③ Sales vs. Production Management
From a company-wide perspective, the ideal is for Sales and Production Management to coordinate authority and priorities smoothly. In practice, though, it often turns into conflict between teams and between individuals. Why does this happen so often? Production Management tends to put return on invested resources first: what matters is what makes money right now. Sales, on the other hand, cares more about strategic choices that support the business and sales results over the long term in a changing market.
When one of the two departments gains too much authority and influence, its demands come to dominate resource allocation. For example, if the Sales department holds excessive power, it can easily promise unrealistic delivery dates to satisfy customers. I have seen this often in the field myself. It puts an excessive burden not only on Production but also on other sales reps, and can lead to extremely inefficient use of resources. It can also cause serious tension and conflict between departments. Let’s look at why conflict arises between Sales and Production Management, and at some examples.
The first cause is 'differing goals.'
Sales teams typically work hard to hit sales targets and maximize customer satisfaction. That calls for the fastest possible delivery and flexible order handling. Production Management, on the other hand, aims for efficient, cost-effective production, which requires keeping precise production plans and schedules. Suppose Sales secures a small, technically difficult order as a pilot test for a large customer’s bulk order. This could be a very important strategic opportunity over the long term. Sales urgently passes it to Production Management, but Production Management has already built and is running an optimized production plan, and including this urgent pilot order would mean revising the existing plan completely. If that lowers production efficiency and raises costs, Production Management misses its goals and takes the hit. When goals collide over order priority and how to handle orders, conflict is only natural.
The second cause is resource constraints.
Decisions about how to allocate limited resources such as raw materials, equipment, people, and time can also cause conflict. Say the overseas sales team receives a variety of orders from several customers at once, and some of the products require very specialized raw materials. Naturally, the sales reps want to push these orders into production as quickly as possible and ship them once complete. But only a limited quantity of that raw material is available, and it has already been allocated to a product line ordered by the domestic sales team. Production management had carefully planned how to optimize the use of this material, so it struggled to respond flexibly to suddenly changing orders, and other production plans were disrupted as well. The result is a disagreement over raw material allocation among the overseas sales team, the domestic sales team, and production management, and sometimes voices are even raised.
The third cause is differing performance criteria.
When departments are evaluated by different performance criteria, conflict follows very easily. Sales is typically measured on sales volume, so it tries to win more orders and push them through quickly. Production Management, by contrast, is mostly focused on production efficiency and cost savings. Naturally, these different criteria set departmental goals against each other, and one department’s success works against the other’s. This weakens employees’ sense of fairness and their satisfaction with the performance reward system. Departmental self-interest also grows, making company-wide cooperation very difficult and standing in the way of growth and innovation.
The fourth cause is 'a lack of communication.'
Without clear communication, conflict follows. In a particular season, the sales team asks for a sharp increase in output of a specific product for a specific market in order to make the most of the opportunity, but production management has already set its production plan for the next several months. That plan is optimized around many complex factors, including raw material orders, equipment maintenance schedules, and staffing. Accommodating sales' request would mean re-planning everything from scratch, which inevitably raises production costs and delays other product lines.
The fifth cause is the absence of a 'mediator.'
Without a mediator who understands both Sales and Production, finds common solutions, and balances their interests, problems grow more complex and entrenched. Both sides are likely to dig into their own positions, which deepens mutual distrust and emotional confrontation. If the conflict continues without a suitable mediator, communication between departments will break down. That silence breeds misunderstanding and misinformation, and ultimately drags down the organization’s overall efficiency. Naturally, work efficiency and productivity fall sharply, and employee turnover rises. Quality and delivery dates suffer in the end, and customer trust hits rock bottom.
This conflict between Sales and Production Management arises because each side values different criteria. To resolve it, strengthen cooperation between organizations, and advance company-wide goals and profit, you can apply a few criteria.
1. Customer importance
Here you set priorities by weighing each customer’s current importance and future value. You score importance precisely, enter it in the CRM (Customer Relationship Management) system, and classify customers as A, B, C, D, or as strategic partners, high-value customers, and regular customers. When an A-grade customer or strategic partner requests an urgent order, that order is automatically placed at top priority in the production plan. This approach greatly improves customer satisfaction and strengthens long-term business relationships. To put this priority into practice, you need to adopt a suitable CRM system, analyze customer data systematically, and make it possible to understand each customer’s business value and needs accurately and quickly.
2. Profitability and cost efficiency
This method sets priority by comparing each order’s profit with the cost of completing it. Evaluating profitability requires a cost-profit analysis tool. When an order shows high profitability, it is automatically placed at the top of the priority list. For example, if a bulk order arrives for a high-priced product from a nearby customer, its high profitability puts it first in line for resources. This maximizes company profit right away and helps build a cost-efficient production plan. The downside is that it ignores future value, so sales reps may put less effort into winning customers who matter strategically and over the long term. To put this priority into practice, you need a tool that analyzes the profit against the cost of each order, and orders that generate higher profit should be handled first.
3. Delivery date
Considering the delivery dates customers require, urgent or time-sensitive projects can be assigned to production first. If the company sets and enforces a policy that strictly manages customer delivery requests, urgent projects are classified for special handling and given top priority in the production schedule. For example, if a faster delivery on a truly important test order can lead to a large, profitable order, that project gets handled first in the production plan. This method helps meet customer expectations and builds trust in the market. However, if a sales rep can ignore the minimum production lead time (e.g., 1 month), win an order with an abnormal delivery date (e.g., 2 weeks), and enter it into the ERP with no way to filter it out, chaos will follow. To put this priority into practice, you need policies and systems that identify urgent or time-sensitive orders and handle them first.
4. Resource availability
This approach sets order priority based on available resources, such as production capacity, inventory levels, and staffing. It leans toward the Production Management viewpoint. You build a system that monitors production capacity and inventory in real time, and order priorities adjust automatically based on what is available. For example, if stock of a particular raw material runs low, orders that use large amounts of that material automatically move down in priority. This approach makes efficient use of resources and minimizes production delays. In my view, it suits simple, repetitive production well, but it can cause problems for custom products whose importance changes frequently. To put this priority into practice, you need a system that monitors resource availability in real time and adjusts order priorities accordingly.
5. Market strategy and goals
This priority leans toward the Sales viewpoint. It puts orders that fit the company’s overall market strategy and goals first. Sales knows market information and trends better than Production Management does, so it makes sense that its viewpoint carries weight. The company plans new product launches and market expansion, and adjusts the production plan flexibly to reach target customers in the target market quickly. Production for a specific country, region, or customer takes priority over other orders. This strategy helps speed up market penetration and secure a competitive advantage.
Beyond applying the criteria above, reducing conflict between sales and production management takes several things. Motivate both sides to work toward a shared goal, and be transparent about how decisions are made and which criteria or data are considered. Share successful examples of cross-department collaboration on a regular basis, highlighting the teamwork that made them possible. Offer training and development programs so employees can learn new skills and understand the work of other departments more deeply. Adopt a collaborative approach that brings together the perspectives of different departments, and encourage behavior that promotes cross-department cooperation and teamwork through incentives and rewards.
To be continued