Bringing innovative products to market ahead of your competitors provides a sizable opportunity for manufacturers to increase profitability. Doing so, however, requires them to optimize product development processes. Though making changes to designs, as they process through the development cycle is a necessity, engineering change management has become a significant bottleneck in the process.
According to a research study conducted by the Aberdeen Group, 85% of participants report that their change management procedures are either broken or could be improved. Based on the hard lessons learned from over 200 companies, the report offers a glimpse at the best practices that can be implemented to ensure that change management creates efficiency, not bottlenecks.
The cost of inefficient change management
Change management, when done effectively, provides a major opportunity for improving development efficiency. When done incorrectly, it can lead to delays as stakeholders lose time waiting for decisions and updated information, or work that must be redone because it was based on outdated design details. It can also lead to higher costs when errors lead to scrap and rework.
A poorly managed change process prevents organizations from responding to time-to-market and cost pressures, which in turn, has a direct impact on product profitability. With the majority (85%) of study participants indicating problems with their current change management processes, there is a lot of opportunity for process improvement.
Best practices for change management
After identifying the best-in-class study participants, Aberdeen found that these leaders were taking the right steps to improve communication and collaboration, which in turn helped them streamline the change management process. These steps included adding capabilities that support process, knowledge management, organizational support, performance measurement and continuous improvement, and enabling technology.
Let’s now take a closer look at the best practices being put in place by best-in-class companies to better support change management.
Process. The best-in-class companies were 70% more likely than their competitors to create a formal plan for implementing engineering changes, which improves communication and promotes better collaboration among stakeholders. It also enables these companies to address the complexity of their products by planning out the implementation across engineering disciplines and the subsystems that make up the product. It also helps identify the necessary steps for supply chain collaboration and coordination.
Knowledge Management. These leaders ensure that information related to a change is readily available and are 74% more likely than their competitors to include supporting product data (CAD files and BOMs), analysis files, and other information with the change request. Doing so improves the decision-making process by making it easier to identify the impact of a proposed change. These leaders were also 36% more likely to centralize access to change history and 45% more likely to centralize access to the change status and approval. All this greatly improves collaboration and communication across all those impacted by the change.
Organizational Support. The best-in-class companies are 81% more likely to use a change review board to review and approve changes, which helps them assign accountability and ownership of the change process. These leaders also hold separate meetings to first review the change and determine if it should be approved, then hold a second meeting to focus on its implementation. This separates the review of the business value of the change from the more detailed decision as to how to execute that change.
Performance Measurement and Continuous Improvement. These leaders also differentiate themselves in the degree of control they hold over their business and ability to execute their goals. They are 79% more likely to audit the change process to make sure it is followed and is working, providing continuous feedback and the opportunity to regularly identify bottlenecks and continuously improve the process. They are also 2.2 times more likely to use metrics to track the effectiveness of the process. While this improves the change process itself, it also enables these leaders to find ways to prevent avoidable changes.
Enabling Technology. Best-in-class companies are 39% more likely to use product lifecycle management (PLM) software to manage engineering change, which provides a central location for design information, with traceability across deliverables and management of the change workflow. Traceability is key as it helps identify dependencies between components and automatically notifies affected individuals about a change that impacts their work.
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