Surely, this is not a new idea. I suggest it is taken too lightly just the same.
A company I helped had a middle aged conservative engineer who had never led anythng in his life. Many said he was afraid of his shadow. They had a productions manager who spent much of his time networking while the workers played quite often. Yes, I changed some of the facts as usual, but the base story is like this.
To find another and trustworthy production manager is time consuming and expensive. So in investigating, I talked to everyone and also to the shy engineer and people who knew him. I found this person had more drive, ownership,and leadership than anyone in the factory.
I got out a scrap of paper and drew a whole new org chart. I listed this shy engineer as the production manager and others filling new roles. Leaders around me said he would never do it. I talked him through it, and he broke records for productivity within two months of starting.
To understand who has the right stuff is not easy. It takes focus and creation of safety to get their deep thoughts out on the table. You must have a proper vision of what a production leader needs. It is not technology by the way. They can learn it quickly enough if they work there. The key point in the cross department promotion from within is understanding the teachability of the individual. This man was a decent engineer, but he had so much more to offer. No outside hire could have done better, and the price might have been double.
So this gets to another way to get the right people in the right spot. Do you have a career development plan worked out for all your people? Have you gotten it from them and helped them think through it? That will get you on the road to getting people in the right place. Spending time to actively listen to them can help you do the rest. Many people have skills that we are not using and desires that we are not tapping. Lets go find them,