Change Order Process

Collaborative Engineering Change Order Process By Himanshu Jain – Neopoint Consulting Tony Miller – Metro

Agenda – – – – – – –

Metro Overview Metro Integrated Environment Standard ECO Process Metro ECO Requirements Collaborative ECO Process How we did it Lessons Learned

Metro Overview • St. Louis Metropolitan area’s public transit operator – 42.5 miles Light rail system – 467 Buses – 65 LRV – 120 Para-transit vans – 6 Garage/Maintenance facilities

• Metro spends $96 million annually to operate and maintain • Metro Material Organization Structure CENTRAL

Brentwood

Debalivere

Metro Link

Illinois

Saint Clair

Metro Integrated Environment • Oracle 11.5.9 Public Sector – Financials, INV, WIP, BOM, OM, MSCA, CST, ENG, PO etc.

• Operational Environment – Maintenance Operations Group – Materials Management

• Integrated with Maximus Fleet-focus M5 • Collaboration between Operations and Materials – – – – – – –

Close to real time integration Validated material issues Job costing in M5 based on material issued Complete visibility of inventory on hand and transactions Controlled change process for any BOM changes Complete tracking and visibility of outside processing Integrated planning and scheduling

Oracle Applictions (Materials Group)

M5 Vehicle Maintenance System (Operations)

Oracle Integration with M5 Vehicle in for Maintenance

Apply Material Issues to Work Order

Work Order Created in M 5

Work Order Interfaced as Discrete Job

Material Available ?

No

Procure material on Urgent basis or Hold the Job

Yes

Material Issued to the Job

Cost Transactions

Interface Issue transaction to M 5

Accumulate Job Cost

End

Problems with ECO Process • • • • • •

Initiated on verbal communication from Operations No record in system of suggested changes Miscommunication Lead to wrong BOM & downstream effects Obsolete Inventory after changes PO’s not corrected appropriately At times lead to reactive process – Waited for the material request from Operations – Ordered material – On receipt of material changed the BOM

Standard ECO Life Cycle • ECO process uses two Statuses – ECO Status – ECO Approval Status

• Standard ECO Life Cycle Sequence

ECO Status

Approved Status

Start creating new ECO

Hold

Not Submitted for Approval

Complete data entry

Open

Not Submitted for Approval

Submit approval process

N/A

Approval Required

Oracle Workflow controls approval process Approve and release

N/A

Approval Required

Released

Approved

Production updates date

Scheduled

N/A

Effective date arrives

Implemented

N/A

Standard ECO Approvals •

ECO Approval using workflow: In this approval process, the ECO type in combination with ECO priority is linked to an Oracle workflow process. Once the ECO is submitted for approval the workflow takes over and controls the process till approval is granted. Once that happens workflow automatically updates the status.

•

ECO Approval using approval list: In this approval process, a simple approval list is used and submission for approval an Oracle alert is send out to all the members of the list. Once appropriate members approve the ECO, the status of the ECO is changed manually.

•

No Formal Approval: In this case no formal approval is required and status is set to approved

Standard ECO Approval Workflow

Metro ECO Requirements • Multi level approval process • Approval across departments • Allow collaboration and communication between operations and material group • Track and record all BOM changes • FYI notifications to managers and planners • Notification to creator on approval • Controlled Implementation of changes

ECO Approval Workflow

How we Did It? •

Customized ECO Approval Workflow –

Passed Approval Hierarchy to custom workflow

• • •

Defined ECO priorities Linked Priorities with ECO Type Associated Custom workflow to ECO Type and Priority

•

Created Approval Hierarchy –

Defined First Approval List •

–

Defined Second Approval List • •

–

VP of Maintenance Director of product development

Defined For Information Only List • • • •

–

Superintendents of maintenance

Superintendent of maintenance VP of maintenance Forecast and production scheduler Manager production and inventory control

Defined Approval Hierarchy in Manufacturing Lookups

Metro ECO Approval Workflow

Define ECO Priorities

Define ECO Change Type

Linking Workflow to ECO Type and Priority

Define First Approval List

Define Second Approval List

Define ECO “ For Information Only” List

Approval Hierarchy in Manufacturing Lookup

Profile Options Profile Settings for Changing Bills Only With ECOs To limit user’s access to bills of material only through ECOs, set the following Bills of Material profile options to No: • BOM: Standard Item Access • BOM: Planning Item Access • BOM: Model Item Access And the following Engineering profile options to Yes: • ENG: Standard Item Change Order Access • ENG: Planning Item Change Order Access • ENG: Model Item Change Order Access • ENG: Engineering Item Change Order Access. Profile Settings for Changing Bills With or Without ECOs With the same seven profile options listed above all set to Yes, bills can be changed with or without ECOs.

Benefits of Collaborative ECO process • Intangible Benefits – – – – – – – –

Better planning and Forecast is possible MRP is used to drive requirements Reduced material handling and warehouse management cost Operations can plan better with communication changes Operations validates and confirms changes No stock-outs because of better communication No loss of time waiting for material Shared responsibility of the change as everything is tracked and maintained in the system – Allows to collaborate with Operations to ensure all in stock material is used before change is implemented

Benefits of Collaborative ECO process • Tangible Benefits – Reduced Obsolete material from $300,000 to $40,000 on an annual basis. – Reduced inventorying of material by 25% because of better coordination. – Before ECO only 11% of material was on Kits, After ECO almost 80% of it is on Kits – Improved material availability to 99%

Lessons Learned • Approvers did not log in to Oracle to approve on a regular basis. – Changed to use of email notification

• Effective use of “Where used parts” list as part of the verification process. • Coordination between purchasing and product forecasters – Setting up alerts to facilitate this process

• Changes to approval hierarchy as organization structure changes. – Simple configuration changes to Approval list and Approval hierarchy enabled this easily

Q& A QUESTIONS ANSWERS

Thank You

Himanshu Jain – [email protected] Tony Miller – [email protected]