Why companies introduce production controlling systems?
Specialists (theoretical and practical) have different versions about the importance of production controlling systems and it’s causes.
Some of them consider it “trendy”… No convincing reason. Some of them want to cut manufacturing costs. Better reason, but still not a complete answer.
I propose to start from the main goals of production management: to produce the right quantity of the needed products at the requested quality, while using the optimal input (manufacturing costs), and all this should be ready at the right time.
So, a performant production control system should ensure all the 4 major aspect previously mentioned: quantity, quality, time and costs.
Comparing two companies, the first without any production controlling system and the second with a competitive one, the second company will produce the right quantity of goods, at optimal quality at the right time and right manufacturing costs. The second company will have a major advantage on the market.
Let’s analyze the 4 major goal separately:
a. Producing the right quantity of goods. That means that the company offers the optimal number of product from each model, version or type. Of course, it has to be related to market researches. So, in this way the company can present to the market just enough products of each type, without using resources in excess. Just a banal example the bread You cannot find in the shop when You are hungry is not necessary, but the bread which remains Saturday night on the shelves has no real value on Monday.
b. Producing the goods at the right quality. Again, it has to be in accordance to the market’s demand. Not all the time that means the best quality. For example in a car dealer shop they keep high quality and maybe luxury cars, but the same factory very often sells medium or less equipped versions too.
c. Producing the goods at the right time. The goods have to ready short time before company can sell them. If to early it means that their resources are not used, if to late they cannot sell them anymore.
d. Producing the goods at the right costs. Another major issue. If the same product is made with 10-20 % less resources clearly will be more competitive than others.
So, let’s us recapitulate: generally speaking production controlling is important for a company to produce the right quantity of goods for the market, at the requested quality, using the optimal level of input of resources, and to deliver at the right time. This way they can have a market advantage and the chance to produce an extra profit comparing to competition. And finally this is the way to survive on a very competitive market and possibly becoming market leader.