ECM Overview-best Practices

Assisting Companies Leverage Investments in SAP Solutions

Engineering Change Management Overview and Best Practices

Eric Stajda and Shobhit Singhal


Agenda

Definition of Change Management Process

Issues and Goals

Industry Standard Change Management Processes

Typical Change Management Processes

Engineering Change Management (ECM) vs. Production Change Management (PCM)

Change Management in SAP

Utilizing SAP Workflow

Example Implementations

© 2010 LeverX Page 2



There are different types of change management, including

Organizational Change Management

Change management is a systematic approach to dealing with change, both from the perspective of an organization and on the individual level. A somewhat ambiguous term, change management has at least three different aspects, including: adapting to change, controlling change, and effecting change. A proactive approach to dealing with change is at the core of all three aspects. For an organization, change management means defining and implementing procedures and/or technologies to deal with changes in the business environment and to profit from changing opportunities.

What we are focusing on in this presentation is product change management




To start with, a standard definition of change management

The Change Management process in Systems Engineering is the process of requesting, determining attainability, planning, implementing and evaluation of changes to a system. It has two main goals: supporting the processing of changes and enabling traceability of changes, which should be possible through proper execution of a defined process.

Businesses will refer to their change process under a variety of acronyms, including

ECR (Engineering Change Request)

ECM (Engineering Change Management)

ECN (Engineering Change Notice)

ECO (Engineering Change Order)

Etc.

Despite the different acronyms, all change management process have the same goal in mind

Controlling and implementing changes in a controlled fashion



Issues and Goals

While many businesses will have change management processes, they are always striving to improve

Current issues with change management processes include

Still working from paper forms

Current electronic system does not offer required capabilities

Current electronic system not integrated with other areas of organization (ex: Manufacturing)

Limited scope (ex: Only control change to drawings)

Not appropriately workflow enabled

Process is not lean

Cycle time is long

Extended supply chain not integrated with process

No ability to measure KPIs, business metrics, etc.

Visibility of change history limited



Issues and Goals

Implement a new change management process can be difficult, because it requires a good deal of business change management

Everyone is used to the same process and not easily changed

Therefore, business goals and benefits should be identified early in the project and well communicated

Common business goals and benefits include

Leaner process

Automate process with workflow doing the heavy lifting

Simplify the process

Reduce cycle time

Improve collaboration during change and implementation process

Eliminate errors

Reduce costs based on miscommunication (ex: Wrong revision built)

Better internal/external communication of change

Paper-free process




There are a number of groups offering standardized ways of doing change management, including

CM II – Institute of Configuration Management

Continuous improvement in ability to "change faster and document better." CMII evolved into a methodology for accommodating change and keeping (1) requirements clear, concise and valid, and (2) records and data accurate.

Wikipedia offers a glimpse of standard process

There are six main activities, which jointly form the change management process. They are: Identify potential change, Analyze change request, Evaluate change, Plan change, Implement change and Review and close change. These activities are executed by four different roles

Book: “Analysis on Engineering Change Management Based on Information Systems”

Engineering Changes (ECs) are inevitable and frequent in manufacturing enterprises. The primary challenge in efficient management of ECs arises because the sources as well as the effects of an EC are spread across different phases of the product lifecycle. With the application of information systems in enterprises, it becomes an urgent problem to run integrated engineering change management…




The previously mentioned standards are good if you are starting from scratch or just looking for ideas on how to improve you current change management process

Sometimes looking outside the box gives us the best ideas

The goal of implementing a change management process should not be to just to shoehorn you existing process into an electronic system

Look around and talk with other companies about their experiences




In the end, most companies have similar change management processes with minor deviations

Everyone has a way to request change and how to implement a change

There are varying degrees of success and complexity

Some industries are much more complex and regulated

Ex: Medical device companies must meet validation and FDA requirements when making changes

Ex: Auto suppliers use changes as a way of capturing additional profits against a given contract


Planning of Engineering

Change

Implementation of

Engineering Change

Release of Engineering

Change

ECR ECO ECN



Example 1 – Simple change management process

Simplicity is based on number of approvers, objects controlled, groups involved in implementation, etc.




Example 2 - More complex process flow for engineering and production change management


SUBMITEvaluate

(Facilitator)Review

(Change Board)Create ECR

(Initiator)

Define Components(Facilitator)

DesignWork

Review Release Implemented

Last Edited04-26-06REV, K

Change Board Signatures•Design Engineer•Manufacturing Engineer •Quality Engineer -PS&AE

SignaturesSeniorMfg. Eng

Engineering Central - ECR/ECO Lifecycle Guide

Select: •Product Line•Facilitator•Description •Reason for Change

•Project #•Attach Specs to be

Revised•Attach Parts to be

Revised•Promote ECR

Automatic e-Mail is

sent to the Facilitator

•Reviews proposed change•Reviews supporting documentation•Adds any additional supporting documentation if needed.•Create ECR approval route if needed.•Promote ECR to Review –only when any approval routes are completed.

Automatic e-mail sent to Change

Board

Create Spec & PartRoutes as needed.When notified thatroutes are complete:1) Check that Specs

are in the Reviewstate.

2) Promote Parts tothe Review state

3) Promote ECO toDesign Work state.

•Review all work•ApproveECO only

• Review eachobject

•BulkPromote all Specs and Parts to the Approvedstate.• Review & ApproveECO

• ECO isautomaticallypromoted to the

IMPLEMENTED state.• Distribution Groups are notified.

IF AUTO-CREATED:• Assign Mfg. Eng.• Set Priority• Set Release Distro-Group

IF NEW RELEASE ALSO:• Set ECO Description• Assign Design Eng• Connect Spec & Part• Connect Files and/or Drawing Markups, if

required• Assign Project #• Create ApprovalRoute on ECO.

• Promote ECO to DefineComponents

Create ECO•Automatic from ECR or

•Manual (if new)

SignaturesSeniorDesign Eng

System automatically creates New Preliminary Revisions of

AttachedSpec & Parts

•Create & Attach Markups

•Check in any supporting documentation•Promote to Evaluate

•Once the Change Board Approves –The ECR is automatically promoted to the Plan ECO state.

•Automatic creation of ECO•Automatic Attachment of all Preliminary Specs &Parts

•Automatic ownershipchange of all connectedobjects to the Responsible Design Engineer

•ECO is Automatically Related to the ECR

CompletePlan ECO

ECR Automatically Promotes to Complete, When All RelatedObjects (ECO, SPECS & PARTS) and Routes Meet Completion Requirements.

•Verify that All Related Objects (ECR, SPECS & PARTS) are Released and routes are Finished.•Promotes ECR to Complete state if appropriate.

Note:1.Drawing Markup Objects are promoted to Implemented (locked) when the ECO is promoted from the Create to Define Components State. No changes can be made to them.2. If Drawing Markups are added in the Define Components State, the lock will occur when promoted to Design Work.

•INITIATOR or FACILITATOR

•FACILITATOR

•APPROVER or CHANGE BOARD

•AUTO GENERATED

•APPROVER or FACILITATOR



Example 3 – Much more complex, just a few steps of the overall process



Difference Between ECM and PCM

In many companies, the change management process is split into to distinct processes

Engineering Change Management (ECM)

Production Change Management (PCM)

The ECM process is usually all of the activities from initiation of change up until the release of engineering data to various groups

Requesting the change

Doing an analysis of the change

Approving it

Making updates to drawings, BOMs, specifications, etc.

Completing a final review

Releasing data from the engineering group

Data is often “thrown over the wall” to ancillary groups (manufacturing, purchasing, etc.) to implement the change

Downside – not efficient due to other groups were not involved in the change during the engineering process (surprise!)




PCM occurs when the Manufacturing or other groups receives the change and begins implementing

Extending material master views to plants

Updating production BOMs

Disposition of goods

Preparing the manufacturing floor to be able implement change

Ordering goods

Contacting partners about the change

Etc.

You may be doing PCM for multiple plants or different groups




Our recommended best practice is to have one change management process that includes both the ECM and PCM process

This means having the groups implementing the change being involved in the change process early on – this avoids the “throw it over the wall” syndrome

A few rules when combining the ECM and PCM process

Down stream groups should be involved in the approval process or at least on the distribution list

Visibility of what is coming

Activities that down stream groups need to do are started as soon as possible

Do not just start at release of the change

Ex: How soon can production BOMs and other information be updated? Why wait?

Goal: One change record from start to finish that connects ECM and PCM activities

Easy to see where change started and where it ended




There are three basic options for implementing change management within SAP

Change Masters

ECR/ECO Process

Notifications with Change Masters

What option you choose depends on the complexity of your process and what you are trying to achieve

Before we go into each option, it should be said that what each option is actually doing is controlling changes to SAP objects and recording the history

The key SAP objects which are controlled in the change process are

Bills of Materials

Documents

Materials

Variant Configuration Information

Task Lists

(note: Key objects are listed above… there are many others)




When changing an object in SAP, you always have the option of adding a change number




History of every change to the associated objects is recorded




The simple change process

Very few participants in the change process

Linear process with not much collaboration

Not much workflow

Changes can be made immediately and released at a defined date in the future

Common steps

Change definition – usually comes from supervisors/managers

Change approval – usually verbal/ paper based.

Change execution – most advanced users have authorization to change objects without formal process

Change release – changes are released based on validity date

Solution

Use SAP Change Masters as the change record

Some use of SAP Workflow




A view of the SAP Change Master




A more controlled process – SAP ECR/ECO

The SAP ECR/ECO is very similar to the change master

Additional controls and system status network is added on top of the change master

From SAP help:

If the decision is made that an engineering change is necessary, an Engineering Change Request (ECR) is created on the basis of the change notification and both objects are linked afterwards. Now the affected objects (for example, documents, BOMs) are assigned. This can be done using drag & drop if the integrated product structure browser is used. Now the internal change process for the selected objects is started.

In the next optional step, the feasibility and necessity of the change can be checked by responsible agents for all objects affected. If all objects can be changed, the approval process can be started. Now all departments affected by the change can be involved. Viewing and Redlining can be used to view documents and to provide feedback electronically during the process. If everybody has approved the changes, the ECR can be converted into an Engineering Change Order (ECO) for the physical change of the affected objects. Therefore, the objects are sent to the responsible agents who make the changes. The changes do not become effective until the responsible agent in configuration management has released the ECO. With the release, changes are effective for the effectivity parameters, for example, valid-from-dates or serial numbers, which are used in the ECO. The release itself can happen either in one step as a general release or using a so called release key as a phased release, which allows the release for different areas, such as costing or production, step by step.

If changes are released for running production orders, the Order Change Management (OCM) process is triggered. In this process, changes can be adopted to running production orders in a controlled process taking into account the current status of the production order.




ECR/ECO process (general flow)


Create ECR with all associated

objects; attach accompanying

docs

Prepare allRed LineMarkupsWith Pkg

Prepare Request

Forms

Approve ECR?

RejectECR

YesNo

ProcessBOM

And Rtg changes

Close ECO

Release ECO

Get Signatures

Identify Change Required

Create/approvenew

Doc Versions

Verify Object

Changes



When the ECR/ECO process is used

The ECR/ECO process is used when a more controlled process for making change is required

Major difference – objects are add to the change and then approved

Change do not happen to the objects until change are approved

Validity date is not required up front – only when ready to implement vs. change master immediately requires a suggested validity date for the change

As with the change master, you can use SAP Workflow for routing of the change

Digital signature used to control change status changes

Disadvantage: System status network is not changeable and process must be followed as defined by SAP




More complex, utilizing notifications and change master or ECR/ECO together

Most collaborative and controlled process

Process is designed to be extremely lean and system driven

Workflow is used to do most of the heavy lifting

Used by industries which are tightly regulated and change processes are often critical and lengthy (e.g. Pharmaceutical, aerospace etc)

Common Steps:

Change identification – can be anyone in the organization Change definition – change is defined using SAP notification

objects which serve as base for collaboration and documentation

Pre-change review – manual or using SAP reports (std./custom.)

Change approval – formal, digital using SAP workflow Change execution – modular, driven by workflow Change release – automated release and notifications using

predefined business rules Note, the SAP Change Master or ECR/ECO is still used but is tied to the

Notification




A view of the a change notification




One of the major advantages to the notification is the use of tasks

Allow for adhoc capability

All changes do not %100 follow the same path




More complex, utilizing notifications and change master or ECR/ECO together – (example flow)

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Send entire package to

Document Control dept

Use workflow tasks to

collaborate with SMEs

Assign ECR constructor, create

change notification and ECR. Copy all

information from request notification to

change notification

Requestor creates request

notification

Identify Change Required

YesSponsor reviews

request notification

No

Doc Ctrl checks package

Needs changes

Start approval workflow

OkSend back to Doc

Control Approver reviews

package

Not Ok

Ok

Doc Ctrl implements the

changes

Production change management workflow is

trigered

© 2010 LeverX, Inc.



Advantages and disadvantages of each approach

Page 28

Simple Change Master process

• Easy to setup• Less overhead• Fastest process• Best suited for design

phase

• Change history is not comprehensive

• Change collaboration is informal and optional

• Any errors are usually discovered after the implementation

ECR/ECO process

• Good change history documentation

• More controlled process

• Allows better collaboration

• Allows greater flexibility in change process

• Less errors • Best suited for

production phase

• Takes longer to setup• Change process tends

to be longer

ECR/ECO with notifications and digital signatures

• Best change documentation

• Extremely controlled and guided process

• Best collaboration • Process can be as

flexible as required • Minimum chances of

error• Helps in meeting

regulatory requirements more efficiently

• Hardest and longest to setup

• Maintenance overhead

© 2010 LeverX, Inc.



Our recommended approach is to have a balanced process depending on business requirements and industry

If process requires, our best practice is to utilizing notifications with a Change Master or ECR/ECO

This offers the most functionality and has been successfully implemented by LeverX and SAP at a number of customers

Variety of industries, including automotive and medical devices




What is SAP Workflow?

SAP Business Workflow can be used to define business processes that are not yet mapped in the R/3 System. These may be simple release or approval procedures, or more complex business processes such as creating a material master and the associated coordination of the departments involved. SAP Business Workflow is particularly suitable for situations in which work processes have to be run through repeatedly, or situations in which the business process requires the involvement of a large number of agents in a specific sequence.

Very powerful is used correctly

Issue – companies attempt to overcomplicate the workflows, adding to many bells and whistles, causing future support issues

The role of workflow is two-fold

Inform users of activities they need to perform as the change moves along its lifecycle

Send updates about the status changes and events to interested users

Escalation rules and task forwarding can be easily setup to enhance process

Adds slight maintenance overhead which must be taken into account during implementation




Can be used to drive the entire change process from change request creation to approval to change implementation to change notification

Ex: A requestor input a change that involves product XYZ – once saved, based on the changing product correct notification is sent to the manager in charge of identified product

Yes, the workflow supports the following

Workflow notifications sent to Outlook inbox

Deadlines for tasks

Ability to do “adhoc” workflows from different SAP objects

Maintaining substitutes when on vacation or out of the office

Escalation of tasks based on rules

As an implementation consideration, it suggested that staff be built up for long term support and update of workflows



Example Implementations – High Tech

Via ECR/ECO process controlled updates to documents, material masters, and BOMs

ECR/ECO process worked for them because of the strict system status network

Utilized SAP Workflow based on status changes



Example Implementations – Automotive Supplier

Due to complexity of process, used notifications with change masters to control updates to documents, BOMs, and material masters

Full recording of change from initial identification of problem to release of correction

Used workflow for routing and approvals

Able generate key business metrics based on status changes to see where improvements could be made



Example Implementations – Medical Devices

Very similar to previous example, used notifications with ECR/ECO to control updates to documents, BOMs, and material masters

More elaborate use of digital signatures to control release of items due to FDA requirement

Approvers automatically determined via business route

Additional reports developed for checks and balances

Ex: If changing object A, you must change object B



© 2010 LeverX, Inc. Page 35

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