Every system has a output capacity over time. If a machining system requires twenty minutes to complete a process, it can produce no more than 24 units in an eight hour shift, and that’s if nothing goes wrong. If there are variations in the process that require setup time, the capacity moves down from 24 for each twenty minutes of setup time. If a tool, in the machine, gets dull, that twenty minute process might increase to 23 minutes and reduce the output capacity.

Sales may have no similar constraint, and arrive back at the office with sales orders for 175 units promised by Friday. You do the math. Some of those sales orders will turn into back orders and some of those backorders might turn into canceled orders. What’s the problem?

The problem is that we have a discrepancy between the output capacity of sales and the output capacity of production. It may look like a communication breakdown or even a personality conflict between the sales manager and the production manager.

There are several levers you might use to optimize the output capacity of the two systems. You might need one less sales person. You might need to schedule promise dates. If the market is strong and sustainable, you might need two of those machines to increase the output capacity of production to 48 units per eight hour shift.