Marketing personnel in companies that manufacture industrial goods often complain about the activities and attitudes of their manufacturing counterparts with laments such as: “Why can’t they become market-oriented or customer-oriented?” “Why are they so provincial?” The manufacturing people, on the other hand, lament like this: “The marketing people have no understanding of costs, profits, plants, or operations. They are just a bunch of dumb peddlers.”

While some consumer goods companies, particularly those in fashion industries with broad product lines (e.g., apparel, furniture), experience antagonism between these two key functions, the need for cooperation is much greater in the typical industrial goods company.

In this article I will begin by detailing the areas of necessary cooperation but potential conflict. Then, I will consider the causes of conflict. Next, I will suggest ways of managing the conflict by increasing cooperation and minimizing antagonism between the marketing and manufacturing functions. Finally, I will recommend an approach for strengthening the two functions.

The Problem Areas

The accompanying Exhibit lists eight general areas in which there is a strong likelihood of conflict in managing the marketing/manufacturing interface in an industrial company. Let us start by taking a closer look at each of these problem areas.

Exhibit Marketing/Manufacturing Areas of Necessary Cooperation but Potential Conflict

1. Capacity planning and long-range sales forecasts. Beyond the day-to-day issue of what product do we make tomorrow or next week, one of the strategic areas of cooperation is capacity planning and long-range sales forecasting. It often takes a long time for a company to change its manufacturing capacity. If such a change requires a new or enlarged building, design and construction can take several years. The addition of new equipment can take up to two years in most industries. Even the hiring and training of additional employees to staff existing physical capacity can take as long as from one year in fairly typical industries to several years in fields requiring great skill and experience such as tool and die making or advanced welding.

The problem is further exacerbated by the business cycle. Usually, most companies want to build plants, buy equipment, and hire employees at the very time when the construction industry is busiest, the equipment backlogs longest, and the labor market tightest. In addition, excess capacity is expensive. Mortgage payments, rent, taxes, depreciation, unemployment benefits, wasted training, and so on eat into profits when sales are lowest.

Thus the solution is clear: have exactly the right capacity at the right time.

But that requires precise long-term sales forecasting. And, because sales forecasting is not a science, the marketing and sales executives who forecast sales can’t be expected to be right every time. In many companies, the problem is much more complex than just a gross sales forecast. In these situations, either capacity is a function of product mix, or different manufacturing processes require different facilities or labor input. Here the sales forecast must not only be precise in total, but each part must also be precise.

Capacity planning is an area in which both marketing and manufacturing are seldom perfect. The sales forecasts are often wrong partly because of the inexactness of the forecasting act itself and partly because the salespeople who are closest to the customer often react emotionally to market prospects. When business is down, the salespeople perceive it as even worse than it is when business is good, they become ebullient.

In self-defense, manufacturing people often second-guess the marketers and operate from revised forecasts. Since the manufacturing people are insulated from the marketplace, their forecasts are often no better, and are sometimes even worse.

If capacity is too low, marketers are upset because they are losing sales. If capacity is too high relative to sales, they are upset because costs are too high.

2. Production scheduling and short-range sales forecasting. This problem area is a short-term mirror image of the longer-term situation. It is more operational and thus less likely to involve top level line executives, but the conflict between the production scheduler and the sales manager can be intense, especially due to the fact that specific customer relationships and orders are involved.

In addition, the people active in this fray usually have less perspective on the company as well as less experience and judgment. They are therefore likely to be insular in their viewpoints. Also, as in the longer term, perfection is unlikely to be achieved. The forecasts aren’t perfect, and the schedules are not totally flexible. In addition, the scheduler must be responsive to needs beyond those of the sales manager and his or her customers. The scheduler often is attempting to maximize total output, minimize cost, and maintain labor stability so that he is almost forced to schedule at the convenience of the plant manager as well as of the marketers.

3. Delivery and physical distribution. This area is like the previous two in that it involves sales forecasts going from marketing to manufacturing and manufacturing’s response through the management of a capability. In this instance, the response is determined by inventory availability instead of manufacturing capacity.

The nature of the company’s industrial business largely determines the importance of this problem area and the degree of conflict related to it. If the company manufactures a broad line of proprietary items (as opposed to custom designed and built items) and if customers require rapid response, the inventory/distribution system is of major concern. Companies that provide replacement parts for capital equipment, for example, usually find delivery and inventory control crucial because their customers’ operations are dependent on their ability to ship orders quickly.

In many companies physical distribution has been a traditional area of conflict involving frequent organizational shuffling. Usually the sequence works something like this: marketing runs physical distribution and inventory control and, while customer service is good, inventories are too high. Yet manufacturing does not gain the benefits it thinks it needs from using the inventory to smooth production and lengthen runs because marketing is always demanding small batches on short notice to keep inventories balanced.

In response to this problem, management shifts the physical distribution function from marketing to manufacturing. The result is better inventory management and coordination with production scheduling, but poorer customer service. Then, after months of organizational backbiting and bickering, management settles on a third option. It creates a separate physical distribution function. Finally, this arrangement satisfies neither marketing nor manufacturing and lasts only until the pressure gets too high, and the organization is reshuffled again.

4. Quality assurance. Because production and inspection operations are seldom perfect, products have quality problems that are obvious to customers and sources of aggravation and embarrassment to salespeople. The typical marketing expectation is that if the plant were run correctly, problems would be nonexistent or at least minimal. Sometimes that is true—quality problems are caused by poor manufacturing management.

On the other hand, quality levels are closely related to other marketing interests that involve manufacturing complexity, variety, cost, and field service. Marketers often perceive customers as desiring “advanced” features and options. These complicate the manufacturing task and increase the probability of quality and field service problems. In addition, the broader the product line, the more opportunity there is for the manufacturing operation to fail in some way because of employee unfamiliarity or system error.

Finally, because meticulous manufacturing and quality assurance are expensive, in some situations it is cheaper to fix a few problems in the field than to raise manufacturing and inspection standards throughout the production process.

5. Breadth of product line. Folklore has it that the marketers want a broad product line while manufacturers respond with the classic line attributed to Henry Ford: “You can have any color you want as long as it’s black.” The source of the conflict is understandable when one compares the cost (to the company) of a product line broader than optimum (from the total company’s viewpoint) to one narrower than optimum.

The product line that is too narrow results in lost sales through (a) loss of competitive position as a “full line” supplier or in particular product areas and market segments, (b) loss of distributor and sales force support, and (c) loss of economies of scale.

The line that is too broad results in (a) added inventory cost of raw material on hand, work in process, and finished goods, (b) increased cost of manufacturing changeover due to loss of capacity, setup changes, scrap generation, and stress and strain on equipment and employees, (c) added order processing and transportation costs, and (d) possible sales force, distributor, and customer confusion and displeasure.

Most of the costs of the narrow product line and all of the measurable (as distinct from actual) costs are in the marketing area. For the broader than optimum line the situation is reversed—all of the measurable costs and almost all of the actual costs are in the manufacturing area. There is therefore a natural, rational basis for conflict.

6. Cost control. Most marketers view cost as a prime determinant of price as well as, of course, of profits. Marketers tend to attribute costs that are too high to inept manufacturing management. Manufacturing personnel tend to relate high costs to “unreasonable” marketing demands such as rapid delivery, high quality, a broad line, and facile introduction of new products. Because it is inherently difficult to precisely assess either the costs or the benefits of such demands and to know what is “just enough” quality and so forth, there is often little factual data to support or refute such biases.

7. New product introduction. Although they are a prime competitive weapon in the marketplace, new products can greatly upset the manufacturing operation. They require new processes, employee training, new equipment, and trial-and-error operation until they are integrated into existing operations.

Furthermore, what is only a minor modification to a marketer may be a major operating change to a manufacturing person. Ideally, innovative new products should offer great customer benefit and little upset in the plant. All too often, the manufacturing personnel perceive little customer benefit and great upset in the plant.

8. Adjunct services. Finally, there is a range of services, which often include installation and field service or repair, that concern both marketing and manufacturing. As in the preceding areas, interests and perceptions differ, and conflict is frequent. Factory people, for example, tend to view installation as the final manufacturing operation while marketers view it as a customer service function.

The Basic Causes

The explainable reasons for conflict in the problem areas just discussed fall into two categories. One consists of basic causes found in almost every industrial goods producer. The other is complicating factors that exacerbate the basic causes in certain situations. Here, I will confine my discussion to a review of the basic causes. Then, in the following section, I will examine the complicating factors.

Evaluation and reward: One prime reason for the marketing/manufacturing conflict is that the two functions are evaluated on the basis of different criteria and receive rewards for different activities. On the one hand, the marketing people are judged on the basis of profitable growth of the company in terms of sales, market share, and new markets entered. Unfortunately, the marketers are sometimes more sales-oriented than profit-oriented. On the other hand, the manufacturing people are often evaluated on running a smooth operation at minimum cost. Similarly unfortunately, they are sometimes more cost-oriented than profit-oriented.

This system of evaluation and reward means that the marketers are encouraged to generate change, which is one hallmark of the competitive marketplace. To be rewarded, they must generate new products, enter new markets, and develop new programs. But the manufacturing people are clearly rewarded for accepting change only when it significantly lowers their costs.

Because the marketers and manufacturers both want to be evaluated positively and rewarded well, each function responds as the system asks it to in order to protect its self-interest.

The nature of the costs involving the problem areas magnifies the differences in the evaluation and reward system. The prior discussion about breadth of product line is a good example. Because the costs of a broader line are primarily in the manufacturing area, the manufacturing manager emphasizes the advantages of a narrower line. The reverse is true for the marketer. Thus the situation literally forces each manager into an adversary position. Each creates pressure for the policy that minimizes his costs, maximizes his benefits, and leads to a positive evaluation and an appropriate reward.

Inherent complexity: Many of the problem areas help to engender conflict by the very nature of their inherent complexity. Because they involve at least two different functions, they usually need data from two different sources. Furthermore, the data are typically a mixture of “soft” (i.e., qualitative) marketing data and “hard” (i.e., quantified) manufacturing data. With regard to capacity expansion, it is fairly easy to determine the costs of facilities and equipment but hard to forecast sales and capacity utilization.

The problem areas are also complex because of the amount of the organization they involve. In many ways, the sales and the manufacturing operations represent the real horsepower of a company. They are the line functions that support the planning, financial, control, and administrative staffs. Thus any issue at this interface involves the core of the company.

Moreover, there is inherent complexity both conceptually and operationally at the analysis, policy formulation, and implementation levels. The data are in both sides of the house. The people responsible for formulating and implementing the policies are in both places. And the effects are felt in both.

Orientation and experience: Another basic cause of conflict relates to the exposure, both current and past, of the managers involved. By and large, the industrial marketer is most likely to have come up through the sales route. He began as a salesperson who “lived and died” by his customers, and his work experience has always emphasized the customer. As a sales manager and even as a marketing manager, he deals with customer problems. The problems may be broader and the accounts larger, but his orientation remains the same—the customer.

The top marketing people usually have offices near the more operationally oriented salespeople, work with them on an intimate basis, and even visit field sales locations and customers. Their early biases are thus magnified by the people and situations they deal with on a day-to-day basis.

Their counterparts in manufacturing often began as foremen and worked up through the production operation. They are aware of factory problems. They understand them, and they are exposed to them every day. Even the top manufacturing executives interact with their close (organizationally and geographically) associates whose prime concern is the plant. They visit manufacturing operations much more frequently than they do customers.

Each marketing and each manufacturing manager is more aware of his own organizational situation and problems. Each is more at ease with his own function. Each is also more in tune with his own subordinates. He hires and trains them. He shares their experiences and viewpoints. He understands their orientations and attitudes. How could they be anything but right?

Cultural differences: In most situations, the top level marketing and manufacturing managers literally live differently. As an example, consider two executives at an actual but disguised company that I will call here the Stopem Startem Controller Company (SSC). This company is a medium-sized midwestern producer of electronic flow controllers for liquids and gases sold to original equipment manufacturers, engineering contractors, and end-users in process industries such as chemicals, paper, and petroleum refining.

Sam Sell, who is vice president of sales and marketing, received a bachelor’s degree in chemical engineering from Drexel Institute in Philadelphia. He began his career as a salesman and worked for several other companies before joining SSC. Bob Build, vice president of manufacturing, received a bachelor’s degree in mechanical engineering from Purdue University and a master’s in industrial engineering from Illinois Institute of Technology. He began as a foreman with SSC and worked his way up through line and staff production positions.

These two executives differ literally in the way they live as well as in the way in which they manage. Sam Sell has much greater ego drive and empathy (the typical salesperson’s personality structure) than Bob Build. Sell drives an Oldsmobile 98 and enjoys golf, tennis, and poker. Build drives a Porsche, which he maintains himself, and his hobbies are his car, gardening, and woodworking. He is a meticulous craftsman. In short, they fulfill their different marketing and manufacturing stereotypes. But they are real people. And they are the rule rather than the exception.

In fact, despite the belief among some academics I have talked with that the differences just cited are too strongly drawn, there are data to support them. Paul R. Lawrence and Jay W. Lorsch, for example, have found significant differences in the task and social concerns of sales and production managers.1

It is not unlikely that Sam Sell’s and Bob Build’s cultural differences alone would make it hard for them to work together intimately. When this subtle but equally important source of conflict is added to the other previously described basic causes, it is easy to understand why the marketing and manufacturing people don’t always see eye-to-eye.

Complicating Factors

The situation can be even more complex because there are some additional factors that have an impact on most companies as well as a more limited set of factors that affect some companies. Let us first consider the more limited factors. In some industrial companies, the marketing and manufacturing people must also interface with either the R&D function or the engineering function, or both. The two-party situation thus becomes a three-or four-party situation.

This interface is especially difficult in the new product area where R&D and engineering are key functions. In many companies that manufacture electrical or mechanical components and/or equipment (e.g., machine tools, drives, hydraulics), the engineering manager plays a role that coordinates manufacturing and marketing and in some cases even subordinates these functions. At times, the nature of the business and its strategy dictate that ascendency. At other times, the engineering manager by virtue of his technical knowledge and/or political strength is the only person who can manage the marketing/manufacturing interface.

Other functions enter the picture to add complexity to certain decision areas. The finance people, for example, are almost always intimately involved with capacity planning decisions. Control personnel are usually active in cost control and often in inventory control/physical distribution decisions.

Companies with large and diverse product lines have a particularly difficult job in managing the marketing/manufacturing interface. Rapidly growing companies also encounter special difficulties because the pressures for performance are greater, the resources more strained, and the organizational mechanisms often less developed. Thus, although the need for cooperation is greater, the capabilities to cooperate are sometimes more limited.

These situations affect only some companies. Almost all manufacturers, however, feel the effects of environmental changes. The economy has been more erratic than in the recent past. Since the sales cycles of most industrial goods companies are closely related to the general business cycle, they are greatly affected. Sales forecasting is more difficult, product planning is harder, and mistakes are more costly. Mistakes also contribute to long-term counterproductive antagonisms.

Technology is changing more rapidly. Products more quickly become obsolete, and then processes need to be replaced. This environmental change puts tremendous burdens on both marketers and manufacturers.

Closely related to technological change is the proliferation of automated operations, which are often much harder to change than more labor-intensive operations. Mistakes are more expensive, and response to marketing needs slower. However, even newer technologies utilizing minicomputers may allow more flexible response. But until these are developed, automation apparently makes the marketing/manufacturing interface less fluid and thus more exasperating.

Capital constraints and the high cost of capital make major manufacturing changes expensive and redeployment of plant facilities difficult. Mistakes are visible, and poor response and poor coordination can’t be easily covered over by committing more dollars.

Finally, the sheer increase in the size of companies makes the marketing/manufacturing interface more difficult to manage. More people are involved. For example, if it is a multidivision corporation, both the marketing and the manufacturing managers must coordinate not only with one another, but also with divisional functional managers, the division general manager, and their corporate counterparts.

The situation is, however, not all bleak.

Managing the Conflict

Like market competition, conflict can ensure effectiveness and efficiency. Top management’s task is to maintain a constructive amount of tension by making sure that both marketing and manufacturing understand the need for a balanced situation but still strongly represent their own interests.

Explicit Policies

Top management can balance the interface with more than the traditional techniques of mediation and arbitration, which are useful and necessary. A good beginning is the development and promulgation of clear, straightforward corporate policies. For example, marketing and manufacturing are much less likely to argue about product line breadth if, as a conscious policy, the company decides to be a full-line producer, to emphasize only high-volume items, or to concentrate on some other category of products. Such policies provide a set of rules within which the marketing and manufacturing people can operate, and they encompass most, if not all, of the problem areas delineated earlier.

Illustrative examples.

Let me demonstrate the importance of explicit corporate policies covering the marketing/manufacturing interface by offering two examples.

In one situation, a manufacturer sold replacement parts for heavy construction equipment to distributors and large end-users. To the marketing people, the essence of their strategy was rapid response to orders and on-time delivery because lack of a part could keep an expensive piece of equipment out of operation. To the manufacturing people, the basis of their approach was effective asset management, which meant low inventories and high capacity utilization.

However, manufacturing’s low inventories made it impossible for the company to provide rapid response to orders. High capacity utilization implied undercapacity when the highly cyclical construction industry was busiest.

Vocal dissatisfaction from key distributors and large end-users finally reached top management. After several meetings involving both marketing and manufacturing people a task force was formed to study the issue. The task force approach had two happy results. First, the people involved developed personal cross-functional relationships. Second, explicit corporate guidelines accepted by top management included the measurement of manufacturing people on service levels stressing percentage of orders shipped complete and percentage shipped on time.

In short, the guidelines clarified the trade-off between service level on the one hand and inventory size and capacity utilization on the other. The conflict problem was not “solved,” but the tension was brought under control.

In the other situation, a manufacturer of office furniture was subject to frequent hassles concerning length of product line. Because no explicit goal had been established, the manufacturing vice president constantly fought to reduce the line and his marketing counterpart fought to expand it. They found it impossible to jointly analyze the financial impact of changes in product line length, and each became more strongly committed to his own belief.

The sales manager, who reported to the marketing vice president, provided ample evidence of “lost sales” because the line lacked additional “popular” styles. Similarly, the plant manager supported the manufacturing vice president with reams of data on the “cost” of the “overly long” product line. No light but much heat was generated by quarterly “planning” meetings.

Subsequently, in desperation, a team of outside experts was handed the problem. The team clarified costs, studied the market, and—as in the previous example—made explicit the trade-off between a broader product line more attuned to customer needs and a smaller product line more responsive to manufacturing constraints. In this particular example, the management decision to contract the product line in particular areas was incorporated into a revised strategic plan. Nobody was totally pleased with the solution but both functional sides viewed the result as a “sensible compromise.”

Over time, the management guidelines have been adjusted to changes in customer needs, competitive activities, manufacturing capabilities, and technology. In fact, product line length is now a major parameter of the corporate business plan.

Each function should also be responsible for developing policies that relate to the total corporate strategy and to the needs of its sister function. Thus, if the manufacturing schedule and corporate policies are oriented toward large orders, the sales force can have policies limiting small orders. Or, on the other hand, if delivery is a key part of corporate and marketing policy, the manufacturing operation can emphasize high finished and semi-finished inventory. Although it is poor policy to have the marketing function stressing delivery while manufacturing stresses low finished goods inventory, it is not unusual to find such situations.

Modified Measurements

To bolster common policies, the evaluation and reward system can be modified to stress inter-functional-cooperation. Marketing managers might, for example, be judged on those variables viewed as important to the manufacturing operation. Good sales forecasting might be rewarded instead of going over the sales quota. If the sales people are judged on their ability to beat the quota, they will keep it low rather than realistic.

Manufacturing people might be judged on a combination of inventory size, delivery response time, and the ability to meet delivery commitment dates rather than just on asset management. Cost goals should be spelled out not only in terms of lower costs but also in terms of improved performance in quality, implementation of new product introduction, and so forth.

A common evaluation and reward system can be effective only if there are policies on which the criteria can be based and data that enable measurement against a plan. Many companies don’t, for example, have planned or actual breadth of line data. All that is known is that marketing thinks the line is too narrow and manufacturing is just as sure that it is too broad.

The gathering and analysis of data concerning interfunctional problems are useful for more than measuring performance against a plan. Data are necessary to relieve some of the inherent complexity of the interfunctional situations. As an example, if a company were concerned with field service, it would have to have good data on service costs, frequency of failure, impact on the customer and/or prospects, and even the cost of tighter quality control.

It is important for the data to include quantified plans and budgets, as well as actual performance. The best way to evaluate sales forecasting is to record the forecast and compare it with actual sales. The same is true of the other problem areas.

The data to be gathered will vary with the type of industry and the situation but should in general focus as closely as possible on the basic desired parameters. As well as cost performance, these data will often emphasize customer needs such as inventory support, rapid repair service, and the like.

In fact, it is quite realistic to survey customers concerning their perceptions and to use these as a basis for analysis, planning, and evaluation. For example, while it is important to measure the cost of a service operation, average frequency of repair, and maximum time from request to repair, it is also useful to ask customers to rate the service quality, helpfulness of repair people, and so on.

People Concerns

Several people-oriented approaches can be taken, the simplest of which is to encourage informal inter-functional contact. The best sales meetings, for example, include manufacturing managers and representatives from other functional areas. This enables the manufacturers to meet informally with the marketers in both work and recreational settings. Experiences and concerns can be shared. Perhaps even more important, personal relationships can be developed. These generate mutual respect and understanding, which are particularly useful when difficult interfunctional problems are confronted.

Another people-oriented approach involves mixed career paths. If more managers cross over functional lines during their development, they will better understand the activities, concerns, and values of their sister functions. It will also lead to better balanced top managers. Most companies shy away from this approach because they fear the upset or cost. Concerns include, “I don’t want a foreman-type to ruin a good customer” or “That sales-type will be eaten alive by the union.”

While such concerns are valid, the problems are clearly not insurmountable—especially if the program is begun fairly early in career development and fairly low in the organization where risks are minimal. This career path approach requires a strong management commitment but the benefits can be high because it provides a solution to the orientation, experience, and cultural differences discussed earlier.

A major side benefit is the development of broad-experienced general managers. A surprisingly large proportion of outstanding division general managers has risen this way. In the past such a path often came about haphazardly. In the future, it should be part of a combined executive development program and method of coping with inter-functional conflict.

Still another people-oriented approach is less drastic than mixed career paths and perhaps less effective. Many opportunities present themselves for interfunctional task forces and committees. If these are well-developed and involve people at lower levels in the organization, they can be effective in helping each function to learn from the other. The informal contact engendered by such a program can often be as useful as the purely task-related interaction.

Mediation and arbitration cannot be neglected as useful tools in managing the interface. They are really a part of the broader, more focused program recommended here. Top management can gain much by bringing marketing and manufacturing people together in an air of cooperation to analyze, plan, and implement approaches to problem areas. These sessions will be particularly useful if, as previously mentioned, goals are explicitly specified and credible data are available.

Strengthening the Functions

In order to lessen the amount of marketing/manufacturing conflict, management can make each function more responsive to the other’s needs. Marketers should build their programs around the operational strengths of their manufacturing unit. Thus the marketing executive must not only analyze his customers and prospects to understand their needs, but also analyze the manufacturing capability to understand its competitive strengths and constraints. Then, he must divide his market into segments and select for penetration those segments whose needs he can fill. Finally, he must develop a product policy that builds on the manufacturing unit’s ability to service customers in the chosen segments.

This kind of strategy is a great deal easier to describe than to implement. Few companies have explicit policies that provide a clear definition of the products and services they will offer and the benefits they will provide to the customer. Thus a product policy might state, “We will provide large volumes of a limited line of utilitarian items at low cost to customers who are capable of buying such volumes and willing to accept little variety and infrequent design change.”

It requires a great deal of top management discipline to select market segments and develop product policies. Without such an explicit strategy, the company begins to be “all things to all people” and eventually becomes “nothing to everybody.” The marketing function is thus given the task of selecting customers who need the company’s products.

The manufacturing function should not offer the marketers a fixed capability. Instead, the productive capacity of the company should become a well-honed marketing tool. In the past 12 years two main concepts have been developed by manufacturing scholars to help to accomplish this.

Martin K. Starr has suggested that products can be designed so that they can be made of interchangeable modules. With the appropriate production process, this modular approach enables the manufacturing function to provide substantial variety to the customer at limited cost. In such a situation, argues Starr, “Marketing management supplies the consumer with apparent variety even though the production output is based on the concepts of mass production.”2

Careful design of the manufacturing system can do even more. Wickham Skinner has shown that improved competitiveness can result from “learning to focus each plant on a limited, concise, manageable set of products, technologies, volumes, and markets” and from “learning to structure basic manufacturing policies and supporting services so that they focus on one explicit manufacturing task instead of on many inconsistent, conflicting, implicit tasks.”3

This approach enables a company to build its manufacturing capability in response to the specific needs of a clearly defined market segment. In a sales sense, customer benefits are maximized while manufacturing costs are minimized.

Recent suggestions that large factories are not necessarily efficient make the Skinner concept even more implementable.4 One large auto parts supplier, for example, has committed itself to the construction of small (no more than 500 employees) plants designed around specific customer needs and production technologies. This focused approach is a far cry from the consolidated manufacturing operations of the past.

Concluding Note

The following advertisement appeared in a recent issue of the Saturday Review:

Semantic difficulty with our Osaka, Japan branch factory has resulted in 468 Concert Grand Pianos, with tonal dynamics in reverse of normal. For particulars write Weaver Piano Company, East Grand Forks, SR Box G.P.R.5

While this particular ad was obviously written in jest, actual problems such as this are quite common. But they can be addressed if top management understands that:

  • The problems of marketing and manufacturing conflict are real and important.
  • The causes are complex but understandable.
  • The situation can be improved through carefully developed programs to foster cooperation.
  • The company will prosper when the marketing and manufacturing functions operate in an atmosphere of cooperation with the realization that each has its role to play and its needs to fill. Neither function can subvert the other.

1. Paul R. Lawrence and Jay W. Lorsch, “Differentiation and Integration in Complex Organizations,” Administrative Quarterly, June 1967, p. 1.

2. Martin K. Starr, “Modular Production—A New Concept,” HBR November–December 1965, p. 137.

3. Wickham Skinner, “The Focused Factory,” HBR May–June 1974, p. 114.

4. See Roger W. Schmenner, “Before You Build a Big Factory,” HBR July–August 1976, p. 100.

5. Saturday Review, October 30, 1976, p. 60.

A version of this article appeared in the September 1977 issue of Harvard Business Review.