Intro
My name is Todd Norwood and I’m the Founder and President of Intertwine Corporation. I’ve spent over 25 years working for automotive suppliers. The Automotive Supplier Chronicles is my monthly blog series where I share true stories about my experiences working for and with automotive suppliers. The stories you’ll read here are the very reasons Intertwine exists. These are true stories, but I’m not out to make fun of anyone or disparage any companies, so names are often changed.
Engineering Change Management: are we missing anything?
Background:
At one of the companies I worked for, I was asked to take on a Sales Account Manager role where I would be responsible for two OEM Customer Accounts with approximately $250+ Million per Year in Sales. When the position opened up I was the only person within the company that my new Manager said he would consider for the job; and I was flattered. I had some concerns, but in the interest of my long- term job security; and because I desired a higher profile position where I could make a bigger impact and potentially earn a bigger paycheck, I accepted.
Eager to do well I jumped right into the new role, regularly working late and taking my computer home as I tried to get up to speed while managing a seemingly endless supply of old and new issues. I worked with several Program Managers who were each responsible for different product lines; and who each had their own way of doing things.
Fast forward a few months and I’m still swimming in it. My new boss was happy with what I was doing; giving me kudos almost daily. I was working lots of extra hours, but the truth is that I was struggling to keep up with everything to the standard I set for myself. I could also see it was never going to slow down.
Martin the Senior Program Manager:
One of the Program Manager’s I worked with, “Martin”, was harping on me for almost two weeks to “Spin the CN”, which meant submit the official quote for an Engineering Change our customer wanted.
This was a big engineering change that would take some time to go through, but Martin said everything I needed was there. It’s probably worth noting that Martin’s fingerprints were on most of the commercial issues I was dealing with, so I was on guard going into it.
Engineering Change Quote Preparation:
As a Sales Account Manager, it’s important to me that I understand what I’m trying to sell. I try to anticipate what the Customer is going to ask and make sure I know the answers before they ask. I also want to make sure we don’t miss anything, because you don’t get to go back and ask for more money if you do. I would say that being a Sales Account Manager for a Tier I Supplier is a little like being a Lawyer – you need to prepare your case and look for any holes the opposing party may try to expose, then develop a defense plan to cover them up.
The reason it took so long to work on this was because I knew it would take a few hours of focus; and it was hard to find that kind of isolated time. I promised Martin I would get it done that week; and I started digging into it mid-week on a summer afternoon. Right away I wanted to go look at the parts and equipment – I asked Martin to go with me, but he didn’t want to go out on the shop floor because it was really hot, plus he left every day at 4:00 PM; and it was getting close to that time. I started an hour before Martin each day, but I decided to go out and look at things by myself.
I went out on the shop floor and looked at the parts and equipment. I read through the Engineering Change documents in our system. I looked at the old and new CAD overlay. I reviewed the latest customer cost breakdown. I read the supplier quotes. I checked out the change impact statements from our engineering team. By the time I was done studying what was happening with this change I had a lot of questions, so I scheduled a meeting with Martin and our Manager for the next day. Here’s how that meeting went (after our initial greetings):
Engineering Change Review Meeting:
Me: One of the first things I noticed is that it’s not in your change description, but it looks like all of the raw material specifications are being changed back to galvanized coated material. In other words, with this change the customer is undoing the material cost reduction changes that have been in process for over a year; and which I’ve spent countless hours over the last six months trying to fix the pricing issues on. They’re going to reverse all of those changes?
Martin: Uh no, I don’t think so. I think that was probably just a mistake. I’ll check that with the customer engineer (jots down note) and get the BOM updated before we spin the change.
Me: I saw their was Assembly Tooling Cost of $300,000. That seems high considering that it looks like all we’re doing from an Assembly standpoint is a new holding fixture for the new sunroof ring, plus we’re adding a few more fasteners, but they’re the same fasteners we already put on the panel with a robot. Is there more to this than just a new holding fixture plus some robot programming for the additional fasteners? Surely that doesn’t cost $300,000, so what am I missing? Also, I see the lead time is 26 weeks – do you know how that breaks down and how long the assembly line will need to be down for the changeover? Is it something we can do while still being able to support current production or do we need to take the line down, which means build a bank of parts, because that would affect our cost and timing, right?
Martin: I’m not sure. I’ll have to get with “Bill” (Assembly Engineer) and ask him.
Me: I didn’t see any cost for the Assembly Checking Fixture – how are we checking the new sunroof ring and fasteners?
Martin: Oops! I forgot to ask “Eric” (Checking Fixture Specialist) for a quote. I’ll get with him after this meeting and get that added.
Me: I see we have $100,000 for Rack Modification for the new Sunroof Ring – do you know the details of that? When I looked at the change in CAD and then looked at the racks it looks to me like we can probably use the existing rack with no modifications; and if they don’t work as is I don’t think you can modify them and make them work because their isn’t enough clearance at the top, which means you need a whole new fleet and I’m pretty sure that would cost more than $100,000. What is the story with the rack cost?
Martin: That was just an estimate I made up. I wasn’t sure. I figured we should have something in there. We didn’t have a Packaging Engineer for a while, but I should probably have asked the new guy “Shawn”… (looks at our boss, drops head, writes down notes) and I’ll do that after the meeting.
Me: Do you know what the plan is for service parts? Is this a one-time change, meaning all previously produced vehicles will be serviceable with this new design level or do we need the ability to produce both versions; and if so, is that interchangeability included in our assembly cost and plan?
Martin: I don’t know, let me check (embarrassed)
Me: In terms of the additional fasteners: In the engineering change description it says we’re adding two, going from 13 to 15. When I looked at our costed Bill of Materials in PLEX (our ERP/MRP system) it says we already have 15. When I looked at the physical parts out on the floor I count 14, with an equal number on both sides. Also, the CAD file name for the current part, which is referenced in your engineering change documents, isn’t in the folder where it should be if that’s the correct name; and it looks like the new CAD has 16… What’s going on here with the fasteners – how many are we supposed to have now and in the future?
Martin: I don’t know. I took this part over from Dave and I just knew that the customer said he was adding two with this change.
We went through some other questions on our supplier quotes that we needed to have answered. There were some issues with how the timing was laid out. We were also missing the cost for the pre-production samples which the customer wouldn’t pay for separately. We parted the meeting with an agreement for Martin to schedule another meeting when we had everything.
Conclusion:
Needless to say, Martin didn’t look very good in that meeting. I think he took the embarrassment he endured personally although that was not at all my intent. I was tired of working extra hard to clean up other people’s messes; and it had become a reoccurring theme in my new Account Manager Role. I wanted to make sure we got the details right, which included protecting the company’s interest by ensuring we had all of the cost captured and that the amount of money we were requesting could all be explained and pass the test of reasonableness.
I think Martin is partially to blame because he wasn’t putting in the effort needed; and he most certainly wasn’t paying attention to the details. On the other hand, in my opinion, most of the blame falls on the company and management for enabling a situation like that to occur. I was the last line of defense – once I spun the CN there was no undoing it. In my opinion, as an organization we should’ve never reached that point so obviously unprepared.
Martin mentioned more than once that what we did in the meeting was not how they were processing and reviewing engineering changes before I joined the group. The situation with Martin was unique in terms of the number of items that were missed, but it wasn’t that much different than the chaos and confusion that I’ve experienced at pretty much every automotive supplier I’ve worked for or with.
Engineering change management is complicated, and there are valid reasons why people and businesses struggle to get it right; however, when you know what you’re doing isn’t working why keep doing it the same way???
Is your company missing anything with their engineering change management process and system?