Production Control – A Practical Guide
Manufacturing is a diverse world with countless product types and levels of complexity. Many products are made simply in a commodified environment where OEM equipment has reached such productivity levels that output is measured in kilograms, linear meters, or some other volumetric measure rather than units.
Even within industries, assemblies, subassemblies, and other components and raw materials are produced in a wide range of manufacturing methods. All manufacturing has in common that there must be some form of production control to keep things on track.
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What is Production Control?
Production control is the process within manufacturing whereby the production operation is monitored, and actions to control processes are undertaken. This may include demand planning, capacity planning, scheduling, work center assignment, inventory control, costing, and shop floor monitoring, and many more.
These different functional areas are managed under a single operations management team to optimize production for efficiency, control cost, and guarantee material availability required to meet the delivery.
Why is Production Control needed in SMEs?
Historically, manufacturing companies managed production manually using paper schedules, calculations, and verbal instructions. Eventually, this gave way to spreadsheets and then to on-premises software designed to help specific functional areas complete their tasks more efficiently.
These systems grew out of the growing complexity of manufacturing at scale in high volumes. Small and medium enterprises (SMEs) could utilize equipment to rapidly produce goods. But the increasing speed of equipment meant that software was required to complete tasks that simple calculations and spreadsheets could not effectively control.
SMEs have traditionally been at a disadvantage to larger competitors. With old on-premises software or archaic spreadsheet-based analysis, SMEs could not deploy resources for proper production control leading to waste and increased cost.
But to a new or scaling SME, production control is essential. It can drive process improvement, lower costs, and improve delivery. And today, SMEs can take advantage of production control systems that combine the siloed legacy systems their larger competitors struggled with for many years. Because they can leverage a unified software platform for production control, manufacturers can avoid the same mistakes and produce on par with larger companies because of the system.
Production system type determines Production Control type
Because manufacturing product type and complexity range broadly, the type of production system will depend on the product made. This system, in turn, will help determine the type of production control system to deploy. Production system types include:
- Process Manufacturing – Process manufacturing uses a recipe or a formula to produce a finished good. It often requires steps such as thermal interaction, refining, purifying, or rendering of a product through successive steps to get a final product. An example of this would be processed food such as orange juice that must be rendered to its final form for consumption.
- Discrete Manufacturing – The result of discrete manufacturing is a distinct item. Finished goods are often complex assemblies with parts such as nuts and bolts. They may also have subassemblies such as electrical harnesses. Unlike process manufacturing, discrete manufacturing is done in a staggered assembly line product as it cannot be done continuously. An example of discrete manufacturing would be appliances such as toaster ovens or microwaves.
- Project Manufacturing – Project manufacturing features a high degree of customization. Only one buyer may use each finished good with no additional units made. For example, a company with a legacy boiler system of a vintage age may require a new unit uniquely sized for the customer’s space. Many CNC machining companies use project manufacturing.
- Mass production – Mass production is like process manufacturing in that speed and simplicity of manufacture may create commodified products. But it is different because it does not require formula or recipe. It makes a very high volume of goods and carries few finished SKUs. An example would be wire clothing hangers.
- Batch Production – In batch production, finished goods are produced in batches. Products flow from one process area to another in batches until the final pieces are finished as a group. This method is often used in food products such as candy and bread. It can also be used in other industries such as electronics and tools. One benefit of batch production is that setup methods can be changed at points in the production process to produce different iterations of the same product.
Read more about discrete and process manufacturing.
Types of Production Control systems
Once a manufacturer chooses a production system, it can proceed to the production control type it requires. SMEs can then use this control system to select software to manage their unique production process operations. Types of production control systems include:
- Make to Stock (MTS) – MTS production control systems rely upon manufacturing goods readily in stock and available. Production and demand are predictable, and brand and market share depend on consumers having access to the brand. MTS is common in mass production and process production systems. More about Make to Stock.
- Make to Order (MTO) – In MTO, small lot or single-unit production is common. They often include custom-made products and are only produced when the customer orders them. MTO covers a wide range of product types and consists of CNC machining manufacturers and OEM production equipment.
- Assemble to Order (ATO) – ATO production consists of items where the function is the same, but the customer may request different iterations or configurations. One example of this would be laptop manufacturing, where a laptop computer may be of a specific design offered by the producer. Still, one buyer may request a 256 GB hard drive for the units ordered, while another requests a 512 GB hard drive.
- Engineer to Order (ETO) – ETO production is essentially commissioned manufacturing. Each unit is produced as per the customer’s design and specifications. There is also a complex design and engineering change approval procedure required. One example of an ETO would be an exhaust vent fan used in an underwater tunnel. As no other tunnel will ever be dug to the same parameters, the fans must be sized and manufactured for the specific project. More about Engineer to Order.
Steps in deploying a Production Control system
As an SME, chances are your company is small, and it may be a startup, or it may be transitioning and scaling from a startup to a larger entity. The first steps, such as the type of production system and the type of production control system required, are primarily determined by the kind of product you make, the market for the product, and what steps are needed to produce it.
It is also not unusual for SMEs to operate with a different production system in their smaller stages and transition to another system later. For example, many SMEs with tight resource access may run in batch production. Their direct competitor may have the resources via Capex to produce in mass production, ATO, or MTO.
There are a few critical steps to make sure to choose the proper production control for your company:
- Demand – As an SME, it is critical to understand the need for products within your industry. That demand will guide you to the right system. It may dictate that you start with batch production and plan to move to a different production control method when technology, automation, or access to capital changes.
- Develop a Process Map – This may sound obvious, but many SMEs have never mapped their core processes. They may have grown from a small shop to a larger entity without ever sitting down and mapping out the processes. Mapping processes help companies understand the resources they will need in terms of labor, capital, equipment, and vendor supply.
- Optimize Resources – As an SME, some options may not be viable initially. This includes the opportunity for automation, equipment purchase, inventory and holding, and more. Instead of beginning with the hoped-for state of manufacturing where excess labor and larger space are available, seek to optimize what resources there are that will deliver the product at the lowest cost. Scaling later will cause a rethink of both process mapping and resource optimization but setting realistic expectations can help make the most out of resources on hand for an SME.
- Audit the Production Control System – Your planning, scheduling, purchasing, and delivery must work flawlessly to meet and exceed customer expectations. But growth in SMEs is often high. Considerable growth causes more space, new equipment, and more automation. Processes will change as these things occur, and it is essential to audit the production control process to ensure you are still using the optimal production system.
- Change if Needed – A small enterprise can become a medium enterprise quickly. And many medium enterprises can scale to become large companies. As the economy of scale becomes apparent, many changes to the production control system will be required. The ability to discern the “when” of these changes can help move the enterprise to the next level.
Choosing software for Production Control
Manufacturing companies for many years relied upon disparate software and siloed systems to create an ad hoc production control system. This was not only inefficient, but it was also costly. On the other hand, SMEs had a disadvantage because they could not afford even the disparate software, in many cases relegating them to manual production control.
Today, companies produce best-in-class software that can be operated at the enterprise level. These platforms are also modular and cloud-based, opening the door for SMEs to participate on par with larger competitors in the type of production control system used.
These platforms can also tie directly into existing software such as MRP and ERP systems via API. This links and automates many production control systems such as purchasing, inventory control, demand, supply planning, scheduling, shop floor control, and more. The above five steps are easier to manage by using software, and the choice of a production control system – or when to change it – is easy to detect.