Explain the relation between sales and production?
There needs to be suitable coordination between sales and production activities in an organization. Gone are the days when production started only after orders were solicited. In today’s era, production happens in anticipation of future sales. Coordination is crucial both in the context of planning as well as operations.
Joint consultation is required in planning for the products to be manufactured, the quantity of products to be manufactured, the production schedule, inventories etc. There can be errors committed both by the sales as well as by the production team. The sales department may accept rush orders or there may be an error in the sales estimate that might require reshuffling of production schedules.
Similarly the production department may create output that does not conform to planned quantities because of labor difficulties, shortages in raw materials etc. Moreover it is often found that the two departments may work against the interests of each other and this can make coordination difficult.
It needs to be understood that the concerns of the sales and production team are quite different. While the production team are concerned with matters like product line standardization and simplification, sales executives are concerned with having some product for everybody. The cooperation of the sales department helps the production department.
Sales estimates are required for efficient planning of production schedules and the market knowledge possessed by the sales department are crucial for production executives for making effective utilization of plant resources.
It is the sales executives who keep production executives informed of the changes in market demand for different products and this has been found to increase the chances of attaining optimum levels of production. It is not just that the sales team aids the production department.
The production team provides selling tools in the form of detailed technical information on products and assists sales people with product information. When the promotional materials are designed, the sales people take help of the production team to include certain specific technical details regarding the products to be sold.
