The Synchronization of Sales and Production

Abstract

Since the early days of the United States, the fundamental economic factors governing American business, and business methods, have undergone a marked change. The era of exploitation of natural resources in a new country is past and the emphasis has been shifted from production to marketing and the means for effecting the coordination of the activities in these two important departments.

Our prosperity, both agricultural and industrial, depends to a large extent upon the ability to export surplus production. Severe competition has developed from both domestic and foreign products and the rehabilitation of European industry will only serve to make the situation more acute. The persistence of a hand-to-mouth buying policy, and the development of the style factor, are other examples of the new economic era.

The American executive has realized that the methods of yesterday are unsuited to the problems of today, with the result that a new technique is being developed which visualizes business as a coordinated and well-balanced whole. In the majority of cases, this coordination revolves about some kind of a budget. Operating schedules are based upon forecasts prepared by the sales department, which in turn presumably has made its plans upon careful market studies. It is thus possible to prepare a financial budget well in advance of operations and to estimate the effectiveness of the proposed program.

The author gives some specific illustrations of the new method as applied in an organization producing a variety of products in scattered plants.