Why you should move from a 'Make-and-Sell' to a 'Sense-and-Respond' Organization

Abstract: Most organizations use a planning system sometimes known as ‘make-and-sell’. This means that managers sit down once-a-year with their spreadsheets and decide which products he company will make and which services it will provide and then determine the required investment, price, costs, marketing and so forth to meet the plan. Needless to say, if customers don’t want to buy those products and services the company has a major problem. In this paper we look at an alternative view sometimes known as ‘sense-and-respond’. It goes some way to explaining why companies such as Toyota perform so much better than their rivals.