a key success factor for business, and that requires a systematic, scalable and traceable approach. It also includes mechanisms for permitting controlled deviations from the strategic control standard, e.g. to account for a specific situation on the ground. This ensures flexibility – and in today’s business environment, flexibility is perhaps more important than ever before.

What change management does for product creation

Shorter time-to-market cycles and assured quality

Optimum quality and time efficiency despite increasing product variety and complexity.

Performance auditing of changes

Cost-benefit analyses of change requirements ensure ROI and minimize time and cost investments.

Agility in the face of changing market conditions

Changes can be implemented efficiently during any PLM phase.

Individualised advice

Value Creation

The value-adding role of change management

How does change management work?

In the event of changes in any product specification (requirements, system concepts, 3D models, drawings, software), the previously released version must be replaced with the new one at a specific point in time.

The definition of the new specifications is coordinated by a Change Manager who issues the respective requests to the technical units. Questions that need to be addressed at this point include a dependency and impact analysis. This is particularly relevant for “smart” products and products with many associated variants and configurations.

Additional validation scenarios exist for further strategic fine-tuning of the change procedure. For example, early reconciliation of costs and benefits ensures that the change does in fact add value.

A mid-size business will not necessarily have established a dedicated Change Manager position, but successful engineering change management requires that a person with overarching responsibility be assigned in all cases: The technical units usually focus on their specific needs and their own time management, meaning they view change as a disruption that reduces efficiency. A Change Manager also ensures that, upon completion of the change, the new specifications are exclusively valid throughout the organization.

Characteristics of successful change management

Changes are systematic, efficient and traceable
Mechanisms for controlled deviation ensure flexibility
The role of the Change Manager ensures continual monitoring

The question as to what relevance threshold triggers the change process depends on the business model and must be answered by each business individually. A company may also decide to adopt rules for simplified change management procedures until a certain level of relevance is reached.

A rather more challenging goal is achieving a level of flexibility that ensures procedurally secure, auditable management of changes but also permits exceptions for reasons of business policy. An example: A company’s European plants already produce the latest version of a product, while an independent subsidiary in Asia has not yet implemented the change.

In other words: You can orchestrate the change in its entirety, but you retain the ability to manage entities as speedboats. However, in such scenarios the exceptions must be documented, and later (software-supported) adaptation to the standard must remain possible.

Stages of the change management process

Engineering change management consists of the following steps: Change request, change order and change implementation. The upstream process of issue/problem management may also be considered a part of change management.

Engineering change request (ECR) is received

An engineering change request (ECR) is received. This describes the desired changes. The Change Manager verifies that the request contains all required information and plans all measures needed to evaluate it.

Decision on the change request

The next step is a decision on the change request. Decision-making responsibility depends on the stage of product creation and the category of the change request (according to time/cost/impact of the change):
Decisions on changes with low time/cost investment and minor impact may be made directly by the Change Manager.
Changes with high time/cost investment and/or high impact are submitted to the Change Board, a body composed of members of all involved units.

Change order

An approved change request becomes a change order. The respective tasks are allocated by unit/topic and individual work orders are assigned.

Change Manager monitors implementation

The Change Manager monitors implementation and subsequently evaluates process execution with a view to continual improvement (target vs. actual time/cost, response times, plan deviations, …).

Change request is closed

The units execute the planned changes and the task handlers release the step (the relevant artefacts). When, and only when, all work orders have been completed and all changes have been fully validated, the change request is closed and all artefacts/specifications are released to production.

For value-adding purposes, the role of change management can be described as follows: The process goal of engineering change management is the systematic, controlled and efficient realization of changes, improvements and/or updates within technical systems, products or services.

Further pages on the topic

Blog Leveraging data and transparency to reduce cost risks in engineering change… Engineering Change Management: Three strategies for cutting cost risks Read more about

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Transformation

End-to-end control of change: Transformation tasks

How can you improve your change management?

Change management benefits from going back to the end-to-end principle, because of course it is a process that may transit various business units and involve many people. Such a “reset” also exposes workarounds that are insufficiently documented, often cause problems during audits and simply aren’t suited to a flexible, state-of-the-art change management concept.

Workaround solutions are frequently a product of unclear responsibilities, but they may also be caused by a lack of staff resources. To be sure, not every business needs a Change Manager, but change management tasks can’t be handled on the fly. At very least, therefore, one should allocate sufficient time budgets to the staff designated for these duties.

Transformation requires a definition of universal standards, and that in turn requires finding the right balance. Management should strive to achieve a good equilibrium between regulations and practicability. The process itself must combine a framework of auditable rules with the flexibility needed in day-to-day business operation – one size won’t fit all.

Establishing the digital framework

View the change management process as an end-to-end process
Provide human resources
Implement bidirectional integration of the PLM and ERP systems

Individualised advice

IT requirements for change management

A change process usually affects a variety of applications and systems, meaning that all stakeholders must be involved in all communication and have access to seamless data transfer. One transformation task of IT is therefore self-evident: It must enable a software-based, bidirectional exchange of information between your PLM and ERP systems. This provides the foundation for transparent tracking of changes and prevents transmission of outdated specifications.

Your IT must also ensure that all product specifications and their interdependencies are digitally available from a single source. Furthermore, it’s helpful if the software supplies your Change Manager with information on which units and experts must be involved – even without specific technical design or engineering skills, he or she should be able to gain an overview of the tasks generated by a change request.

Solutions

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Press Release

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Next step

The future role of change management in product creation

A company must be able to implement changes reliably and consistently, no matter how its business model develops over time. That fact makes change management a success factor which deserves allocation of staff resources and deployment of cutting-edge software to ensure that the entire process yields the desired benefits.

Correctly and seamlessly integrated software can support change management decisively: End-to-end availability of information optimizes communication and decision-making and contributes to rapid implementation of approved changes. Your business benefits from reduced error rates and improved efficiency, letting you produce better products more quickly at lower cost.

Adaptability is a business virtue – and in times of economic and social polycrisis, it’s in higher demand than ever. Leverage agile change management to insure your business against fluctuating market conditions – we are here to help you do just that.

Achieve competitive benefits

Implement your change requirements rapidly and efficiently at any stage of the product creation process and stay ahead of the competition.

Get your business ready for the future

Make your changes secure and audit-proof while enabling process exceptions for reasons of business policy.