Automated tape laying (ATL) is an advanced composite manufacturing technique which is used extensively for high performance industries such as aerospace and automotive. The aerospace industry, with the growing use of composites and ATL, demands greater complexity, reduced waste and stricter control over product quality and geometric tolerances. ATL as a process, even though highly automated, is susceptible to manufacturing defects which are not only detrimental to the structural performance, but also, due to a lack of robust monitoring and control system, lead to productivity loss. In-process defect monitoring is the most relevant research topic for process development, considering that defect detection and rectification are the main process bottlenecks. This thesis provides an industry ready, engineering solution-based, holistic defect monitoring and control concept for thermoplastic in-situ consolidated ATL. The frequency of incidence of defects and the effect of defects concerning severity to the structure serve as defect selection criteria. A complete monitoring cycle consisting of defect identification, detection, treatment and control based on analysis of the process behavior is established. The monitoring concept builds upon easy integration, handling and accuracy and effectiveness of defect detection for real manufacturing process. Implementation of such a tool is bound to increase productivity, reliability and material and cost savings. In the context of the research work elaborated in this dissertation, infrared thermography has been found to be capable of detecting foreign objects and debris as small as 2.5 mm. Local temperature anomaly and thereby, bonding defects can be detected as well. Profilometry has been proven to be capable of detecting gaps and overlaps having a size of 0.2 mm and above. Fiber Bragg Grating (FBG) sensors are utilized for monitoring residual strain at both lamina and laminate level. A novel defect management technique for selective defect rectification, prediction and prevention is demonstrated. For the given monitoring concept, residual strain, substrate temperature and compaction force/width can be controlled to alleviate shape distortion, bond inhomogeneity and gaps and overlaps (shape compliance) respectively. The concept has been designed with highest regards to modularity and flexibility. The industrial applications for such a concept are immense. The gap and overlap management techniques are especially useful for variable angle tow/variable stiffness panels and near net shape laminates. Shape conformity will help in generating advanced, lightweight and complex structures. Defect management on the fly will improve manufacturing rates, bringing the process speed closer to traditionally metal manufactured components. The design flexibility offered by width control and shape conformity for thermoplastics will help the process in accommodating components having a vast range of size and design complexity. In summary, a monitoring concept is presented that leads to greater design freedom, quality and reliability enhancement, weight and cost savings and productivity rise.