Control Panel Manufacturer or Panel Shop?

The Wraptor wire cutting machine is an example of the investment a control panel manufacturer makes in specialized machinery

When evaluating control panel fabricators as possible manufacturing partners for industrial control panels, it is important to note that a fabricator can fall into one of two distinct categories: 1) Control panel manufacturer or 2) Panel shop.

There are key differences between the two categories related to the type of control panel orders the business is set up to service. This blog post examines these important distinctions.

The Key Differences Between a Control Panel Manufacturer and a Panel Shop

Industrial control panel manufacturers and panel shops primarily differ in the volume of control panels the company produces and in the supporting infrastructure in place to ensure quality for every panel. A control panel manufacturer typically produces high-volume orders of OEM panels regularly and has the required facilities, software, and processes to scale up to those volumes. A panel shop typically focuses on building smaller orders of unique custom control panels so the processes, facilities, and resources are set up accordingly. The specific differences between control panel manufacturers and panel shops can be broken down into the following 8 areas:

  1. Software
  2. Quality and consistency
  3. Company culture
  4. Efficiency
  5. Processes
  6. Facility
  7. Delivery
  8. Training

The sections below describe the differences in these 8 areas.

Software

Most control panel shops use generic off-the-shelf manufacturing software designed for custom panel builders. The software is effective for managing low-volume panel orders, but is not an integrated part of the panel-building process and is not designed to be scalable for high-volume production.

Manufacturing panels in high volume requires a control panel manufacturer to implement top-tier, customized manufacturing ERP software.

An example of ERP software customized for control panel manufacturing

This software is an integrated part of the manufacturing process and ensures best practices are followed. It is designed to automate and streamline back-office tasks, increase productivity, and optimize job functions to enable scalability for large panel orders.

Quality/Consistency

Most panel shops depend on employees with many years of experience to ensure panel quality. Staff expertise in custom panel building enables quality to be consistent across low-volume panel orders. Any quality issues are usually addressed as they occur, with no formal quality management program in place. Because employee knowledge is the basis for quality and consistency, documentation on the panel building process is usually not formally maintained.

Panel shops typically rely on experienced employees to ensure quality and consistency across low-volume panel orders. Control panel manufacturers employ a formal quality management system to produce high-volume panel orders with quality and consistency.

While this method of quality management often works well for panel shops, it is not feasible for control panel manufacturers. With typical order sizes of 500 or more panels, to meet customer quality standards manufacturers must have a proactive approach to quality control, a formal quality management system (QMS), and proven consistency across high-volume orders.

Home screen of an online Quality Management System (QMS) for control panel manufacturing

Control panel manufacturers ensure consistency by using workflows documented in the QMS. The same workflow is used to build each panel. Documentation on workflows and quality management is revision-controlled and maintained in the QMS.

Company Culture

Since most panel shops are small businesses with every aspect developed through the hard work of the owner, the company culture can reflect an attitude of “this is the way it has always been done” and a resistance to change.

Surviving and succeeding as a control panel manufacturer requires a company culture of continuous improvement to meet the requirements of the (typically larger) companies that outsource panel manufacturing work. The entire staff must be willing to proactively make changes that will optimize the manufacturing process by maximizing efficiency, reducing costs, and ensuring quality and consistency.

Example of entire staff proactively working together to significantly increase production capacity

Processes

Panel shops typically build a relatively low volume of custom control panels monthly. Accordingly, the processes are designed for a small number of units. If the shop handles both custom and low-volume OEM orders, the same process is often used to build both types of panels.

Typical process for control panel shops

In contrast, control panel manufacturers produce a large number of panels per month. For this reason, processes are very important and must be scalable for manufacturing in volume. If the manufacturer builds both custom and OEM control panels, the processes are typically separate for custom and OEM panels to allow maximum efficiency for high-volume builds while enabling attention to the unique details of custom panels.

Typical process if a control panel manufacturer builds both OEM and custom panels

Efficiency

Most panel shops are small businesses that developed their panel-building process over many years and made improvements based on experience. For this reason, there is often hesitation about changing the process — a “we’ve always done it this way” mindset found in many small businesses. Because the focus is typically on small orders of custom panels (and likely also due to the mindset), Lean manufacturing principles to increase efficiency have not been implemented in most panel shops.   

On the other hand, control panel manufacturers must focus on maximizing efficiency to meet customer performance metrics, often implementing Lean manufacturing principles and hiring or training dedicated Lean resources. These staff members are responsible for making changes that increase efficiency.

Facility

The three main differences between a control panel manufacturer and a panel shop relative to the facility are:

  1. The flexibility and scalability of the facility
  2. The organization level of the work stations and inventory
  3. The investment level in machinery and software

Most panel shops got their start building custom control panels; therefore, the facilities typically have set work stations designed for that purpose. The stations can be used for small orders of OEM panels, but cannot be reconfigured or expanded to increase production for high-volume OEM orders.

Because each custom panel job is different and the volume is low, each work station is arranged as it works best for that employee. Uniform organization and efficiency are not the focus. Inventory is usually arranged by the job. Due to the high variability of custom panel jobs, panel shops do not tend to invest heavily in machinery and software designed to increase efficiency and optimize production.

Panel shops typically have set work stations that are designed for building custom panels but cannot be expanded or reconfigured. Control panel manufacturors use assembly cells with stations on wheels, which allows the manufacturing floor to be rapidly reconfigured and scaled to meet production demand.

Control panel manufacturing facilities are designed to be reconfigurable as well as scalable to meet changing production needs. They typically have cell-based assembly, with stations on wheels for easy reconfiguration.

Because the facilities are designed for volume manufacturing, organization and efficiency are priorities in the production area as well as in inventory storage and retrieval. Control panel manufacturers often invest in high-end software and machinery that increases efficiency, reduces cost, and improves quality and consistency.

Delivery

Panel shops frequently track orders through a manual process, with order status updates provided through manual BOM lookup. On-time delivery can often be guaranteed for low-volume panel orders, but on-time performance history is usually not available for large panel orders.

If any parts listed on the BOM are unavailable, panel shops typically require customers to select alternate parts.

For control panel manufacturers, order tracking is usually handled by the manufacturing ERP software through automated BOM tracking. On-time delivery performance is tracked as one of the Key Performance Indicators (KPI) in the quality control process.

In the case of unavailable parts, manufacturers with engineering expertise on staff can often propose part substitutions by researching parts that match the original part in form, fit, and function.

Training

Since panel shops normally focus on building custom control panels that are unique, each employee may perform a task differently in the way that works best for them. Knowledge of the panel-building process is maintained within the veteran staff members and passed along to new employees via informal on-the-job training. The pace of training must be based on the availability of experienced employees; therefore, getting new employees up to speed can be challenging and slow when the shop is busy.

At panel shops, new workers are usually trained on the job by veteran employees. New employees at control panel manufacturing facilities complete their job training through an online Learning Management System (LMS).

For control panel manufacturers, maintaining efficiency across orders of 500 or more identical panels requires that each employee perform each task in the process in the same way. Documented workflows for each task are contained in the quality management system, and all employees are trained to perform the task according to the workflows. Employee training is completed through an online Learning Management System (housed on the QMS) which is accessible to all staff members. Onboarding can be completed quickly since the training is not dependent on the availability of other employees.

Panel Manufacturer or Panel Shop Chart

Check out this summary chart to review the crucial differences between a control panel manufacturer and a panel shop.

Conclusion

When evaluating fabricators as possible control panel manufacturing partners, it is important to identify whether the company is a control panel manufacturer or a panel shop. The two types of fabricators differ in eight crucial areas stemming from the type of panel orders the business is set up to service. Understanding these differences can help determine which category of fabricator best fits your manufacturing needs.

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