There are multiple factors that may need to be considered when managing engineering change. Having someone who has managed such changes in front of you will help you to validate your thoughts and open your mind to potential risks.
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Managing Engineering Change in Procurement
Engineering changes refer to the modifications made to the design, specifications, materials or manufacturing processes of a product post-initial production. These changes can stem from various factors, including improvements in technology, compliance with new regulations, cost reduction initiatives, or feedback from customers and suppliers. Effective management of these changes is vital to ensure product quality, meet market demands, and maintain supply chain efficiency. Here’s an insightful guide on managing engineering changes in procurement.
Understanding the Importance of Engineering Changes
Engineering changes, while challenging, offer opportunities for innovation and improvement. They can lead to enhanced product performance, better cost efficiency, and stronger compliance with environmental and safety standards. However, if not managed properly, these changes can disrupt the supply chain, lead to increased costs, and delay product delivery. Therefore, understanding and strategically managing these changes is crucial for procurement professionals.
Steps for Managing Engineering Change
- Initiation and Documentation: All changes should start with a formal request, detailing the nature, reason, and expected outcomes of the change. This step involves documenting the current product specifications and the proposed modifications.
- Evaluation: Assess the impact of the proposed change on all aspects of the product and supply chain. This includes cost implications, lead times, inventory levels, and supplier capabilities. It’s important to consider the effects on product quality, compliance, and customer satisfaction.
- Approval: Changes should be reviewed and approved by relevant stakeholders, including engineering, procurement, quality assurance, and, when applicable, the supplier. This collaborative approach ensures all potential impacts are considered before moving forward.
- Implementation Planning: Develop a detailed plan for implementing the change. This should include timelines, responsibilities, resource requirements, and a communication strategy to keep all stakeholders informed.
- Supplier Engagement: Communicate the change to affected suppliers early in the process. Collaborate with them to assess the feasibility of the change, negotiate costs, and agree on revised delivery schedules.
- Testing and Validation: Before full-scale implementation, conduct testing to validate that the change meets the intended objectives without adversely affecting product performance or quality.
- Change Implementation: Roll out the change according to the implementation plan, monitoring closely for any unforeseen issues that may arise.
- Documentation and Review: Document the entire process and outcomes of the engineering change. Conduct a post-implementation review to evaluate the effectiveness of the change management process and identify areas for improvement.
Best Practices for Effective Engineering Change Management
- Maintain Clear Communication: Open and frequent communication with all stakeholders, including suppliers, is essential to manage expectations and address concerns promptly.
- Leverage Technology: Utilize change management software and other technological tools to track changes, maintain documentation, and ensure visibility across the supply chain.
- Build Flexible Supply Chains: Develop relationships with suppliers that can adapt to changes quickly and efficiently. Having alternative sources can also mitigate risks associated with engineering changes.
- Focus on Continuous Improvement: View engineering changes as opportunities for continuous improvement. Encourage a culture that welcomes innovation and adaptability.
Managing engineering changes is a complex but essential component of procurement. By following structured processes and best practices, procurement professionals can navigate these changes successfully, ensuring that they contribute positively to product development, supply chain efficiency, and overall business objectives. Embracing change management as a strategic element of procurement will position organizations to respond more effectively to the evolving market and technological landscape.
Initiating an Engineering Change from Suppliers
As a professional buyer, it’s essential to facilitate a clear and structured process for suppliers to propose engineering changes to our products.
Driver of Change
Engineering changes may be driven by various factors including:
- Cost Reduction: Improving cost-efficiency by modifying materials or manufacturing processes.
- Quality Improvement: Enhancing product performance or reliability.
- Regulatory Compliance: Meeting new legal or industry standards.
- Technological Advancements: Leveraging new technologies or innovations.
- Supply Chain Optimization: Addressing supply chain disruptions or optimizing logistics.
Process for Proposing Changes
Formal Proposal Submission:
Suppliers should submit a detailed proposal outlining the change, including technical specifications, reasons for the change, expected benefits, and potential impacts on cost and timeline.
Initial Evaluation:
The procurement team, along with engineering and quality assurance departments, evaluates the proposal’s feasibility and alignment with our strategic objectives.
Cross-functional Review:
Conduct a cross-functional team review involving procurement, engineering, quality, and relevant stakeholders to assess the technical, financial, and operational impacts of the proposed change.
After this stage the standard process for engineering change should apply.
Buyer’s Role
Championing the Change:
Advocate for the proposed change within the organization by highlighting its benefits and aligning it with strategic goals.
Coordinating Reviews:
Organize and lead cross-functional review meetings to evaluate the proposal comprehensively.
Managing Risk:
Identify potential risks and develop mitigation strategies to address any disruptions during the change implementation.
Ensuring Compliance:
Verify that the proposed change complies with all relevant standards and regulations.
Tracking Progress:
Monitor the implementation process and track key performance indicators to ensure the change delivers the expected benefits.
By effectively managing supplier-initiated engineering changes, buyers can leverage supplier innovations to enhance product quality, reduce costs, and improve overall supply chain efficiency.
Want to learn more about Managing Engineering change?
You may be a seasoned Procurement professional, or a developing Buyer faced with the new challenge of managing the transition of a product from one revision status to another. You may feel overwhelmed by the enormity of the situation particularly, if you have multiple stocks and supply chains delivering to multiple locations around the globe. You need to be aware of the substantial costs and risks involved during the transition and the impact this may have on both the end customer, as well as a range of colleagues from different disciplines in the business.
There are multiple factors that may need to be considered when implementing an engineering change. Having someone who has managed such changes in front of you will help you to validate your thoughts and open your mind to potential risks and possibilities.
Being aware of alternative ideas, situations and real-life occurrences will help you to shortcut the guesswork and cut through to solutions that may make substantial reductions in lead time and cost, making it clear to your superiors that you are organised, well prepared, knowledgeable and trusted in being able to handle complicated supply chain problems in the future.
By working through a well thought out process you will be able to effectively breakdown the problem, organise yourself in a structured way, engage with both internal and external stakeholders effectively, reduce costs and lead times, lessen the disruption to your customers and elevate your standing and recognised worth with your colleagues.
- Map the supply chain process and confirm the impacts.
- Engage with the right people at the right time in a coordinated and controlled way.
- Ensure there is effective communication and understanding between all parties.
- Produce a detailed plan of actions that all may follow and apply.
- Document all activities and record vital information for quality assurance, future decision making and system improvement.
Don’t waste valuable time starting from scratch, start using the experience of another to accelerate your progress and achieve success in your career and learn from Dave Barr. Enter the course Managing Engineering Change.
About Learn How to Source
Learn How to Source (LHTS) is an online platform based in Sweden, offering a range of procurement courses accessible globally. It serves as a community where procurement experts share their knowledge through online courses, designed for various experience levels from introductory to expert. Courses are concise, about 30 minutes each, and cover different aspects of procurement, tailored for different buyer roles. The courses focus on practical knowledge, presented by seasoned professionals, and includes quizzes and certificates. They can be accessed from any device, emphasizing micro learning for flexibility and efficiency.
Information about our Online Procurement courses in Swedish.