What Is the Engineering Change Order (ECO) Process in Manufacturing?

The famous quote, “the only constant in life is change,” is also true for a product's design. Very rarely will you have a design that never goes through any changes. As you move through development and into production, you will often discover opportunities to improve performance, reduce cost, address quality issues, or adapt to new supply chain realities. These changes may be necessary, but implementing them directly on the factory floor without structure can lead to confusion, rework, and inconsistent products. This is where the Engineering Change Order (ECO) process becomes essential.

An ECO is the formal method used to document, evaluate, approve, and implement modifications to a product’s design or manufacturing process. It ensures that everyone involved in the business understands what is changing, why it is changing, and how the change should be rolled out. 

However, managing an ECO effectively requires collaboration between the brand and the contract manufacturer. The brand typically owns the design and initiates or approves changes, while the contract manufacturer manages execution on the production line by modifying tools, updating standard operating procedures, training operators, and controlling inventory. When both sides are aligned, changes can be implemented smoothly and with minimal disruption to output. When communication breaks down, even a small adjustment can lead to major complications.

In this blog, we’ll walk through what the ECO process is, the key stages involved, and how to coordinate roles and responsibilities with your contract manufacturer to ensure every change is executed correctly.

What Is an Engineering Change Order (ECO)?

An ECO is the formal, documented process used to modify a product’s design, specifications, Bill of Materials (BOM), or production workflow after the initial design has already been released. It provides a controlled method for evaluating the impact of a change and then implementing that change across engineering, procurement, and manufacturing without disrupting product consistency.

An ECO can apply to almost any aspect of a product. It may involve adjusting a dimension on a machined component, changing the grade of plastic used in an injection-molded part, updating assembly steps, or modifying packaging materials. In many cases, an ECO also means updating the 3D CAD models, 2D drawings, BOM revision numbers, inspection criteria, jigs, fixtures, or firmware associated with the product.

The purpose of an ECO is to ensure that everyone is working from the same production data (such as revision) of the design and that no unauthorized or unclear changes are introduced. Without a formal change order process, production teams may operate from outdated documentation, which can lead to inconsistent builds, quality issues, rework, and lost time. By using an ECO system, every change is recorded, reviewed, approved, and traceable, reducing risk and preserving product integrity throughout the manufacturing lifecycle.

When Is an ECO Needed?

The need for an ECO typically arises when a product’s performance, manufacturability, cost, or supply chain conditions change. During early development builds, EVT, DVT, and PVT, engineers often identify design improvements or discover issues that must be corrected before moving into higher-volume production. These adjustments should be captured and implemented through the ECO process to ensure they are properly communicated and controlled.

ECOs are also common once a product is already in production. For example, a part may need to be redesigned to reduce cost, or a supplier may discontinue a component, requiring an alternative. If field returns, customer complaints, or internal quality inspections reveal a recurring issue, an ECO may be required to correct the problem at the source. Changes may also be necessary when regulatory requirements shift, such as updates in safety certifications, labeling, or environmental compliance.

In short, an ECO is needed anytime a modification to the product or process could impact how it is built, how it performs, or how it is supported in the supply chain. The key is that the change must be intentional, evaluated, and documented, not made informally or communicated through casual conversation. This structured approach ensures that improvements enhance the product without introducing new risks.

Common situations where an ECO is needed include:

• Improving performance or functionality of a part or assembly

• Resolving quality issues identified during EVT/DVT/PVT or in production

• Reducing cost through material, process, or supplier changes

• Replacing obsolete or long lead-time components

• Updating tolerances, dimensions, finishes, or materials in drawings

• Adjusting assembly steps, testing procedures, or work instructions

• Changing packaging specifications, labeling, or regulatory markings

• Aligning with new compliance requirements (UL, CE, RoHS, etc.)

• Addressing feedback from customers, field service teams, or return analysis

Key Stages of the ECO Process

The ECO process provides a structured workflow to ensure that every modification is evaluated, documented, approved, and implemented correctly. While the specific terminology may vary by company, the core stages are generally consistent across manufacturing environments.

Identify the Need for Change

The process begins when someone identifies an issue or opportunity for improvement. This may come from engineering teams during development builds, from quality control during production, from supply chain during sourcing, or even from customer feedback. The goal at this stage is simply to acknowledge that a change may be beneficial or necessary.

Create the Engineering Change Request (ECR)

Before any work is done, the proposed change is documented in an Engineering Change Request (ECR). The ECR outlines the problem, the reason for the change, the scope of what will be affected, and a preliminary idea of the solution. The ECR acts as a signal to begin evaluation, but it does not authorize the change yet.

Impact Assessment

The ECR is reviewed by key stakeholders across engineering, supply chain, production, and quality. The team evaluates questions such as:

• Does this affect multiple parts or assemblies?

• Are new materials, suppliers, or tooling changes required?

• Will the change increase or decrease cost?

• Are there inventory or lead time considerations?

The reason this stage is important is that if you don’t fully understand the change and the impact of this proposed change then it can lead to delays, quality issues, and more. 

ECO Documentation and Approval

Once the change is confirmed and the impact is understood, the ECO is created. This includes:

• Updated 3D CAD models

• Updated 2D engineering drawings

• Revised BOM (with new revision levels clearly identified)

• Updated work instructions and QC checkpoints

• Any changes to software, firmware, or labeling

The ECO is then routed for formal approval, typically requiring sign-off from engineering, quality, supply chain, and sometimes customer leadership if the change originates from the contract manufacturer.

Implementation on the Production Line

After approval, the contract manufacturer is responsible for executing the change. This may include modify tooling, training operators, updating inspection methods, and coordinating with suppliers for new materials. You also need to decide what happens to the existing inventory, such as using it all up, reworking it, or scrapping it.  

Verification and Closure

Finally, the change must be validated. This often involves sample inspections or a pilot run to confirm the new revision meets specifications and that the change did not introduce unintended issues. Once verified, the ECO is closed, and the new revision becomes the production standard.

Roles and Responsibilities: Brand vs. Contract Manufacturer

Managing an ECO effectively requires clear ownership. While both the brand (or product company) and the contract manufacturer are involved in the process, their roles are not the same. Misunderstanding who is responsible and not having clear communication are the most common reasons why an ECO can fail. 

The brand typically owns the product design. This means they are responsible for defining the functional requirements, approving changes, and ensuring the product continues to meet performance and compliance expectations. The brand decides what needs to change and why the change matters from a product, customer, or business standpoint.

The contract manufacturer, on the other hand, owns execution. Once a change is approved, the contract manufacturer updates production processes, tooling programs, assembly instructions, and quality controls to ensure the new revision is consistently manufactured. The contract manufacturer is responsible for training operators, updating machine settings, communicating changes to sub-suppliers, and making sure the shop floor transitions smoothly to the new revision.

Here are the responsiblities for both the brand and the contract manufacturer. 

Brand / Product Company Responsibilities

• Initiate or approve the ECR

• Provide updated 3D CAD models, drawings, and BOM revision changes

• Approve the final ECO before implementation

• Confirm the change meets product performance and customer needs

Contract Manufacturer Responsibilities

• Evaluate manufacturability and cost implications during impact assessment

• Update production documentation, tooling, work instructions, and SOPs

• Train operators and ensure the new process is repeatable

• Manage inventory transition (use-through, rework, or scrap)

• Validate the change with quality checks or pilot runs

Clear communication between both sides is essential. If the brand sends informal instructions (for example, a screenshot over WeChat saying “make this dimension slightly larger”), the contract manufacturer may not fully understand the change or may interpret it differently. Likewise, if the contract manufacturer implements tooling changes without formal documentation, the product could drift from its intended design. A structured ECO process prevents these situations by ensuring that every change is documented, reviewed, and approved before execution.

Best Practices for Working With Your Contract Manufacturer During an ECO

A well-managed ECO process is less about speed and more about following the proper process. When working with a contract manufacturer, these best practices help ensure that changes are implemented smoothly and without disruption to quality or output.

Share Complete and Clear Documentation

Avoid partial updates or informal chat instructions. Every ECO should include updated CAD models, 2D drawings with revision levels, a revised BOM, and any relevant testing or inspection requirements. If only part of the documentation is updated, inconsistencies will carry into production.

Ensure Revision Control Is Consistent Across All Files

The BOM, CAD files, drawings, packaging labels, assembly instructions, and QC documents must all reference the same revision level. Small mismatches can lead to mixed builds, confusion, and rework. The contract manufacturer should confirm that old revision documentation is removed from the shop floor to prevent accidental use.

Evaluate Material and Inventory Before Implementation

Before introducing a change, review the current stock of parts and materials. You must decide whether to:

• Use existing inventory until it is consumed

• Rework materials if feasible

• Scrap outdated components

This decision affects both cost and timeline and should be coordinated between procurement and production.

Conduct a Controlled Verification Run

Do not switch immediately into full production with the new revision. A short validation build, such as another production validation test (PVT) allows the team to confirm the change works as intended and that the adjustment has not introduced new issues. This step is especially important when tooling or structural parts are altered.

Document the Change Communication Pathway

Both sides should know exactly where ECO communication lives. Whether using PLM software or even a BOM software, the process must be traceable so you can go through the history to see what changed and why. This prevents confusion and ensures operators and quality inspectors always reference the correct revision.

Avoid “Quick Fixes” on the Production Line

A contract manufacturer may sometimes find a fast way to address a problem during assembly. While this can be helpful in emergencies, these adjustments should always be documented and flow back into the ECO process, otherwise, the product slowly drifts away from the intended design.

Common Mistakes to Avoid

Even with a formal ECO process in place, certain missteps can introduce delays, inconsistencies, or avoidable costs. Understanding these common challenges helps both the brand and the contract manufacturer maintain control throughout the change process.

Making Informal or Verbal Changes

Quick suggestions, such as “just change the tolerance here,” often lead to inconsistent parts and confusion. If a change is not documented, it is not controlled. Every adjustment must flow through the formal ECO process, even when the fix seems minor.

Updating CAD Models Without Updating Drawings or the BOM

It is common for teams to modify the 3D model but forget to update the 2D drawing or BOM revision level. This creates a situation where designers, production, and QC teams may each be working from different references. All controlled documents must be updated together and released as one revision package.

Not Reviewing Existing Inventory Before Implementing the Change

If a change is approved but there are still thousands of units of previous parts in storage, the result may be waste, rework, or mismatched assemblies. Always decide in advance whether to use-through, rework, or scrap old material before implementation.

Skipping the Verification Build

Moving directly into full production with a new revision increases the risk of discovering problems late, when they are more costly to fix. A short verification run confirms that the new design works as intended and that the updated work instructions are clear and repeatable.

Assuming the Contract Manufacturer Will “Figure It Out”

A contract manufacturer is responsible for executing the change, but they cannot interpret design intent that is not documented. Ambiguity leads to guesswork, and guesswork leads to inconsistent builds. Clear documentation protects against this.

Leaving Out Downstream Suppliers

If sub-suppliers or component vendors are not notified, old materials or outdated tooling may still be used. Change communication should flow through the entire supply chain, not just the final assembly line.

Conclusion: The ECO Process

Every product evolves over time, and the ECO process ensures that these changes are implemented intentionally, consistently, and without confusion on the production floor. By documenting the reason for the change, evaluating its impact, updating all supporting files, and verifying the results, the ECO process protects both product quality and manufacturing stability.

Success depends on coordination between the company and the contract manufacturer. The brand defines what needs to change and approves the final design, while the contract manufacturer manages how the change is executed on the production line. When each side understands its role, and documentation and communication are handled systematically, changes become smooth, predictable, and controlled rather than disruptive.

A disciplined ECO process not only prevents costly mistakes but also allows a product to evolve and improve throughout its lifecycle. This creates better outcomes for the customer, strengthens the reliability of your supply chain, and ensures that every unit produced reflects the latest and most accurate version of the design.