Even the most straightforward manufacturing setup has a large number of moving parts. From sourcing raw materials to monitoring overall performance, a company’s production can get messy if not properly supervised.
Production control is the formal system of managing the materials and processes used in manufacturing goods for sale.
The function takes a comprehensive view of the entire production cycle, ensuring that all products meet company standards and are delivered on time.
What is production control?
Production control refers to managing, monitoring, and optimizing a company’s manufacturing process.
The primary goal of production control is to deliver quality goods on time and within the allotted budget.
Production control looks at all factors of operations management, including workforce, material supplies, facilities, and current production cycles. Should any changes be made, the team decides on the best corrective action to get production operations back to an ideal state.
Production control runs in tandem with other similar activities, such as quality control and stock control, with the shared goal of generating goods or other outputs ready for sale.
Production control areas of responsibility
The main purpose of production control is to guarantee the quality and timely delivery of specific products. There are several areas of responsibility to keep in mind:
- Manufacturing activities
- Warehouse management systems
- Supply chain management
- Material requirements and procurement
- Equipment and tools availability
- Material and product movement
- Material or equipment alternatives
- Inventory planning at each stage
- Manpower availability (full-time and part-time human resources)
Production control keeps tabs on all these factors and how they work together, finding any opportunities for improvement.
Benefits of production control
Production control is a necessary function for any manufacturer or producer. After initial planning and implementation are done, production control provides a last step to monitor material usage, measure performance, and make necessary adjustments.
By keeping tabs on these factors, production control can provide the following benefits:
Ensures all necessary resources are available
By continuously monitoring a company’s manufacturing process, production control works to improve the purchasing schedule. The practice ensures all necessary resources are available at the time and in the quantity needed in the production cycle, and flow seamlessly from raw material to finished product.
Improves labor and resource utilization
When production management is going according to schedule and orders are delivered on time, the odds of needing any rush orders or overtime are reduced. This helps prevent burnout and guards against any additional unexpected costs from the production line.
In time, a company can keep lower levels of on-hand inventory and adapt to any market changes.
Companies can further optimize their production with solutions like QuickBooks Enterprise, which can track costs from raw materials to finished goods.
Achieves optimal inventory control
Observing how inventory moves through different stages informs how to make any necessary adjustments to the manufacturing process. When a company’s manufacturing has efficient production capacity, it helps achieve optimal quantity levels, reduces inventory carrying costs, and frees up resources for other business areas.
Guarantees goods according to production schedule
A well-run manufacturing operation means customers will receive their orders as promised. Production control prioritizes the optimal production paths and addresses any potential bottlenecks, for the desired result of on-time order fulfillment and customer satisfaction.
Four types of production control
The best production control system depends on the manufacturer’s business model. These are the four main manufacturing systems that will dictate the best type of production control to use:
Make to stock (MTS)
Made-to-stock production control is focused on manufacturing goods that are kept in stock and readily available for purchase. In these cases, production is done in anticipation of market demand.
MTS production cycles are consistent and generally low cost, as the goods are produced in bulk and are more uniform in nature. Examples of MTS products are mass-made ones, such as household appliances and cars.
Make to order (MTO)
With make-to-order systems, products are manufactured based on a customer’s specifications. Production only begins after an order is placed and is typically run in single-unit or smaller batches.
For this reason, MTO inventory management encompasses a wide range of materials, equipment, and product varieties. MTO production results in more high-value or hard-to-find items, such as airplane components or custom parts.
Assemble to order (ATO)
Assemble-to-order (or configure-to-order) systems create more or less standard products but allow for small variations based on customer specifications. Most of the product parts are already manufactured ahead of time.
But the finished goods and assembly are done only after a customer order has been placed. An example of this is with custom computers or laptops, where customers can select their own specifications.
Engineer to order (ETO)
Engineer-to-order products are entirely manufactured according to a customer’s unique requirements. This entails a custom production process that involves engineering to develop and refine the final product design. Examples of ETO products are ergonomic chairs or specialty mattresses.
Best practices for effective production control
Production control covers the entire process of manufacturing, which involves several teams and operational areas. To keep everything running smoothly, the following are best practices to keep in mind when implementing process control.
Establish specific goals and structure
A production planning department typically runs the most successful production control efforts. By dedicating a team to focus specifically on managing production activities, it’s easier to keep everyone aligned and working toward the same goals.
Continuously maintain and monitor data
To better improve a company’s output, it’s necessary to have detailed information on all areas of production. Here is a list to get started:
- Knowledge of the finished product and its different stages of production
- Production costs, steps, and the time required for each production stage
- Raw materials, necessary quantities, available suppliers, and order lead times
- Details of the machines, equipment, and other tools involved in production
- Information and capacity of the labor involved in producing the specific product
- Any contingency plans or alternatives if a material or machine part isn’t available
With all this data collected, it becomes easier to analyze each area individually and pinpoint the impact of any changes.
Aim to develop standardized, repeatable systems
Standardized systems are not only easier to deploy and maintain, they often reduce the problems that frequently arise within manufacturing. Once there is a standard way of operating, consistent quality can be achieved as it becomes second nature within teams.
With standardization, production can also create economies of scale by using the same tools, resulting in increased profitability.
Final thoughts
Production control is a necessary step for the success of any manufacturing business. It ensures that all the planning to produce goods is efficiently applied, and then further monitored and improved to optimize operations.
QuickBooks Enterprise helps make your manufacturing business more efficient than ever, with tracking and automations to keep costs down and profits up.
