ECM Overview-best Practices

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Assisting Companies Leverage

Investments in SAP Solutions

Engineering Change Management

Overview and Best Practices

Eric Stajda and Shobhit Singhal

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Agenda



Definition of Change Management Process



Issues and Goals



Industry Standard Change Management Processes



Typical Change Management Processes



Engineering Change Management (ECM) vs.

Engineering Change Management (ECM) vs. Production Change

Production Change

Management (PCM)



Change Management in SAP



Utilizing SAP Workflow



Example Implementations

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Agenda



Definition of Change Management Process



Issues and Goals



Industry Standard Change Management Processes



Typical Change Management Processes



Engineering Change Management (ECM) vs.

Engineering Change Management (ECM) vs. Production Change

Production Change

Management (PCM)



Change Management in SAP



Utilizing SAP Workflow



Example Implementations

(4)

Definition of Change Man

agement Process



 There are different types of change management, includingThere are different types of change management, including



 Organizational Change ManagementOrganizational Change Management



 ChCh_{ange management is a systematic approac}_{ange management is a systematic approac}hh_{to dealing wit}_{to dealing wit}hh

c

chh_{ange, bot}_{ange, bot}hh _{from t}_{from t}hh_{e perspective of an organization and on}_{e perspective of an organization and on tt}hh_e_e

individual level. A somew

individual level. A somewhh_{at ambiguous term, c}_{at ambiguous term, c}hh_ange_ange

management

managementhh_{as at least t}_{as at least t}hh_{ree different aspects, including:}_{ree different aspects, including:}

adapting to c

adapting to chh_{ange, controlling c}_{ange, controlling c}hh_{ange, and effecting c}_{ange, and effecting c}hh_{ange. A}_{ange. A}

proactive approac

proactive approachh_{to dealing wit}_{to dealing wit}hh_c_chh_{ange is at t}_{ange is at t}hh_{e core of all t}_{e core of all t}hh_ree_ree

aspects. For an organization, c

aspects. For an organization, chh_{ange management means defining}_{ange management means defining}

and implementing procedures and/or tec

and implementing procedures and/or techh_{nologies to deal wit}_{nologies to deal wit}hh

c

chh_{anges in t}_{anges in t}hh_{e business environment and to profit from c}_{e business environment and to profit from c}hh_anging_anging

opportunities. opportunities.



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

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Assisting Companies Leverage Investments in SAP Solutions

Definition of Change Management Process

 To start with, a standard definition of change management

 TheCh_{ange Management process in Systems Engineering is t}h_e

process of requesting, determining attainability, planning,

implementing and evaluation of ch_{anges to a system. It} h_{as two}

main goals: supporting th_{e processing of c}h_{anges and enabling}

traceability of ch_{anges, w}h_ich_sh_{ould be possible t}h_rough_proper

execution of a defined process.

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

 ECR _(EngineeringCh_ange R_equest)  EC_{M (Engineering}Ch_{ange Management)}  ECN _(EngineeringCh_ange N_otice)

 ECO _(EngineeringCh_ange O_rder)  Etc.

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

 Controlling and implementing ch_{anges in a controlled fas}h_ion

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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 _oth_{er areas of}

organization (ex: Manufacturing)

 Limited scope (ex: O_{nly control c}h_{ange to drawings)}  Not appropriately workflow enabled

 Process is not lean

 Cycle time is long

 Extended supply ch_{ain not integrated wit}h _process  No ability to measure KPIs, business metrics, etc.

 Visibility of ch_ange h_{istory limited}

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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 th_{e same process and not easily c}h_anged  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 t}h_eh_{eavy lifting}  Simplify th_{e process}

 Reduce cycle time

 Improve collaboration during ch_{ange and implementation process}  Eliminate errors

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

 Better internal/external communication of ch_ange  Paper-free process

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Industry Standard Change Management Processes

 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 "ch_{ange faster and}

document better." C_{MII evolved into a met}h_{odology for}

accommodating ch_{ange 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, wh_ich_{jointly form t}h_{e c}h_ange

management process. Th_{ey are: Identify potential c}h_ange,

Analyze ch_{ange request, Evaluate c}h_{ange, Plan c}h_ange,

Implement ch_{ange and} R_{eview and close c}h_ange. Th_ese

activities are executed by four different roles

 Book: ³Analysis on Engineering Change Management Based on Information Systems´

 EngineeringCh_{anges (E}C_{s) are inevitable and frequent in}

manufacturing enterprises.Th_{e primary c}h_{allenge in efficient}

management of EC_{s arises because t}h_{e sources as well as}

th_{e effects of an E}C _{are spread across different p}h_{ases of t}h_e

product lifecycle. With_th_{e application of information systems}

in enterprises, it becomes an urgent problem to run integrated engineering ch_{ange management«}

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Industry Standard Change Management Processes

 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

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Typical Change Management Processes

 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 w

h

_{en making c}

h

_anges



Ex: Auto suppliers use c

h

anges as a way of capturing additional

profits against a given contract

Planning of

Engineering

Ch

_ange

Implementation

of Engineering

Ch

_ange

R

_{elease of}

Engineering

Ch

_ange

E

CR

_E

CO

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CN

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Typical Change Management Processes

 Example 1 ± Simple change management process

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

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Typical Change Management Processes

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

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Difference Between ECM and PCM

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

 EngineeringCh_{ange Management (E}C_M)  ProductionCh_{ange Management (P}C_M)

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

 Requesting th_{e c}h_ange

 Doing an analysis of th_{e c}h_ange  Approving it

 Making updates to drawings, BO_{Ms, specifications, etc.}  Completing a final review

 Releasing data from th_{e engineering group}

 Data is often ³thrown 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!)

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Difference Between ECM and PCM

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

 Extending material master views to plants

 pdating production BO_Ms  Disposition of goods

 Preparing th_{e manufacturing floor to be able implement c}h_ange  Ordering goods

 Contacting partners about th_{e c}h_ange  Etc.

 You may be doing PCM for multiple plants or different groups

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Difference Between ECM and PCM

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

 This means h_{aving t}h_{e groups implementing t}h_{e c}h_{ange being}

involved in th_{e c}h_{ange process early on t}h_{is avoids t}h_{e ³t}h_{row it}

over th_{e 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 wh_{at is coming}

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

 Do not just start at release of th_{e c}h_ange

 Ex: ow soon can production BO_{Ms and ot}h_{er information be}

updated? Wh_{y wait?}

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

 Easy to see wh_{ere c}h_{ange started and w}h_{ere it ended}

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Change Management in SAP

 There are three basic options for implementing change management within SAP

 Change Masters

 ECR_/ECO_Process

 Notifications with Ch_{ange 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

 VariantC_{onfiguration Information}  Task Lists

 (note: Key objects are listed above« th_{ere are many ot}h_ers)

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Change Management in SAP

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

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Change Management in SAP

 History of every change to the associated objects is recorded

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Change Management in SAP

 The simple change process

 Very few participants in th_{e c}h_{ange process}  Linear process with _{not muc}h_{collaboration}  Not much_workflow

 Changes can be made immediately and released at a defined date in th_{e future}

 Common steps

 Change definition usually comes from supervisors/managers

 Change approval usually verbal/ paper based.

 Change execution most advanced usersh_{ave aut}h_{orization to}

ch_{ange objects wit}h_{out formal process}

 Change release ch_{anges are released based on validity date}  Solution

 Use SAP Ch_{ange Masters as t}h_{e c}h_{ange record}  Some use of SAP Workflow

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Change Management in SAP

 A view of the SAP Change Master

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Change Management in SAP

 A more controlled process ± SAP ECR/ECO

 The SAP ECR_/ECO _{is very similar to t}h_{e c}h_{ange master}

 Additional controls and system status network is added on top of th_e

ch_{ange master}  From SAP h_elp:

If th_{e decision is made t}h_{at an engineering c}h_{ange is necessary, an Engineering}Ch_ange R_{equest (E}CR_{) is created on t}h_{e basis of t}h_{e c}h_{ange notification and bot}h_{objects are}

linked afterwards. N_{ow t}h_{e affected objects (for example, documents, B}O_{Ms) are}

assigned.Th_{is can be done using drag drop if t}h_{e integrated product structure browser}

is used.N_{ow t}h_{e internal c}h_{ange process for t}h_{e selected objects is started.}

In th_{e next optional step, t}h_{e feasibility and necessity of t}h_{e c}h_{ange can be c}h_{ecked by}

responsible agents for all objects affected. If all objects can be ch_{anged, t}h_{e approval}

process can be started.N_{ow all departments affected by t}h_{e c}h_{ange can be involved.}

Viewing andR_{edlining can be used to v iew documents and to provide feedback}

electronically during th_{e process. If everybody} h_{as approved t}h_{e c}h_{anges, t}h_{e E}CR_can

be converted into an Engineering Ch_angeO_{rder (E}CO_{) for t}h_{e p}h_{ysical c}h_{ange of t}h_e

affected objects. Th_{erefore, t}h_{e objects are sent to t}h_{e responsible agents w}h_{o make t}h_e

ch_anges.Th_{e c}h_{anges do not become effective until t}h_{e responsible agent in}

configuration managementh_{as released t}h_{e E}CO_{. Wit}h_th_{e release, c}h_{anges are}

effective for th_{e effectivity parameters, for example, valid-from-dates or serial numbers,}

wh_ich _{are used in t}h_{e E}CO_.Th_{e release itself can}h_{appen eit}h_{er in one step as a general}

release or using a so called release key as a ph_{ased release, w}h_ich_{allows t}h_{e release}

for different areas, such_{as costing or production, step by step.}

If ch_{anges are released for running production orders, t}h_eO_rderCh_{ange Management}

(OC_{M) process is triggered. In t}h_{is process, c}h_{anges can be adopted to running}

production orders in a controlled process taking into account th_{e current status of t}h_e

production order.

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Change Management in SAP



ECR/ECO process (general flow)

Create ECR with all associated objects; attach accompanying docs Prepare all Red Line Markups With Pkg Prepare Request Forms Approve ECR? Reject ECR Yes No Process BOM And Rtg changes Close ECO Release ECO Get Signatures Identify Change Required Create/approve new Doc Versions Verify Object Changes

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Change Management in SAP

 When the ECR/ECO process is used

 The ECR_/ECO _{process is used w}h_{en a more controlled process for}

making ch_{ange is required}

 Major difference objects are add to th_{e c}h_{ange and t}h_{en approved}  Change do not h_{appen to t}h_{e objects until c}h_{ange are approved}  Validity date is not required up front only wh_{en ready to implement}

vs. ch_{ange master immediately requires a suggested validity date for}

th_{e c}h_ange

 As with _th_{e c}h_{ange master, you can use SAP W orkflow for routing of}

th_{e c}h_ange

 Digital signature used to control ch_{ange status c}h_anges

 Disadvantage: System status network is not ch_{angeable and process}

must be followed as defined by SAP

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Change Management in 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 th_eh_{eavy lifting}

 Used by industries wh_ich_{are tig}h_{tly regulated and c}h_{ange processes}

are often critical and length_{y (e.g. P}h_{armaceutical, aerospace etc)}  Common Steps:

 Change identification can be anyone in th_{e organization}  Change definition ch_{ange is defined using SAP notification}

objects wh_ich_{serve as base for collaboration and}

documentation

 Pre-ch_{ange 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

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Change Management in SAP

 A view of the a change notification

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Change Management in SAP

 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

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Change Management in SAP

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

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Change Management in SAP

 Advantages and disadvantages of each approach

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Simple Change

Master process

Easy to setup Less over h_ead

Fastest process

Best suited for design ph_ase

Ch_angeh_{istory is not}

compreh_ensive

Ch_{ange collaboration is}

informal and optional Any errors are usually

discovered after th_e

implementation

ECR/ECO process

ood ch_ange h_istory

documentation More controlled process

Allows better collaboration

Allows greater flexibility in ch_{ange process}

Less errors Best suited for production ph_ase

T_{akes longer to setup} Ch_{ange process tends}

to be longer

ECR/ECO with

notifications and

digital signatures

Best ch_ange documentation Extremely controlled and guided process Best collaboration Process can be as flexible as required Minimum ch_{ances of}

error

elps in meeting

regulatory requirements more efficiently

ardest and longest to setup

Maintenance over h_ead

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Change Management in SAP

 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 w ith a Change Master or ECR/ECO

 This offers th_{e most functionality and} h_{as been successfully}

implemented by LeverX and SAP at a number of customers

 Variety of industries, including automotive and medical devices

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Utilizing SAP Workflow

 What is SAP Workflow?

 SAP Business Workflow can be used to define business processes th_{at are not yet}

mapped in th_eR_{/3 System.}Th_{ese may be simple release or approval procedures, or}

more complex business processes such_{as creating a material master and t}h_e

associated coordination of th_{e departments involved. SAP Business Workflow is}

particularly suitable for situations in wh_ich_{work processes}h_{ave to be run t}h_rough

repeatedly, or situations in wh_ich_th_{e business process requires t}h_{e involvement of a}

large number of agents in a specific sequence.

 Very powerful is used correctly

 Issue companies attempt to overcomplicate th_{e workflows, adding to}

many bells and wh_{istles, causing future support issues}  The role of workflow is two-fold

 Inform users of activities th_{ey need to perform as t}h_{e c}h_{ange moves}

along its lifecycle

 Send updates about th_{e status c}h_{anges 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

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Utilizing SAP Workflow

 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 ch_{ange t}h_{at involves product XYZ once saved,}

based on th_{e c}h_{anging product correct notification is sent to t}h_{e manager}

in ch_{arge of identified product}  Yes, the workflow supports the following

 Workflow notifications sent to O_{utlook inbox}  Deadlines for tasks

 Ability to do ³adh_{oc´ workflows from different SAP objects}  Maintaining substitutes wh_{en on vacation or out of t}h_{e 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

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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

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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

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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 ch_{anging object A, you must c}h_{ange object B}