Silo Mentality will hold back any company, but for Supply Chain oriented companies it can be a death sentence. It is a term we are all familiar with, but many of us in the Forecasting, Demand Planning and Supply Chain fields don’t recognise that we are actually victims of it.
The implication for the functioning of the whole company is dire. In general, the Silo Mentality, with its inward looking thinking and behaviours, causes each department to act as a separate unit with different goals and their own perspectives on the business. The Silo Mentality is not so much an attitude we adopt, it is the default mindset and becomes so ingrained that it requires a massive cultural shift to change it.
Now, having different perspectives on the business is not such a big issue, I’d even say that it is an advantage as having another point of view or different ideas can be fuel for further development. The fact that it can be positive, however, doesn’t mean that it will be. These ideas have to be exchanged between people and departments, and understanding other perspectives is necessary for constructive relationships. Too many times internal resources are used to overcome internal obstacles, caused by lack of information exchange. Only when each party is aware of others’ needs is full synergy is possible. Awareness of other departments’ goals, mindset and personalities is therefore crucial.
It is crucial to establish communication channels which allow the clear presentation of common goals
The Power Of Cross-Functional Teams
Here is the place where cross-functional teams can be very useful. Their role is to gather information from different areas of the company, and develop procedures to implement solutions supporting the whole business from forecasting to marketing to production etc. During that process, it is crucial to establish communication channels which allow the clear presentation of common goals and how they can be reached. Achieving collaboration in such teams means individuals have to commit to cooperating, and of course soft skills are welcomed.
Nobody Else Will Take The Cross-Functional Lead, So We Must Step Up
Forecasters and Demand Planners are typically highly analytical, and often intensely so. There’s an irony that the team in the business that most needs to be collaborative and communicative is often not best equipped to do so. But this responsibility falls to us as we hold the knowledge to bring all functions together and bring the most out of them. Therefore, we must combine analytical skills and soft skills; only then can we bring the company closer to the desired goal.
Just because we think something is important, doesn’t mean it is important for anyone else.
Empathy Is Key To Aligning Goals
Understanding others is a crucial point. Let’s imagine that we as team want to define a common goal, one that applies to all functions. Let’s imagine that we decide what we want to do without liaising with other functions. We will be lucky if this goal coincides with just one goal of one department. Just because we think something is important, doesn’t mean it is important for anyone else. For example, getting updated sales data is valuable to Demand Planners, but how do you communicate the value to Sales teams? If they don’t see a benefit for themselves, they won’t fully engage. Sure, we can define the goal and tell other departments we will work towards it, but if there’s no clear benefit for other departments, it will never be achieved. The situation is different when the direction in which the company wants to move is defined and established by top management, and the methods to achieve are supported from the bottom up.
It’s Up To You To Make The Most Of The S&OP Meeting
The question is how to create the framework where a common goal can be specified, where free exchange of ideas can be mutually supported and each side has active participation in the process. The obvious forum for this is the S&OP meeting and, more importantly, the pre-S&OP meeting. Why should we focus on the pre-S&OP meeting? As we experienced at Rotom, a European-wide manufacturer of logistics equipment, regular meetings proved very useful, providing insights into the day-to-day work of other functions.
When we started, we wondered how often these meetings should take place. I think that there is no one answer to this question. It depends on the specific conditions in which company is operating – in our case weekly scheduled meetings are preferred but at the same time, we have a lot of informal meetings between people from different departments to solve ad hoc problems as and when they occur. It doesn’t matter what you call these meetings, but make sure they’re regular, structured and provide opportunities to share ideas.
Work culture, expectations and environment are created by senior management.
Getting Out Of The Silo Means Support From The Top
During these meetings we can easily exchange our ideas and put all issues on the table that each team is facing, for example Sales shares customer expectations and we receive feedback from Operations and Logistics. A crucial benefit is that these solutions are agreed on with the full input of each member so everyone feels that they have real impact on the functioning of the company. What is also significant is the active encouragement and support we receive from top management, because we have to remember that work culture, expectations and environment are created by senior management. They can foster behaviors which will allow the rest of the company to build an atmosphere of trust, where information are exchanged and discussed. Once that is achieved, all functions will be more willing to engage and help you work towards your goal.