As global supply chains become more complex, the associated demands, challenges, and costs of managing the supply chain increase. The typical functions that make up a supply chain encompass the areas of procurement, logistics and production management, and many more.
Often, supply chain partners have a wide breadth of responsibilities, demanding cross-functional collaboration across the entire organization. Routine tasks can become overwhelming due to information silos between different supply chain functions. These silos can lead to loss of efficiency through duplication of efforts, inefficient communication channels, and subpar processes.
So how do you improve cross-functional processes to ensure information flows freely throughout your supply chain? Target the different types of silos that put your business at risk.
Fear of the unknown stifles experimentation and collaboration in many industries. People are afraid of failure, which could directly result in a loss of employment. This fear ultimately hinders innovation within and around supply chains, resulting in reduced competitiveness, lost revenue, and customer satisfaction.
You have to give teams a clear vision of the goals you want to achieve, then set the stage for them to thrive. Create a culture that rewards critical thinking and collaboration across functions to test new initiatives before deploying at scale. Set up processes for teams to learn from mistakes within and outside their work functions and incentivize them to try again if they fail.
Reward employees who venture outside their comfort zones to engage stakeholders in external departments. The next innovation could come from an external department they have never worked with before.
In organizations, the big picture is not always obvious. As a result, it’s up to company executives to communicate to employees how their job functions interact with one another and affect organization-wide processes.
People tend to focus on their area of expertise or their own set of tasks, hence losing sight of the bigger picture. This focus rings true in small, medium, and large enterprises where managers are more worried about their departmental performance than adding value to the larger organization. It is, however, not surprising since incentives are often at the departmental level.
People may view collaboration as risky in such an environment - this could be disastrous for a supply chain organization where many functions are directly dependent on others. For instance, purchasing teams need complete visibility into supplier relationships to maximize savings.
With organizational silos in place, a beverage commodity manager may not benefit from collaborating with a food procurement manager who maintains a close relationship with a mutual supplier. The commodity manager may not be aware that such a relationship exists. Eliminating the silos, in this case, would offer shared savings for both teams while enhancing the speed of delivery and a ramp-up of the smaller business as a result of a better-negotiating position. It is vital to reward managers who collaborate to achieve improved speed, cost, and other metrics. In doing so, you elevate the strategic status of the procurement function across the entire organization.
Informational silos are a bit different from psychological and organizational silos. Whereas the latter occurs due to a lack of desire, informational silos result from a shortage of data. There is no centralized source of accurate data, perhaps no single source of truth. Hence, people who want to work together cannot because collaboration is too complicated and may result in more work.
Technology can be the answer here. To determine a strategy to eliminate informational silos, it is worthwhile first to determine the organizational cost of the silos. Then you can make the case to engage with a knowledgable supply chain partner to invest in a technological solution that gives a synchronized view of all relevant supply chain data on demand. You can replace multiple non-interoperable systems with one or two that connect departments company-wide.
Supply chain silos can result from various root causes. Fixing the cause of one silo can also lead to improvement in other silos. If you reduce the fear of innovation, you could unlock the doors to rapid technology-driven transformation across your organization. In the end, collaboration across the supply chain drives long-lasting success for you and your customers.
Northfield fosters continuous innovation to transform the global supply chain by providing unrivaled end-to-end global procurement, logistics, production, and supply chain management solutions.
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