As a warehouse manager, dealing with an Engineering Change Order (ECO) can be a challenge — but it doesn’t have to be painful. When handled right, ECOs can improve product quality, reduce costs, and keep your warehouse running smoothly. This guide helps you stay ahead of change and keep operations seamless.
What is an ECO (Engineering Change Order)?
An ECO is a formal request to change a product’s design, components, materials, or manufacturing process. Changes like these often come from engineering or production teams — but their impact tends to ripple throughout the supply chain, including the warehouse.
That’s why warehouse teams need to pay close attention to ECOs: they affect more than just production — they also influence inventory, packaging, shipping, and internal workflows.
Why ECOs Matter for Warehouse Operations
When a new ECO is introduced:
- Existing inventory may become obsolete or need to be re-labeled or re-worked.
- Packaging, part numbers, or handling instructions may change — impacting receiving, storage, picking, and shipping.
- Processes and workflows may need adjustment — for example, how items are stored, picked, or assembled before shipment.
If not managed correctly, ECOs can lead to wasted inventory, delays, errors — or even bigger operational disruption.
How to Manage ECOs (Without Chaos)
Here’s a practical approach for warehouse managers to handle ECOs effectively:
1. Stay tightly connected with engineering, procurement, and production teams
Keep communication channels open so you’re always aware of upcoming ECOs — ideally before they’re formally released. Confirm the effective date (aka “cut-in date”) so the warehouse doesn’t accidentally ship obsolete items.
2. Assess impacted inventory and materials
When an ECO arrives, immediately identify which existing stock is affected. Decide whether to re-work, re-label, scrap, or segregate existing items.
3. Update documentation and warehouse systems
Update SKU, part-number, labeling, packaging, and storage instructions. Make sure your Warehouse Management System (WMS) or inventory system reflects the change so all records stay accurate.
4. Adjust workflows — especially receiving, picking, and shipping
Changes could affect how items are received, stored, picked, or shipped. Ensure staff are trained on updated processes. If packaging or handling rules change, reflect that in SOPs.
5. Communicate to the warehouse team — clearly and early
Make sure everyone knows what’s changing, when, and why. Transparency helps avoid confusion and keeps morale high.
6. Phase in changes carefully
If possible, avoid switching everything at once. Implement new items gradually so the warehouse can adapt — while reducing risk of mistakes or mix-ups.
7. Monitor and document the transition
Track what was changed, when, and why. Maintain a log of old vs. new part numbers/versions, and update all relevant records (inventory, shipping, packing, SOPs). This helps keep traceability and avoid future confusion.
The Benefits of Doing ECO Right
By managing ECOs proactively and with good coordination, a warehouse becomes more responsive and resilient. Proper ECO handling helps you:
- Avoid shipping obsolete or incorrect items
- Keep inventory accurate and traceable
- Ensure smooth workflow even when design or material changes occur
- Maintain alignment between production, warehouse, and shipping teams
In short: a good ECO process keeps your warehouse stable — even when change is inevitable.