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:
I was already working for the company as a Cost Accountant when I was offered the role of Sales Account Manager, responsible for two OEM customer accounts totaling $250+ million in annual sales, I was both honored and cautious. My manager insisted I was the only candidate he’d consider. Flattered yet aware of the challenges, I accepted—seeking greater impact, career security, and a higher paycheck.
Determined to succeed, I threw myself into the role—long nights, endless emails, and a constant stream of issues, both new and old. With multiple program managers, each managing different product lines in their own way, I had no shortage of fires to put out.
Months in, I was still drowning. My boss told me I was doing great, but I was struggling to meet my own standards. Worse yet, the chaos showed no signs of slowing 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 assured me that everything was there and ready. It’s probably worth noting that Martin’s fingerprints were on most of the commercial issues I was dealing with, so I was wary from the start.
Engineering Change Quote Preparation:
In my role, I couldn’t afford to take things at face value. A poorly prepared quote could lead to missed costs—costs we’d never recover. I approached quoting like a lawyer preparing a case, anticipating every potential gap before the customer pointed it out.
Part of the reason it took so long was because I had to carve out a good chunk of time to tackle the quote properly;
- Examined the parts and equipment.
- Reviewed engineering change documents.
- Compared old and new CAD overlays.
- Analyzed the latest customer cost breakdown.
- Read the selected supplier quotes.
- Cross-checked change impact statements from engineering.
The deeper I dug, the more questions I had. I scheduled a meeting with Martin and our manager for the next day.
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 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:
Martin wasn’t expecting that meeting to expose so many gaps. He was embarrassed, but this wasn’t about him—I was tired of constantly cleaning up other people’s messes. My goal was simple: ensure the quote was airtight, protecting the company’s interests and making sure every dollar was reasonable and could be justified.
Martin hadn’t done his due diligence, but the larger issue was a company culture that allowed this kind of oversight. Why was I—the last line of defense—the first person to catch these critical errors?
Martin admitted this level of scrutiny wasn’t standard before I arrived, but when all was said and done, he and my Manager suggested we do this for every Engineering Change going forward. The dysfunction I uncovered wasn’t unique to Martin and this company—it was just the latest example of chaos and dysfunction, just like nearly every automotive supplier I’ve worked with.
Engineering change management is complicated, and it’s easy to see why companies struggle to get it right; however, when you know what you’re doing doesn’t work, why keep repeating the same mistakes???
Is your company overlooking critical gaps in its ECM process and systems??