As a chemical company grows, organizational changes occur that alter the manner in which things are done. Some changes are beneficial while others are detrimental. A beneficial change is one in which the process of order fulfillment improves in efficiency. Order fulfillment is the core activity of any manufacturing business. Improvements that do not affect order fulfillment may be little more than decoration.

A detrimental change is one in which order fulfillment is negatively affected. Any change that reduces the speed or increases the cost of order fulfillment is a detrimental change.  Some detrimental changes are unavoidable. Improvements in infrastructure due to growth may lead to detrimental changes. Increased overhead expense due to new warehousing, increased regulatory compliance costs due to crossing a volume threshold, upgrading the pots and pans, or any number of other “improvements” may lead to negative change. 

Equipment upgrades can easily lead to unexpected organizational changes. New equipment leads to new procedures and new failure modes.  A new piece of equipment integrated into a system can lead to modes of failure and risks that were unanticipated. New equipment can lead to new manpower requirements and new demands on infrastructure. Suddenly, a new piece of equipment can cause the reorganization of activity around it. Machines may be limited in flexibility, but people can change their work habits to accomodate the device.

On a day-to-day level, a company may not sense that it has undergone growth, but in fact it has. The acquisition of new equipment can change the manner in which a company operates over the long term.  This is especially true if it increases the capacity of the plant. Equipment upgrades that increase throughput will lead to increased sales and, hopefully, increase profit. Soon, more cash is available for more upgrades.

Where a company can go wrong is the failure to tend to the institutional changes that have to occur with increased growth.  A company that grows in the plant but not in the front office (the overhead suite) is one that finds itself slipping behind the power curve.  Suddenly, increased volume leads to increased chaos. Unless institutional changes are made, the system may become dangerously unstable despite rising receipts.