Any responsible automation integration specialist understands that once the scoping, planning, designing, and pricing stages have met mutual agreement, it is time to make the formal project proposal. Sometimes this is a standard project contract, sometimes it is called a ‘Scope of Work,’ but it is always a signed agreement outlining the boundaries of what to expect during the full integration process. Specifications, production targets, components, training, and scheduling get defined as much as possible to keep project responsibilities inside the bounds of the budget. Stage Completion Requirements get set to practical minimums and the Factory Acceptance Testing standards are agreed upon.
In an ideal project, there should be no changes in the machine design after the signed proposal. An automation integration can take months or years to complete, minor revisions to the design can drastically bloat the scope and scheduling of the project. Project contracts will include provisions for changes, a smart integrator sets aside 10-15% of the budget to accommodate minor changes from unforeseen issues and the risks of custom projects ranging from engineering and testing taking longer than anticipated to sourcing components that are pushing the timeline out, but excessive changes come at an additional cost. An inability to settle on prearranged details often leads to negative partnerships regardless of industry.
Reasons it is Worth Changing the Design After the Signed Proposal
With penalties, risks, and insufficiencies associated with changing the design after the proposal, a responsible machine integrator will steer you away from making changes under almost all circumstances. There are rare circumstances where you must make changes, even if it means incurring longer lead times, fees, or changes to the contract.
Disclosure Failures
In an ideal partnership with your integrator, a customer should focus on setting the targets of the automated machine while the integrator works out the calculations, construction, and components needed to meet or exceed those targets in the machine design. The planning phase also makes the most sense for making specific customer requests for the design and mounting. For instance, maybe a parts machine could be faster and more efficient loading your raw materials from the right side, but as a customer you have exceptional circumstances that mean you can only load raw materials from the left side. Maybe there are vendors that carry cheaper, generic fittings for your machine, but as a customer you have a signed contract that prevents you from purchasing them. Failure to disclose these specific requirements before the design is approved can result in a perfect working machine that cannot be used on your production floor.
Miscalculations
When working with custom engineering and software, design is subjective. A machine designer can misunderstand the requests of the customer. A measurement recorded and displayed early in the design process that makes construction of the machine impossible can make it past both the customer and the project team. A designer conceptualizes the machine and then during construction realizes the machine needs a significant change to meet the throughput requirements of the customer. These events are rare, but they do happen. Overcoming a significant design flaw is part of the risk associated with creating custom machinery. An experienced automation integrator knows the costs associated with overcoming this risk do not compare to the rewards of getting the machine right. It is not an option to prototype a machine that will not meet the minimum process targets or will not work (an ideal integrator will provide previews of the prototype in Stage 1 with three dimensional computer aided design, or 3D CAD. This will give customers the ability to physically see the practical workings and point out any glaring issues in the early stages).
Sudden Change in Sustained Business Position
When an industrial machine integration can take months or years, consistent vision is key. Ideally, the integration of your automated industrial machine is the fulcrum of your plan for growth. But luck, windfalls, fortune, and opportunity can have a surprise sustained effect on your business and reframe the purpose of your machine. Maybe demand spiked for a different product than the one produced by your machine, and now you urgently need a machine that also makes this other product. Maybe your preferred raw material suppliers have gone out of business and the new supplier will not feed raw materials for your part manufacturing in the same way. Maybe demand for your product changed in a way where the initial targets no longer support the minimums to meet your higher demand. Make strong efforts to determine whether it is worth spinning the adaptations whole cloth into a new project. If there is a significant mismatch that can only be solved by a change in the design, you have a responsibility to your business to pursue those changes.
Understand Your Options for Change Orders
There’s no such thing as a change order that doesn’t cost extra time, money, or effort, and that inevitability can sometimes paralyze customers with indecision with how to proceed. An effective change order thrives on decisiveness, here are some tips on how to handle a change order:
Structure
Decide early on the structure of the costs based on size and risk. Depending on the investment of the project it might make more sense to lean into lump sum payments, time and materials, or unit price comparisons. Normally a good scope of work will have the generalities listed here, but it will be helpful to identify in what ways the extra money and lead times will affect the new timetables and in what stages they will be released.
Incentives
What are your options for changing the current timetables? Are you at the mercy of your supply line, or can spending more money speed up the completion of the change order? Will allowing for more time save money or cost you the opportunities of your finished machine? Your integrator should be able to provide you with some ways to prioritize speed with increased costs if possible.
Documentation
The documentation of a change order needs to be explicit, ideally it will be like a miniature scope of work contract only for the required change. Outlining the areas of the original design that need change will help mitigate scope bloat, keep costs in scope, and define the timelines of the change. Documenting whether the new costs will come from which parts or which labor will keep Signed agreements by both parties will define parameters of the change within reason.
Cancelling the project
Sometimes the change can be so monumental, costly, or time consuming that it may no longer be practical to continue the project. Maybe the money isn’t there, maybe the change would require a top down redesign of the whole project, maybe the changes will prolong the development by years. It’s difficult to consider dropping a project after time, money, and energy has been invested, but it’s better than wasting years and hundreds of thousands of dollars on something that will never support your needs.
Ways to Address Late Changes to the Design Constructively:
Accept that the changes need to be made
Once discussions have reached a point where both parties have fully exhausted all the options to go forward without making changes, agree that the decision to alter the design is final. Agree that without a solution that allows the machine to integrate without changing the design, 100% of everyone’s energy should be directed toward agreeing on a redesign that still pursues the targets in the original proposal but folds in the necessary changes. Discussions about fault can direct energy toward safeguarding the additional changes but save a protracted evaluation for a post-mortem.
Accept that costs come with altering the design
A responsible integration project manager will have specifics in the contract detailing the additional fees and rates associated with significant changes to the machine design after the agreement. By the time the prototyping phase starts, parts have been ordered, project managers have assigned multiple team members to different disciplines required to make your machine, shifts have been budgeted, models have been built, and initial construction has been started based on the proposed plans. All these costs were built into the original quote. Altering the design requires redesign, new parts, additional hours from project teams, and modifications to the prototype. Doing more work costs more. You would not accept any less for your own business.
Accept that new timetables come with altering the design
The original proposal will contain timelines in gated stages for the creation and integration of your custom machine based on a research driven automation assessment. New designs require new assessments, new models, staff reassignments, and reordering parts. Work with your automation integrator to assign new benchmarks.
Accept that amendments to the proposal are a given
Changing custom machine design has downstream effects on every expectation of the machine. A different design might require dramatically different work to meet the process targets and some changes may not be practical to the old targets. Know that making late design changes will come with another round of review, compromise, and agreement.
At DEVELOP LLC, we know exactly what to do to integrate your automated industrial solution. We invite communication at every step of the process, leverage knowledge of the specific qualities of your business into the project design, and author mutually agreed upon proposals that can be accomplished without change. We make every effort to maintain the proposal, but we know how to make changes that preserve the integrity of a project with minimal increases in cost and time. Tell us more about your project, schedule a virtual meeting, or call (262)-622-6104 to learn how you can improve your project integrity with responsible automated integration.
Authors:
Sean McKittrick and Matt Moseman