Supply Vs Demand: A Foundational Truth


This is such a simple concept but it’s amazing how much we get into verbal contests with Sales over it. The situation is we have six of our product on hand and the customer calls and wants ten of them. Ten of us, from all departments in the company, will sit around the table in the daily production meeting and argue whether this is right or wrong. Manufacturing and Materials will moan about the customer not knowing what they want or why couldn’t they forecast it. Sales will bark about needing to take care of the customer or why can’t Manufacturing make what we sell and quit arguing. Every other department in the meeting will take either one these positions depending on whether or not they view demand as predictable or not. The bottom line though is the customer wants ten, we have six, and we’re four short. We either find a way to make it or the customer will go elsewhere for it.