Some improvements in operations can be so effective that management should better be prepared for success, otherwise it can ultimately turn out as a splendid blunder.
This post is a kind of sequel of “Your next bottleneck is elsewhere (and in the future)” and based on a true experience in pharmaceutical industry.
The story takes place in a primary and secondary packaging workshop in an European (big) pharma plant. This workshop’s poor performance is allegedly the cause of stock outs and delays on the market. Given the increasing competition for this drug – now no more patent protected – it is mandatory to restore on-time deliveries to resist the generic makers’ aggressive attacks.
The packaging is the last step before shipping, and unblocking it suddenly means :
- flushing a lot of goods that were waiting before the bottleneck, propagating a wave of workload downstreams,
- draining the queueing material before packaging as its capacity is better utilized, and may be idle if the next supply does not follow the new pace.
Therefore the warnings to management as we begun our assignment: your next bottleneck is elsewhere and be prepared for success.
Management did not take it seriously. I assume first because in pharma nothing goes really fast, second because the silo mentality still prevails. The upstream process (called manufacturing) was another department with a different team struggling to solve their own problems. Off limits to us.
Our efforts on packaging paid off soon: +50% output within a few weeks, leading to restock the dispatch centers in various countries and… drain the huge internal buffer in front the packaging.
Now with the capacity recovered and high spirit of the team, we wanted more material to keep supplying the market and possibly regain lost market shares.
Alas, these results caught management totally unprepared for success and blind to the new bottleneck, which was not manufacturing as anyone would logically assume, but.. sales!
It turned out that manufacturing was not very good to supply packaging indeed, but could do. What was most shocking was that there were no more orders! Not only did the drastic packaging performance increase drain the buffer of raw material, but it drained the order book as well.
Being used to years-long delayed supplies, management (?) nor sales teams paid attention to the warning and did not anticipate the exploitation of the recovered capacity.
As a result, not only did the drastic performance increase in packaging remain only a sporadic and local success, it did not yield the huge revenues it could have and disappointed all highly energized packaging team members, now waiting idle for occupation.
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