An Engineering Change Order (ECO) is a call for a change in a product’s design, whether it is in the form of a repair or an improvement. The process for requesting an ECO is rigid, having to undergo intensive analysis and consideration from project management, but why would you need an ECO? Here are a few examples of why ECOs can be essential and how they can affect production processes.
At one or multiple points in a product’s lifecycle, improving its design might be requested. Project management must then consider if implementing the design change will have a positive effect on the company. Managers may wonder, “What is the opportunity cost for improving?” If an amendment will be costly for the company and have a low impact on their overall sales, it would be a poor business decision to implement an ECO. However, if a change would be low cost to implement and bring more revenue in the long run, it would be smart to approve an ECO. If the product is already in the stage of manufacturing, companies will often decide not to make a small improvement because it becomes very costly to make the change. In some instances, however, the company will not have a choice in deciding to reject a change in design if it is a crucial repair.
Another type of ECO can be a repair to product design. Unlike improvements, repairs not only optimize a design but ensure a product will function properly. A product that creates an unreasonable safety risk or fails to meet minimum safety standards is an example of when not issuing a repair becomes a liability for the company. Even if the repair is costly and harms the company’s revenue, project management must issue an ECO if the product is unsafe for customers. Upon realizing a defect in design, managers might issue a line stop, which halts all manufacturing until the ECO is received.
Companies need to be ready to respond to shifts in consumer preferences, as well as possible unforeseen safety risks that require immediate product design changes. An ECO is a critical part of keeping product development on track and ensuring the best possible outcome. By listing the full description, analysis, cost, and impact of a change, an ECO makes it clear to all stakeholders why a change is necessary. Having an organized method of handling product changes reduces potential design, manufacturing, and inventory errors, and minimizes development delays. Following good ECO practices also makes it easy to document a full history of the changes made to a product and when they occurred. Keeping a record of product changes will also help you solve any problems that arise after your product launches.