Dealing with Silos
What actually are Silos and how are they formed?
In organisational management speakers, silos are departments, teams or even individual sites that work independently rather than together. While overall they may have the same objectivies, these can be interpreted very differently, adversely effecting the work of another area, or making it more difficult. Silos can be historical or cultural - just they way we do thing around here - ‘we don’t talk talk to the factory’, or ‘finance just do what finance do’. Silos behaviour can also be created through organisational structure and geography. In this case study, a co-located supply chain team under the leadership of one supply chain director was split into 5 matrixed teams all reporting to a different director in different locations across the globe.
The impact on operational performance?
The impact of silos should not be underestimated. In our example, each director has slightly different objectives. One has to ensure the factory meets its production plan, another ensures inventory levels are not too high, a third ensures that export orders are fulfilled immediately. Without working together, someone is going to fail. Otherwise an export order comes in, the factory is asked to change the production plan, but there is no inventory to support the additional production. This is just one example, there are tens of small frustrations every day, compounded by the fact that the new structure has no formal forum for discussion to take place between teams. This led to individual frustration, poor decision making and ultimately impacted the customer.
Delivering change
As a functional manager on site with plenty of continous improvement experience I was in a unique position be be able to help the team and drive improvement. I pulled the team together in a workshop, and functionally each team agreed on their top 5 frustrations and presented them to the rest of the group. Interestingly, but perhaps not surprisingly there was a lot of overlap, and as a group we then used an affinity diagram to group ‘like issues’. This created six categories including improving communications, the design of an improved quotes process for export markets and improved ERP system housekeeping. Using a multi-vote system we prioritised the issues in terms of effort required to fix and ultimate payback.
Team building while delivering operational excellence
The teams then split cross functionally. This was by design. By working together on improvements, every voice was heard, relationships were build and communication levels increased, all while delivering tangible process improvements. The team delivered a recommendation for the recruitment of a master data manager (since acted upon), a work shadowing program to increase understanding of the full supply chain for individuals and a daily standup meeting for the whole team to share daily priorities and updates. They also delivered improvements to the quotes process directly improving export country fullfillment, to the daily out of stock meeting and to the communication of forecast changes. All real business benefits. They were fully supported during delivery and afterwards to ensure that adequate controls were in place and their achievements were recognised.
