1 Introduction
1.1 Research issue
1.2 Capital goods: characteristics, complexities and challenges
1.3 Related literature, research motivation and research aim
2 Research framework and research questions
2.1 Research framework
2.1.1 Engineering change
2.1.2 Design variety
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Design variety at the product level is the altered state of a product’s design over time in terms of its components and interfaces.
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Design variety at the portfolio level is the degree of commonality between the designs within a portfolio (or, more generally, a set of related products). Lower commonality implies higher design variety.
2.1.3 Product delivery strategies
OSL | Type | Elements defined at the start of a project |
---|---|---|
1 | Engineering based upon a specific technology | One or more specific technologies are chosen as the basis for the engineering of all the custom built products |
2 | Engineering based upon predefined product families | Several specific product families are defined, independent from the customer order, using one or more technologies in a specific application area |
3 | Engineering based on predefined sub-functions and solution principles | The various product sub-functions are defined together with their associated solution principles within the specific product family |
4 | Engineering based upon predefined product modules | The product modules are defined in terms of the bills of material and the technical drawings. A product can be configured and constructed using the standard product modules |
5 | Engineering based on predefined finished goods | Standard configurations are engineered regardless of any specific customer orders. These companies invest heavily in customer order-independent engineering work |
2.1.4 Process variety and stability
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Process variety at the product level is the difference between intended process design and process execution (i.e., sequencing and timing of activities, use of human resources, machines, tooling).
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Process variety at the portfolio level is the difference between the delivery processes (from engineering until decommissioning) of products within a firm’s portfolio.
2.1.5 Engineering change process
2.2 Research framework and research questions
3 Methodology
3.1 Research design
3.2 Research planning and data collection
Site |
Gas company
| # interviews |
Industrial machinery
| # interviews |
---|---|---|---|---|
Preliminary interviews (11 interviews total) | Engineering manager | 1 | Development managers | 1 |
Project engineer | 2 | Process analysts | 3 | |
Quality assurance and control manager | 2 | Members Change Control Board (CCB) | 2 | |
First and second interview cycle (30 interviews total) | Engineering manager | 1 | Development managers | 2 |
Process engineering | 2 | Program manager | 1 | |
Project engineer | 4 | Project manager | 5 | |
Project construction manager | 3 | Process analysts | 4 | |
Lead maintenance engineer | 1 | Members CCB | 6 | |
Commissioning manager | 1 | |||
Other data | Procedures of related processes, e.g. engineering change process, configuration management, review of design base. 6 procedures comprising 60 pages were analyzed Execution plans: project execution, design execution, construction execution, maintenance execution Notes of various meetings Data obtained from a small consultancy-like project for the redesign of the engineering change process and modification process. The project was carried out by one of the authors Documentation related to the study of a large-scale engineering change (i.e., the design and installation of a safety valve) Data set of over 750 changes (engineering changes and modifications) | Procedures, such as engineering change management, phase transition process, configuration management process, etc. 8 procedures comprising 125 pages were analyzed Notes of meetings. Bi-monthly we attended to CCB meetings (12 meetings) and we participated in several configuration management meetings (10 meetings) Four expert meetings to validate the case narrative and to identify practices and challenges. Data set of over 9,000 ECs |
3.3 Data reduction and analysis
3.4 Case firm descriptions
Primary process | Customer | Dominant performance dimension | # employees, yearly sales | Environmental uncertainty | |
---|---|---|---|---|---|
Gas company
| Engineering, construction and maintenance of gas production plants | Oil and gas producer | Safety | Approx. 600, 200 million Euro | Relatively low |
Industrial machinery
| Development, engineering, production and maintenance of lithography systems | IC producer | System performance, Time to market | Approx. 6000, 3 billion Euro | Relatively high |
4 Case study data: descriptives
4.1 Firm product delivery strategies
4.1.1 Product delivery strategy at Gas company
4.1.2 Product delivery strategy at Industrial machinery
4.2 Engineering change types
4.2.1 Engineering change types at Gas company
4.2.2 Engineering change types at Industrial machinery
Initiator | New requirements | Improvement | Problem | Total | ||||
---|---|---|---|---|---|---|---|---|
Gas company
|
Industrial machinery
|
Gas company
|
Industrial machinery
|
Gas company
|
Industrial machinery
|
Gas company
|
Industrial machinery
| |
Engineering | 40 % | >98 % | 30 % | 50 % | 5 % | 50 % | 25 % | 50 % |
Manuf. | <1 % | <1 % | <5 % | 25 % | 5 % | 20–25 % | <5 % | 20 % |
Customer | 60 % | <1 % | 40–45 % | 15–20 % | 35 % | 20–25 % | 45 % | 20 % |
Supplier | <1 % | <1 % | 5–10 % | 1–5 % | <1 % | 1–5 % | <5 % | 1–5 % |
Other | <1 % | <1 % | 15–20 % | 1–5 % | 50–60 % | 1–5 % | 25 % | 1–5 % |
Total | 80–120 | 800–1,200 | 550–650 | 2,000–3,000 | 130–170 | 5,000–6,000 | 750 | 9,000 |
Gas company
|
Industrial machinery
| |||
---|---|---|---|---|
Example 1 | Example 2 | Example 3 | Example 4 | |
Engineering change description | Horizontal water/condensate storage vessels instead of vertical | Development of a new burner for the glycol unit | Development of a new particle generating pressure regulator | End of life replacement of a printer circuit assembly |
Reason for change | Improvement | Problem | New requirements | Improvement |
Explanation | This engineering change was initiated to reduce cost, construction time and site exposure hours. This engineering change was implemented after the ‘learning year’ | This engineering change was initiated to improve plant availability. The original burners failed after 1 or 2 years, due to thermal fatigue. The change was retrofitted to all other plants. This engineering change was implemented after several years in the project | For this engineering change the technical product documentation needed to be changed. Due to the impact of the change on other hardware it had to be put on hold, so that it could be connected to another engineering change. The engineering change was reassessed and implemented after approval | The objective of the engineering change was to replace a part of the printer circuit assembly. During the assessment process many extra people were involved which made it difficult to align the different views of the different experts |
4.3 Managing design variety
4.3.1 Managing design variety at Gas company
4.3.2 Managing design variety at Industrial machinery
4.4 Managing process variety
4.4.1 Managing process variety at Gas company
4.4.2 Managing process variety at Industrial machinery
4.5 Engineering change processes
4.5.1 Engineering process at Gas company
Change initiated in | |||||
---|---|---|---|---|---|
Criterium | Basic Design | Detailed Design | Construction | Commissioning | Maintenance |
The proposed change leads to a reduction of the capital expenditures (CAPEX) | 20 kEuro | 50 kEuro | No change | No change | Not applicable |
The proposed change leads to a reduction of the operational expenditures (OPEX) | 100 kEuro | 200 kEuro | No change | No change | Ad hoc |
The proposed change leads to a reduction of the maintenance expenditures (MAINTEX) | 100 kEuro | 200 kEuro | No change | No change | Ad hoc |
4.5.2 Engineering process at Industrial machinery
Gas company
|
Industrial machinery
| |
---|---|---|
PDS | Application of highly innovative technology in a pilot plant → OSL1 Plants delivered after pilot plant → OSL4/5 ‘Hands-off, eyes-on’ approach by the customer | PDS depends on program considered Extreme 1: focus on problem solving, use of sales handbooks → OSL4/5 Extreme 2: innovative, at the edge of science and technology → OSL1/2 |
Engineering change | Mix of small and large ECs Some ECs executed as modification Reduction of large ECs after learning year Improvement ECs are the biggest category | Mix of small and large ECs Change types also occur after first shipment Dynamic situation of retrofits and overlapping lifecycles Problem ECs are the biggest category |
Design variety | Focus on maximization of generic design information Three types of generic design (king size, standard size, double standard size) Use of generic and plant-specific project specification documents First attempts to distinguish between standard, variant, optional and specific design information | Focus on maximization of design reuse Extensive use of product platforms Product platforms include the common functions, technologies and components |
Process variety | Minimization of process variety Contracts include volume benefits and repeatability gains Use of generic and specific execution plans Much use of ISO9000-like procedures | Process variety depends on stage of product development Improvisation is often needed so that procedures and actual ways of working often contradict Capacity flexibility required due to engineering change ISO9000 certification but much deviation from procedures |
Engineering change process | Sequential process including management actors Important decisions concern affected plants (i.e., site-specific, retrofits, future design) and planning impact assessment | Formal procedure with many actors Steps are bypassed in case process is seen as an administrative obstacle to innovation Key elements of impact assessments include due dates and the programs and products the change applies to |
5 Findings
5.1 Research question 1: How do capital good firms manage design variety, considering product delivery strategy decisions and engineering changes?
5.1.1 Gas company
5.1.2 Industrial machinery
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Does this change affect one development project or multiple development projects?
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Is this change the standard for current platforms?
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Is the change a customer-specific solution, a solution for multiple customers or for all the customers within the product range?
5.1.3 Comparison
5.1.4 Conclusion
5.2 Research question 2: How do capital good firms manage process variety, considering design variety and product delivery strategy decisions?
5.2.1 Gas company
5.2.2 Industrial machinery
5.2.3 Comparison
5.2.4 Conclusion
5.3 Research question 3: How do capital good firms design engineering change processes, considering design variety, process variety and product delivery strategy decisions?
5.3.1 Gas company
5.3.2 Industrial machinery
5.3.3 Comparison
5.3.4 Conclusion
6 Engineering change management archetypes of capital good firms
Position of the PDS | Management of generic design information | Isolation of discontinuous engineering changes | Process management approaches | Engineering change process design | Case examples | |
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See Table 1
| See Sect. 5.1.4
| See Sect. 5.1.4
| See Sect. 5.2.4
| See Sect. 5.3.4
|
Gas company
|
Industrial machinery
|
Engineering based upon a specific technology (i.e., OSL1) | Initial analysis of the standards required in order to investigate reuse potential Management of overlap between projects and engineering changes | Isolation of discontinuous engineering changes into first deliveries of the product | Probe and learn, many developments coming from evolving insights | Open, ad hoc, informal | The engineering, construction and maintenance of the first (pilot) gas production plant | The development of a high-end lithography system (first stage of a project with already first customer deliveries) |
Engineering based on predefined sub-functions and solution principles (i.e., OSL3) | Maintenance of standards over the lifecycle of the products and platforms. Management of specification freedom by archiving design standards | Separate projects for (clusters of) discontinuous engineering changes to avoid that mainstream product deliveries are disturbed | Formal project execution process with decoupled engineering change teams for large discontinuous changes | Intermediate type that allows for combinations of small incremental changes and large discontinuous changes | N/A | The delivery of a higher volume of high-end lithography systems (after a year of ‘field’ testing knowledge of individual configurations at customer site) |
Engineering based on predefined finished goods (i.e., OSL5) | Focus on prevention of engineering changes based on predefined design standards | No isolation mechanisms needed due to a focus on generic design information | Formal project execution process with a clear network of activities and good insight into the effects of (often small) changes | Closed, stable, formal. | Copy exactly of the generic design in the delivery of a new gas production plant. In general only small engineering changes (and modifications) are allowed | The delivery of a lithography system with a large installed base (after several years of deliveries) |