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Handbook of Budgeting, 6th Edition by William R. Lalli

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CHAPTER TWENTY-ONE

Manufacturing Budget

C. Eugene Moore

C. Eugene Moore & Associates

INTRODUCTION

Our objective in this chapter is to review the concepts used in preparing the operations/manufacturing budget, to discuss some of the problems encountered in preparation, and to suggest techniques that the manager should employ in building that budget into a full business plan and profit program pro forma. Nothing that exists when you start this process should be the same when you finish it. You must plan deliberate change unrelated to history to be successful.

In consulting specialized reference material, readers normally assume that the information is technical and therefore free of an author’s bias. This assumption is false. The dynamics of a manufacturing organization make preparation of budgets much more than a sterile planning exercise as the concepts and techniques set forth, all founded in personal experience, are the basis of the recommended approach.

Other aspects of budgeting have been reviewed in previous chapters, but their successful assimilation into a total budget depends on the decisions made by managers in the manufacturing organization. The planned action budget methods that will build on management decisions for planned, deliberate change constitute the general assumption throughout this entire chapter, if you have the will to manage.

Does it work? Yes! In fact, you cannot accomplish the expectations of your associates if you do not follow this concept. The Association ...

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