Level Selling

A stance toward customers that presumes the level of demand for many products is relatively stable but often is perturbed by production and sales systems.

For example: Monthly and quarterly sales bonuses for sales staffs tend to bunch orders at the end of the reporting period. Promotional activities, such as service specials at car dealers, tend to create spikes and troughs in demand for service parts unrelated to actual customer desires. And producing large batches of goods far in advance based on forecasts almost certainly leads to surpluses of some goods, which then must be sold using special promotions that temporarily “create” demand.

Level selling involves the elimination of artificial sales spikes—what Toyota calls “created demand”—by changing sales incentives, eliminating promotions, producing in small batches to replenish what customers have just purchased, and forming long-term relations with customers so that future demand can be better anticipated and smoothed. Any variations in demand remaining after production and sales system distortions have been removed are real variations. A truly lean production and selling system must be capable of responding to them.