How Engineering Change Management works ? ECM Process | Words of Engineer

Engineering Change Management (ECM)

Have you ever gone for football match with basketball?  This could happen, if proper change communication of sport event is not done to all the team members. Similarly, in Automotive or any industry, changes in products in terms of design, manufacturing process or any other reason are needed to cope with varying customer requirements. And those changes need to be properly reviewed and approved by authorized personnel to avoid unwanted changes in products. Finally, those changes should be communicated to organisation’s respective personnel for the effective implementation in products. So, to facilitate the smooth & correct flow of change communication most of the organisation prefers Engineering Change Management (ECM).

It doesn’t matter, how small or big the change is, all changes done on product throughout the product life need to be requested*, analysed, approved, implemented & recorded in proper format. Changes in product could be anything like change in material, change in design, change in manufacturing process. For the changes which could affect fit, form and function of the product, a formal change notification needs to send and get approved by customer.

*requested means change requested from either internal or external customer, sometime working on product/design improvement this can be considered.

Engineering Change Management (ECM) Process –

Almost all organisations has similar ECM process which consists of change request, analyse, approval and implementation with variation in change request and approval methods. Below is the simplified flow diagram of ECM process -

1. Engineering Change Request

If any requester identify the change,after his primary analysis identified change is converted to change request. This engineering change request then forwarded to authorized product owners,who are responsible for product changes.

Anyone from organisation can raise a change request for any part or product however authorized approval personnel remains same.


2. Engineering Change Order 

After engineering change request is approved by authorized personnel. It is forwarded to engineering department for change analysis, feasibility check.  To
study in detail, whether this change is possible or not.

If change is possible,then engineering team create, update drawings accordingly.

3. Change Implementation

Once drawing are updated, manufacturing engineer create or modify process documents accordingly. Also ensures change is being implemented in product from decided production dates .

4. Engineering Change Release Note

After all ECO changes are implemented,production cut-off numbers are communicated to all required stakeholders of the organisation by manufacturing engineer via engineering change release note.

Product Design Development In 5 Stage Gates | Words of Engineer

Product Design Development In 5 Stage Gates

In Product Lifecycle (PLC), we understood about the different life phases of product which are namely Pre-Introduction, Introduction, Growth, Maturity, Decline and Extended Growth. Success of any product lies in its successful design and development. As you may aware, design development of any product involves plenty of engineers from almost all departments of organization to work on it. This make design development huge and complex process. Question may arise here that, do we have solution for this? Answer is ‘Yes, we have solution, by systematic division, monitoring and tracking of work any major task can be accomplished. Considering this, many organisations have adapted ‘Stage Gate Process’. 

Stage gate is the project management technique in which project/program is divided in different stages with management decision review/approval points called as gates. Over the years, there are many concepts of stage gate process are developed by the experts, but traditional process is ‘5 Stage gate process’. 

In this 5 Stage gate process, total project (from Customer RFQ to Production release) is divided into 5 stages with 5 approval gates, those are mentioned below –

Stage-0                 Discovery

Stage-1                 Scoping

Stage-2                 Build Business Case

Stage-3                 Development

Stage-4                 Testing & Validation

Stage-5                 Launch

 Stage Gate Process

 (Image Source - https://creately.com/diagram/example/jlgeb7gf1/Stage-Gate+Process?utm_source=pinterest&utm_medium=social&utm_campaign=pinblock )

      Further this individual stages has many tasks under it which needs to be completed by different departments on schedule timelines. Above mentioned is the traditional 5 stage gate process, however every organisation has their own terminologies for each stage gate.So, that's about 5 Stage Gates process.

Business Screening Document | Words of Engineer

Business Screening Document -

Every company has their defined organisation management structure and this management team is responsible for creating a strong relationships with employees, shareholders and the customer.
Introduce and embrace fundamental and new company values among them.
Predicting the future market, guiding the company for its products to sustain in the market .Also increase company market growth in terms profit and reputation and so on responsibilities.

What is Business Screening Document (BSD) ?

When any company receives Request for quotation for the business opportunity from any other company or person.Before sending quotation to customer, receival company's Business development team has to present the opportunity in front of the company management team.So that management team can share their views on the opportunity and provide decision to proceed for this business or not.

What information this document has ?

To keep uniformity in Business Screening , company create a standard document which will be used for all the Business Screenings.

This document consists of below points -

1. Customer

2. Relation with customer

Management needs previous relation history of customer with the company in terms of engineering, quality,sales, purchasing, payment.

3. Customer Product details

In this section, overall information of final customer product is given like market need of product, features of the product, competitors having similar products,expected sales volume.

4. Sales region

 Not every product is suitable for all the region's of world.For example- Supercar can not be used in off highway roads. So,sales region and customers and company's presence in that region is an important factor.

5. Customer's Program timeline

Sometimes customer wants to launch product in market too quickly.It is important to know timelines,so that company's engineering and plant capabilities can be adjusted accordingly.

6. Annual Sales volume

Annual sales volume are need to plant capabilities and manpower management also for calculating expected overall company sales volume for the year.

7. Purchasing Terms

Purchasing terms explains,what type of purchase customer wants, one time purchase agreement or the agreement with timely scheduled.

8.Packing and shipment terms

What of packing and ways of shipment is expected from customer is explained in this section.

9.Payment terms

Payment Terms are mutually agreed by both the companies and varies from customers to customers. Sometime payment made on credit base or debit base depending upon the customer relations with company, discuss done on agreement signing.

10.Expected revenue generation

Considering the expected annual sales, expected revenue of before and after tax is calculated for the financial year.

11. Risk involved,if project taken

For any business opportunities,there are some Risk involved in it.In this section,Risk involved in the project is explained.This is  depends upon many factors like product, customer, market need and so on.

12. Risk involved,if project not taken

As Risk involved if project taken, there are also Risk involved if project not taken. For example - Competitors may get a business with customer and possibility of overtaking share of existing businesses.

13.Future Opportunities

Opportunity opens the doors to new opportunities !  Probable new business opportunities with this business are explained in this section.

So, above all information is mentioned in business screening is tool for management to decide why the opportunity or business is needed for company. After business Screening is done,if management provides approval then quotation can be sent to customer.

How Procurement works in Automotive Industry ? | Procurement Cycle | Words of Engineer

How Procurement works in Automotive Industry ?

Every organization requires material and services to fulfill their business needs.In Automotive industry, terms like Purchasing and Procurement are used interchangeably. However, they are  different from each another.Let's first understand the difference between Purchasing and Procurement.

What is Purchasing ?

    It can be defined as 'Process of buying materials and services from the suppliers or vendors'. Purchasing is part of procurement which includes the activities like Ordering,follow up, expedition, receiving of goods, verification of invoices and payment to suppliers.

Objectives of Purchasing -

Purchasing is responsible for maintaining smooth flow of material without interrupting the production.
If production is interrupted it can create a delay in delivery schedules which could affect customer satisfaction and can result in business losses.So, objectives of purchasing can be defined as ' obtaining materials or services of right quantity, right quality at right time,right place and at most economical prices'.

What is Procurement ?

Procurement is wider term which includes the activities prior to the purchasing such as Identification of need,supplier selection, creating purchasing orders /agreements, negotiations and maintaining supplier relationship,ect.

Procurement Cycle -

Procurement Cycle consist of steps shown in below snap -

1. Determination of Material Required.
  
    Procurement activity starts with material or service requirements initiated by manufacturing department. This requirement consist of what material or services needed, how much quantity needed, when it is needed. Then procurement team analyze the requirement and finds the potential suppliers who can fulfill the requirement.

2. Request for Quotations (RFQ)

   After list of potential suppliers are selected from organization's approved vendor list, team sends a request stating the requirements and asks for the supplier's price,terms and conditions to provide material or service. So, RFQ is not an order ,it is just an enquiry.

3. Vendor Selection 

    As soon as RFQ received from suppliers, procurement team analyze the different Vendors price,terms and conditions. Finally selects the best suitable vendor for the organization to fulfill requirement.

4. Creation of Purchase Order (PO)

   Purchasing order is a legal document acts as contract between the organization and vendor. It consists of information about the material or services like price, what to supply ,how much ,when to supply, mutually agreed terms and conditions.

5. Receiving and Accepting goods

   After receiving the goods to organization premises, responsiblility of accepting and posting good receipt in organization's ERP system.

6. Verification of Invoices

   Vendor sends an invoices for the goods supplied to organization. Team in responsible to verify those invoices with goods receipt quantity and price mentioned in PO.
 
7. Payment to Vendors

   If verification is done & invoice information are correct then team sends a request to finance team to release payments.

So, this is about how purchasing and procurement works in Automotive industry.