Obliterate the Silos in Supply Chain Management

One of the biggest challenges facing organizations today is operational silos that prevent companies from acting with the speed and agility necessary in today’s volatile, consumer-driven marketplace. This is critical because those who cannot keep up with fast-changing customer demand will lose customers and market share.

Following classic management principles, most companies are structured into divisions, departments, locations and other groupings based on product, function and/or geography. While this makes a lot of sense from a financial reporting and people management perspective, it significantly hampers the flow of work across these organizational boundaries.

Perhaps nowhere are these silos a bigger problem than in supply chain operations where materials, parts, goods and information flow across vast networks of suppliers, manufacturers, distributors and customers. And within organizations, products and/or information flow from planning to procurement to receiving to manufacturing to distribution to logistics. It’s all about the flow.

Unfortunately, supporting systems have been built in silos as well – planning systems, procurement systems, manufacturing systems, distribution systems and transportation systems, for example. While these systems may pass information from one to another, it is sort of like the old party game where the first person in a chain passes a message to the person next to them, who passes it on to the next person, and so on until the last person in the chain receives a completely garbled version of the original message. Of course, that is just a game and nobody cares about the errors in translation. Not so in supply chain operations where errors cost money, slow operations and reduce service levels.

The problems within functional silos can go even deeper. Often an employee will have to work with multiple systems to complete their tasks, for example, working with demand planning and inventory optimization systems, or with fulfillment and transportation systems. Not only do they have to access separate systems, typically with different formats, naming conventions and user interfaces, but they also must navigate to the proper screens to continue their work, hoping the necessary data was interfaced correctly or faced with having to re-enter the data. This is both time-consuming and error-prone.

But what if the associate could simply follow predetermined workflows across multiple systems based on their role and the task they were performing? The data would automatically flow with them from a common database and there would be one common user interface. There would be no worry about re-entering or interfacing data (which is a major cause of data accuracy problems), no need to access multiple systems, formats and user interfaces, and no lost time navigating to the right screens before they can continue their work.

If this sounds too good to be true, it’s not. Check out the role- and task-based workflow capabilities built into JDA’s advanced supply chain platform JDA eight. It obliterates the silos to improve productivity and throughput, reduce errors, and make supply chain operations more agile and responsive – exactly what is needed to succeed in today’s rapidly changing, consumer-driven marketplace.

  4 Comments   Comment

  1. Jimmy Varghese

    Great article! Breaking silos should be the priority for even established behemoths because in the current business environment the edge lies with companies who have nurtured a culture that accepts change. Most often such companies are nimble and have visionary leaders who are not afraid to challenge status quo.

  2. Silos are going to be the death of us all! Even if you want them, no organization can function properly if everything is in a silo because what happens in one department does influence what happens in another. But it should be easy to see the horizontal relationship across your business, which is where silos get you into trouble.

  3. Vinay Mohan Sharma

    Especially in today”s world of Omni-Channel retail, the siloed approach- where each channel is managed independently of the other channels- is the sure fire way to alienate and confuse the customer. There will be no consistency among channels as far as shopping experice is concerned – the single most important objective of omni channel retail- making customer the center of your decisions- will not be met.

  4. You make a great point, Jean. In today’s business landscape of global operations, big data, and fast-changing markets, it’s important for businesses to be flexible and responsive. With that comes the necessity for cross functional teams and open, seamless communication across all departments. I feel that many firms are realizing the necessity of dismantling the silos of business past, but the biggest problem then becomes HOW.

    For many global companies, with divisions, departments, and locations all over the world (not to mention those that were added through mergers and acquisitions), systems have no functionality with others within the same company. Despite leadership’s understanding about the value of having a seamless system that communicates across all divisions and departments, the looming question is how to accomplish that while maintaining current operations.

    The problem is further perplexing for operations which are already backlogged. The first thing that comes to mind in this case is the Department of Veteran’s Affairs. Because of the communication problems between the VA’s systems and the DoD’s, many customers (veteran’s seeking much needed help from the VA) have to wait years in some cases for their applications to be processed. The VA seems so overwhelmed with trying to catch up with processing medical records, that it doesn’t dedicate resources to solving the problem of the silos that exist within each department that inevitably must share the records.

    So again, the question comes to HOW: how do organizations breakdown to silos and create new systems that are more responsive without disrupting current operations? And how do we help those overwhelmed with backlogs to recognize the importance of addressing this problem to achieve long term success (despite aggravation of the backlog in the short term)?


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