Why Book Orders When Production Can't Keep Up
Sales and manufacturing continually struggle to keep up with each other. When bookings exceed manufacturing’s ability to produce, backlog grows and capacity must be added. Typically, with an eye toward the future, capacity is added in larger chunks than immediate needs require. The result is excess capacity, which salesis expected to fill. This seesaw imbalance between sales and manufacturing fuels growth.
So, we were very concerned recently when a sales manager told us matter-of-factly that he was being careful not to book too much business because he didn't think the factory could keep up.
Those charged with selling should sell. Their primary objective should be to increase market share. If the market is growing and sales people or sales management try to meter bookings to a level comfortable for manufacturing, the result may be loss of market share.
It is general management’s responsibility to provide the resources to keep a company growing, not sales management’s. But, in most companies, general management is reluctant to add manufacturing capacity until the problem becomes so acute that it starts to severely limit sales.
Production problems are almost always problems of scale. They are quickly solved by adding equipment or workers. However, it takes a lot more time and effort to rebuild sales volume, especially if you have to pry it back from competitors.
So, why continue to book orders if production can’t keep up?
Because if you don’t, your competitors will, and you’ll lose market share.
So, if you’re charged with the responsibility of selling, you should never try to match the pace of that selling to the factory’s ability to produce. Instead, “Blow the factory out of the water!” Remember, no salesperson was ever fired for bringing in too much business.
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