Investing in production capabilities is not just a financial decision; it's a commitment to reaching a new potential and a harbinger of expectations. With every dollar spent, businesses aren't merely buying equipment or hiring staff; they're also setting the stage for future performance.
As we expand our production capacity, the bar of expectation naturally rises. This increased potential comes with its own set of challenges, much like an athlete facing progressively higher hurdles. During the first stage of investment, we strive to meet expectations and navigate challenges. Once we master it, we can easily clear the hurdle. But as we further invest in production capacity, we must face a much taller hurdle. Pressure is high. Apprehension and doubt can easily set in. The larger the investment, the more heightened the expectations.
Consider the case of ABC Mining, which recently invested heavily in advanced logistical control technology. While this investment significantly increases their ability to access the capacity of the supply chain, it also escalated the pressure on their teams to deliver results that justify this expenditure. The pressure had many unintended consequences. Training was extensive, they scrutinised performance, morale lowered, experienced personnel left, and the remaining team struggled to run the new system, let alone reap any additional benefits.
The critical, and often overlooked, aspect of business growth: with increased capability comes increased expectation.
Balancing expectations with realistic goals is crucial for successful growth.
Clearing the hurdle once shows the capability for success. The unintended consequence of expansion, is that as your operations grows so does the number of production issues you face. Many can shut down an entire production delivery pathway. Luckily, increased operational flexibility usually accompanies shiny new infrastructure and employee uniforms.
Can operational flexibility be used to overcome production issues and sustainably clear profitability hurdles? There is always a downside. What is the downside of flexibility?
The Productivity Problem Part 1: Defining the Problem Series