4 key takeaways on production controlling
Bart Tourné is a finance professional with over 20 years’ experience in controlling and finance management. In this blog, Bart shares four key priorities for a successful career in production controlling.
By Bart Tourné
1. Visit the shop floor regularly
This is where the magic happens and it’s the absolute number one priority. As a plant controller, it’s important to visit the shop floor at least once a week. It’s the best way to make the connection between your figures and what’s actually happening.
2. Determine the standard cost
The standard cost is essential for building the industrial P&L, so one of the responsibilities of an industrial controller is to define it. Here’s what you need:
On the one hand, the variable costs, which consist of material and labour costs. Material costs are defined by the price per material and the Bill of Materials, including wastage rates, for the various stages of the production process. Direct labour costs are mainly determined by the speed of the production line, the number of people on the line, the efficiency of the production line and the set-up time between changeovers.
On the other hand, you also need to take fixed costs into account (= production overhead).
3. Measure the (in)efficiency of the production facility
Once the standard cost has been established, we can measure the (in)efficiency of the production unit by calculating the variances relative to the standard cost.
For materials, we have: Volume, Mix, BOM change, Yield and Price variances; and for direct labour, the Volume, Mix, Productivity and Hourly Wage variances.
4. Become a business partner for production
When you work in a manufacturing company, everything revolves around people. Make sure you use ‘manufacturing language’ whilst applying your financial knowledge. Do not use financial language whilst relying on manufacturing knowledge.
About Bart Tourné
Bart began his career 18 years ago at JDE PEET’s, where he had the opportunity to progress from production controller at the factory to financial manager in the B2B sales unit. In this role, Bart had the opportunity to take on various positions, such as operations manager and general manager, on an interim basis. Bart is also available to deliver training on these topics.
Bart Tourné
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