Top 10 Blunders #1 – Operating in Silos

Far too many organizations operate on a functional basis.

Transportation, inventory management, and order fulfillment activities are housed in different departments and managed independently of each other.

Decisions are based on what is best for the function, forecasts are made independently, and metrics target functional optimization. This leads to conflicting strategies, executing to different plans, and poor coordination of processes. Ultimately, product flows are impeded, and suboptimal performance is achieved.

To set the stage for cross-chain collaboration, produce companies must break down these internal silos. The individual functions must be organized under the guidance of a single supply chain leader and the focus must shift toward process excellence.

Under this configuration, a single forecast or plan can be developed to drive integrated planning and decision making. Logical tradeoffs can be made between functions to ensure overall performance is optimized.

A collective focus on delivering value will emerge where cost efficiency and effective service priorities are balanced.

This is an excerpt from the most recent Produce Blueprints quarterly journal. Click here to read the full article.

Dr. Brian Gibson is executive director of Auburn University’s Center for Supply Chain Innovation and a former logistics manager. He is coauthor of Supply Chain Management: A Logistics Perspective (10th ed.) and active in supply chain executive education, research, and consulting.