Incentives and rancid chips!

[Cynthia Nadalini <invenia@guate.net>]

Hi all,
I would like to share this interesting story told by a guy in Mexico who 
sells antioxidants for the food industry in his country.  This guy was 
phoned by a potato-chips manufacturer, because they had been having 
problems with rancidity, and they were having a lot of their product 
returned by their clients (retailers).  I've no idea (but I can imagine) 
how much money and time they spent trying to figure out what was happening 
to their process (was the antioxidant that is added to the oil not working 
any more?).
The thing is, finally someone saw the light: the claims of the clients 
started after some sales record was attained!  The first thing I thought 
when I heard the story was: "this guys overstocked their clients and they 
couldn't sell all that product before it got old".  But that was not it, or 
at least was not all of it.
As you have seen in potato chip bags, they're full of "air".  Well, it is 
not actually air but nitrogen, because rancidity (oxidation) happens in   
precence of oxigen, so when nitrogen is inyected to the bags, chips don't 
get rancid.
But salespeople wanted to sell more because of this incentive they were 
offered.  And they managed, I don't know how, to sell a lot that month(s). 
 But they had a restriction: there was not enough time to make it to all 
the retailers, comming back and forth of the factory, or there was not 
enough room in the trucks in order to fill them with more product.  So what 
decide to do was to prick with a neddle all the bags, so they could fit in 
the truck!! And that's why the product was becoming rancid.
Two things I can get out of this story.  The obvious one is about 
incentives: people do whatever they can do (even if it's in detriment of 
the system as a whole) to win, and management can't see as far as to 
visualize that incentives have their side-effect even if it is distant in 
space and time.  And the other thing is, people from sales department are 
the ones that get the product from the factory to the client; they should 
be taugh about their product, and about how important it is for them to do 
what they have to do in order to get the product to the client in perfect 
conditions.
But I can hear managemente saying: "Nah! all they need to know is they're 
going to be paid for how much product they sell".  Talking about management 
abdication.

Regards.

Cynthia N.
INVENIA
Guatemala, Central America
invenia@guate.net
Phone/Fax: 5946161
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