Formerly, when we assembled and shipped cars, this was of the highest
importance because we had no place in which to store finished cars. Now
we ship parts instead of cars and assemble only those required for the
Detroit district. That makes the planning no less important, for if the
production stream and the order stream are not approximately equal we
should be either jammed with unsold parts or behind in our orders. When
you are turning out the parts to make 4,000 cars a day, just a very
little carelessness in overestimating orders will pile up a finished
inventory running into the millions. That makes the balancing of
operations an exceedingly delicate matter.
In order to earn the proper profit on our narrow margin we must have a
rapid turnover. We make cars to sell, not to store, and a month's unsold
production would turn into a sum the interest on which alone would be
enormous. The production is planned a year ahead and the number of cars
to be made in each month of the year is scheduled, for of course it is a
big problem to have the raw materials and such parts as we still buy
from the outside flowing in consonance with production.
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