Analysis of engineering change orders (ECOs) shows that the vast majority are caused by preventable design and manufacturing errors. These range from simple drawing and data entry mistakes to more complex – yet preventable – errors such as designs that are difficult to manufacture and assemble or to service. In an upcoming webinar, I will discuss two industry studies: an industrial equipment manufacturer where preventable ECOs accounted for 66% of the total, and a heavy equipment manufacturer that estimates that more than 80% of the ECOs were caused by preventable errors. (I published another ECO analysis here.)
These numbers are staggering. However, to put a more pragmatic spin on the discussion, it’s not quite realistic to expect that all of these mistakes can be detected and rectified, as I discuss in another blog post. Yet, the cost of design and manufacturing errors and just managing ECOs are so high, that eliminating even a modest portion of them would be highly valuable.
In the webinar, I will cite two examples of companies that adopted a systematic approach to detecting and preventing potential errors early in the design cycle. An electronic manufacturing services company reported 90% reduction in manufacturing line downtime and 50% reduction in scrap, and overall improvement in product quality and customer satisfaction. An automotive manufacturer reported estimated savings of $4.8M per year from improved throughput and preventing rework, reduction in tooling expenses, and savings in warranty expenses.