Production control is a system of tools (physical and procedural) that monitor and provide feedback as to meeting the obligations and commitments of the company to the customer.
Success in construction requires control at both the organizational and field operations level. The owner must set the culture; put into place a structure, create policies, implement systems and use procedures to control the end result. Control the outcome and the contractor will earn a good profit and achieve success.
There are basically three groups of financial based project reports. Each set has its own priorities and purposes. Project reports are a function of production reporting with the exception of the balance sheet set (commonly used for cash flow purposes).
Have you ever wondered why technology is so expensive? Why does the technology repairman charge more per hour than what many attorneys charge? Why does it feel like you get nickeled and dimed to death with technology costs?
The textbook answer defines cost drivers as those factors that determine the overall cost of operations. As an example, in manufacturing the cost drivers may be processing time or number of steps to produce the product. With service, the cost drivers could be the actual ratio of billable to non-billable time.
A part of any information feedback loop is the operating control reports in business. Depending on the nature and financial impact involved, these reports can be daily (Daily Operating Controls or DOC), weekly (Weekly Operating Controls or WOC) and/or monthly (Monthly Operating Controls or MOC) in management reporting. Their value is to inform management of business activity and identify any potential issues that could generate undue financial harm on the business or worse, create an unsafe product or work environment.
The number one tool for marketing is the handshake and a smile. It costs zero to extend the hand and use a few facial muscles. But the value it generates is priceless. Pretty much all business relationships begin this way. The handshake and smile is the most effective marketing tool available at all levels of business.
In every business no matter production or service, there exists a bottleneck. Your job as the owner or manager is to find it and fix the problem. Once this one is found and resolved; move onto the next one. There is always a bottleneck to find and fix. What is important is to find the problem, identify the core issue, and then resolve the bottleneck. This may sound simply, but it takes someone in a position of knowledge and experience to complete this task.
What I learned was that equipment didn’t call in sick, it didn’t back talk me, it never got upset about how much it was paid and it just kept on humming. It was making us money and I didn’t have to deal with personnel issues. Boy, if only all production could be like this. Turn it on and make money.
All the rest of the business issues I write about mean zilch unless you have great production. This is the one area that you as the business owner need to devote your energy towards over any other.
