# Change Order Management for Custom Equipment Builders > Source: https://netray.co/resources/change-order-management-for-custom-equipment-builders > Publisher: Netray (netray.co), AI and integration engineering for ERP and manufacturing systems. > Section: Knowledge Base ## Short answer How custom equipment builders catch scope creep, price change orders, and track revised budgets so customer-driven changes stop eroding project margin. ## Category erp-general ## Content **Intro:** Change order management for custom equipment builders means capturing every customer-driven change to scope, pricing it with stated rates, getting written approval before work starts, and carrying the revised budget next to the original baseline. Most lost margin on ETO projects is not a bad estimate. It is dozens of small, verbal changes that were absorbed because nobody wanted to slow the job or irritate the customer. **Sections:** #### Where Unpriced Changes Come From **Body:** Changes enter through the side door. A customer engineer asks in a design review for a second reject chute. Quality adds a vision check after seeing the prototype. The plant revises the safety standard from its internal rules after the quote. A product variant appears that was not in the spec. Each is small, so the project manager says yes. Add them up across a project and they become hundreds of engineering and build hours. The fix is not saying no, it is making the change visible and priced so the customer can decide knowingly. **Bullets:** - Design review requests made verbally in meetings - New product variants after PO - Customer standards that differ from the quoted spec - Late or incorrect customer-supplied CAD, samples, and data #### A Practical Change Order Workflow **Body:** Keep the workflow short enough that people use it. First, a change request log where anyone can record a request with date, source, and description. Second, a quick impact estimate by discipline: engineering hours, parts, build hours, and schedule days. Third, a written change order issued to the customer at the stated rates, signed before the work is released. Fourth, the approved amount is added to the project budget as a revision, not overwritten. Fifth, work already started under verbal authorization is flagged and priced in the same way, with an agreed cutoff. A weekly review of open requests by the project manager catches the ones that slipped. #### What to Capture in the ERP **Body:** In your ERP, the original contract value and budget should remain as the baseline, with approved change orders added as separate budget lines or revisions. Time and cost should be coded to the change order so you can see whether the pricing was right. Inside Infor SyteLine, Epicor Kinetic, or NetSuite, this is usually done with additional project tasks or change order records attached to the project. If your system overwrites the budget, keep a separate log, because you need the original to learn where your estimating is weak. #### Handling Customer Pushback **Body:** Pushback is smaller when the quote contained an assumptions and exclusions section and listed hourly rates, because the change order cites the assumption that failed. Show the request, the date, the estimate basis, and the schedule impact. Some changes are good will absorbed deliberately, and that is fine if it is a decision with a name on it, recorded as a concession. Track those too, since the total concession per customer tells you what the relationship really costs. #### Using AI to Spot Unlogged Changes **Body:** A private AI layer can read meeting notes, emails in a project mailbox, and revised drawings, then flag statements that look like scope changes with no matching change request. It can compare a revised customer specification to the quoted revision and list differences. It cannot decide to charge the customer or negotiate. It surfaces candidates for the project manager and stays read-only on the ERP. If your projects are few and the project manager already knows every conversation, a simple log is plenty. **Cta:** Netray can compare revised specs and project communications against your quoted scope to flag likely unpriced changes, all running on infrastructure you control. **Faq:** #### How do you price a change order on a custom machine? **Answer:** Estimate the added engineering, controls, parts, and build hours at the stated rates, add procurement markup and schedule impact, and include the cost of rework on parts already built. State the basis so the customer can see how the price was built. Do this before work starts. #### What if the customer refuses to pay for a change? **Answer:** Refer to the assumptions and the specification revision in the contract. If the change was truly outside scope, offer options: drop the change, accept a reduced version, or schedule it as a later phase. Absorbing it should be a documented decision, not a default. #### Should change orders affect the delivery date? **Answer:** Yes, each change order should state its schedule impact, even if zero. Engineering changes after design freeze often delay purchased parts and testing. A recorded schedule effect protects you from late-delivery claims caused by the customer. ## Related Slugs - infor-ln-engineering-change-management - engineer-to-order-erp-challenges - syteline-project-profitability-reporting - syteline-project-billing-milestone-setup ## Search terms change order management custom equipment, change orders machine builder, scope creep custom machinery, ETO change order process, pricing change orders capital equipment, engineering change order customer billing --- Talk to an engineer: https://netray.co/contact?intent=erp_ai | Machine catalog: https://netray.co/agent/catalog.json