Advancing Production Performance

There are two general rules for advancing production performance and pushing back limitations. First, the limitations on production are pushed back further and faster the more consistently and thoroughly the principles pertaining to the system in use are being applied. Second, the systems themselves represent a distinct order of advance, with unique-product production the least advanced, process production the most advanced. They represent different stages of control over physical limitations. This does not mean that opportunities for advance lie everywhere in moving from the unique-product system to the process-production system. Each system has its specific applications, requirements, and limitations. But we advance to the extent to which we can organize parts of production on the principles of a more advanced system and learn, at the same time, how to harmonize different systems within the same process.

There are also two general rules concerning the demands on management competence made by each system. First, the systems differ not just in the difficulty of their demands, but in the variety of competence and the order of performance. Management, in moving from one system to another, has to learn how to do new things rather than learn to do old things better. Second, the more we succeed in applying consistently the principles of each system, the easier it becomes for management to satisfy its demands.

Each management has to meet the demands of the system it ought to have according to the nature of its products and process, rather than those of the system it actually uses. Being unable or unwilling to apply what would be the most appropriate system results only in lack of performance; it does not result in lower demands on management, but inevitably increases the difficulties of managing the business.

(Drucker, 1974, pp. 203-204)