Tag Archives: Business Silos

The global supply chain is a delicate framework in which every participating business needs to stay nimble and adaptable — because, as we saw during the pandemic, one singular event can throw a wrench into the entire system. Innovation and optimization need to be top of mind.

But what qualifies as effective optimization? Given the complexity of the flow of goods, cash and information between multiple producing, storage, delivery and consuming partners, companies can easily neglect key areas, or focus too hard on others. Disruption anywhere along the supply chain line can (and does) create major headaches, stifle throughput and force manufacturers into a dance of optimizing supply and demand.

We can help with that. At USC Consulting Group, we’ve been helping companies optimize their operations for more than half a century. We’ve learned a few things along the way. Here are some important do’s and don’ts for optimizing your supply chain. It’s about helping your business through the ongoing disruption and preparing it for unforeseen events in the future.

Don’t: Use outdated systems

There’s a tendency for many businesses to take an “if it ain’t broke, don’t fix it” approach. However, just because something is working in real time doesn’t mean there aren’t improvements to be made. In today’s data-rich environment, one of those improvements involves data analytics.

Outdated inventory systems, suboptimal communications and disconnected information are some of the biggest areas that hold an organization back. The limitations of legacy technologies thwart the goal of end-to-end transparency along the line and impede rapid-response decision making. Before you know it, you can end up in a data-rich, intelligence-poor environment. It’s so common a scenario now, there’s even an acronym for it: DRIP. Aptly named, because the potential power of all of that data is dripping down the drain if you’re not equipped to use and interpret it.

Do: Use SIOP

Sales, Inventory, and Operations Planning (SIOP) is a method we use here at USC Consulting Group that emphasizes inventory as a strategic tool to allow businesses to get a better look at their operations and formulate superior strategy decisions.

SIOP takes advantage of the wealth of digital data available to business owners to gain a strategic advantage. Having the ability to capture, analyze, integrate and interpret high-quality data is the key to staying ahead of the market. The aim is to achieve process automation and glean predictive analytics, which allow you a clearer look at your operations to make better-informed decisions.

Don’t: Segregate internal planning and communications

Silos! How often do we hear about the dangers of silos in businesses? It’s the concept of departments working separately, having poor communication and perhaps duplicating or negating each other’s efforts. We like to identify it as “the left hand doesn’t know what the right hand is doing.” Any way you refer to it, segregating internal planning and decision-makers leads to trouble in your supply chain.

These systems separate workers into independent subsections with little to no visibility between external partners. These separate groups work in their own ecosystem, unable to effectively communicate with other departments or relevant groups. This not only slows an operation down, but extinguishes any potential spark of collaboration or innovation that may arise from working in conjunction with each other.

Do: Increase information flow

Uncertainty in the supply chain is caused by disconnected information. A truly effective and innovative workplace allows all relevant personnel to communicate with each other.

Internally, abandoning legacy email and phone methods of communication in favor of end-to-end, 3-way knowledge sharing and open social platforms speeds up collaboration and enhances efficiency. Externally, keeping a concurrent, continuous and completely open demand plan is essential for maintaining healthy, profitable business relationships.

Enhancing communication and information flow internally and externally is another key for staying ahead of the curve and fostering innovation for supply chain businesses.

Don’t: Test out a new system on a limited basis

There can be hesitation for a business to roll out a new system, opting instead to test it out in certain departments or methods of communication. This can be a mistake.

Without full implementation, a business never sees the full power and potential of a new system and will be quick to abandon it in favor of the legacy methods they have been operating with for years. The right system can revolutionize operations on all fronts, from internal communication to vendor relationships to future workplace innovations. Without every aspect of a business running on a new method, a business owner may never see the full payoff.

Do: Find a trusted method and go all in

While there certainly are challenges with implementing a new system, it’s important to find a trusted method and go all-in. For example, let’s look back at our SIOP system.

Different areas of a business have different roles and objectives. Sales is eternally optimistic, operations wants to know precisely what is going to be produced and shipped, purchasing makes conservative commitments to suppliers, and finance has to predict performance and cash flow. Getting everyone pushing in the same direction for a system change can be a daunting task.

We have found that SIOP works optimally if your entire enterprise uses it. If you allow a facility, business unit or a customer team to continue to operate outside of the SIOP process it will undermine your efforts. That is why it’s so important to get everyone on board for a new process to truly see the difference it can make.

At USC Consulting Group, we’re dedicated to helping our clients weather any storm, including the kind of supply chain tsunami we’ve all experienced recently. Give us a call today to talk about how we can put our expertise to work for you.

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We’ve all heard the term “silo” used to describe insular work groups. Organizational silos may be high functioning within themselves, but they don’t communicate very well with the outside world… or even with the team on the other side of the building. Silos occur within organizations and they can bedevil your supply chain and overall business performance.

Some people say the term arose out of the Lean movement, which may be true, but we think an even older phrase describes the typical silo perfectly: The left hand doesn’t know what the right hand is doing.

Why organizational silos are so bad

There are several types of silos that can strain organizations. Some, frankly, stem from leadership. If the top brass isn’t encouraging the flow of information, collaboration and teamwork, or if shift leaders don’t talk to each other as shifts change — leaving the second shift to reinvent the wheel — you’re going to have trouble. Without strong leadership, departments can set goals that may conflict with each other.

Similarly, organizational culture can cause teams to insulate. If, for example, the workplace is hyper competitive, silos won’t just develop, they will be deliberately built as people choose not to share information and best practices.

Data silos aren’t so much about people, but information. This happens when information is collected and stored by departments, but not shared. One very easy way to think of a data silo is to think about law enforcement. Until rather recently, criminal records and other vital information was stored in individual precincts’ computer systems, with departments in other states, or even across town, not having access to it. Any time your organization has data that isn’t accessible to other teams, it leads to inconsistent decision-making.

Some common problems caused by siloed teams

Silos thwart efficiency, productivity and in some cases, even safety. But the problems they cause can burrow even deeper than that, eroding your trust between teams both inside and outside of your organization.

Decreased supply transparency. Managing a supply chain requires accurate, real-time data. Your supply chain team needs to know the who, when, what, where and why. When you’re in a silo, that information may not be conveyed. It can lead to increased risk and inaccurate forecasting.

Groupthink. Insulated teams tend to be very well aligned. There’s a lot of agreement without much pushback. This is a risky situation called “groupthink,” and it occurs when a group values harmony and conformity, striving for consensus at the expense of their own opinions. Silos are ripe playing fields for this phenomenon.

Less innovation. When everyone is thinking the same way, it doesn’t leave much room for big ideas… or any new ideas. Innovation in the supply chain needs to involve every part of the process.

Tepid collaboration. Insular teams don’t collaborate with other teams, which weighs down the quality of the whole organization.

Duplicated work or job redundancies. This is one of the biggest enemies to efficiency. You may have two teams working on the same thing at the same time, perhaps even getting different results. Or people on different teams with the same roles. It adds bloat to your bottom line. And this goes for data, too. You’ll increase your IT costs by storing duplicate data platforms and information.

Contrasting processes and systems. It’s difficult enough to get your organization into “well-oiled machine” shape with all processes and procedures flowing as they should if you don’t have siloed teams.

Eroded trust between teams. When teams aren’t sharing information and working together, it’s very easy to slip into an “us” and “them” mentality.

What to do about it

Recognizing you’re dealing with organizational silos is the first step. Now what? Here are some simple actions you can take to start breaking down those silos.

Reward innovation. Encourage people to take a look at departmental processes and procedures and suggest changes. Is there a better way to get the job done?

Create interdepartmental collaboration. Create a team made up of people from several departments and seniority levels. Task them to work together and share information in order to solve a problem or create an initiative that affects the whole organization. You can start very small here. This doesn’t have to be revamping entire processes. It could be creating an interdepartmental team that is in charge of diversity and inclusion efforts. Or a team that takes an objective look at your company’s brand (the way suppliers, vendors, customers and even job seekers view you) and offers ways to boost it. Or creating a series of Lunch and Learn programs in which departments share best practices.

Rethink reward structure based on departmental performance. This might be a tough nut to crack if this is the way your operation has always done it. But few things encourage silos more than departmental competition. Instead, reward your managers and supervisors for the performance of the organization, and even for information sharing.

Organizational silos erode efficiency, which in turn can bog down your processes and ultimately your bottom line. Breaking down those silos is the first step toward greater collaboration, efficiency and profitability. Contact USC Consulting Group today for help improving communication across your divisions.

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