Supply Chain Analytics tools and methods open up the opportunity to drill deeper into supply chain data for finding more ways to save money. However, the biggest obstacle to success are organizational silos and the silo mentality. This is because coordination across departments is where the greatest opportunities lie to create efficiency. Data democratization is the solution to this problem of silos in the organization.
Most large companies still work with siloed departments. Each department has little to no idea what another is doing. They usually each drive their own programs without communicating with each other, and they are rarely aligned.
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“An organizational silo, like a data silo, has lots of inputs but few outputs: it’s a people bottleneck. Too often if a business analyst wanted data they had to go to a central analytics team, wait in line, get the analytics team to understand their need, wait a few days for the results, realize that the results weren’t what they thought they’d asked for, and repeat the process until one side gave up. Then when business analysts complain and ask why on earth it could take so long, analytics just says, “There’s a lot of math involved. You wouldn’t understand.””
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“To achieve real-time analytics, companies will need to change that by opening the black box silo and integrating the data with other enterprise systems. Of course, this is the sweet spot for middleware companies like Software AG, whose solutions can open up that data.
This is something enterprise technology journalists typically have not covered because B2B systems have operated in a silo, separated both by technology and by responsibility from other enterprise systems.”
Silos in the Supply Chain
“The silo problem that Nagaraja observes in the technical architecture of companies can normally be found across the spectrum of activities in which companies engage. Catherine Bolgar advises that companies must avoid “the gaps in corporate performance” created by silos [“Silos,” Zurich Financial Supply Chain Risk Insights, 24 May 2010]. She writes: “It takes a lot more for a company to succeed than for each employee to do his part. A company is composed of many opposing interests. Product designers want the best materials, but purchasing managers want the cheapest. The finance department wants the leanest possible inventories, but the sales department wants large stocks in order to sell big orders with a promise of quick delivery. The competing departments are like the proverbial blind men exploring an elephant, each perceiving the animal from a narrow perspective. These management silos can undermine the best business resiliency plans and pose problems for supply-chain and risk management.” “
Good companies break down silos by implementing cross-functional teams. They get the teams working together on supply chain analytics projects. They share data and make it easy to send and receive information. Successful supply chain analytics requires analytic tools and the systems mentality to apply them across silos.