In recent blogs we have talked about how S&OP is a highly social and collaborative process with simple steps. As we work with clients we noticed how customers tend to focus on the steps but not necessarily on the social aspect of the process.
Organisations sometimes miss this, especially those where functional silos are deeply ingrained. Businesses, regardless the size face multiple organisational challenges, internal communication is one of those challenges not just translated within hierarchical lines, it goes across functional boundaries where organisational stagnation tends to be more prevalent.
But how can we break the silo mentality? On this blog we tell you how to break down silo mentality within your organisation and how S&OP helps you to break those barriers.
1) by Creating a unified vision of collaboration: S&OP by nature has an objective to break down silo barriers, as its primary goal is to create one business plan, and one set of numbers. Because S&OP drives collaboration to create one organisational plan of execution, then it is no longer just about departmental plans: the finance plan, the HR plan, the inventory plan, the production plan, and the engineering plan. Is about one absolute plan driving business performance based on customer demand. Silo mentality begins with management behaviour. In order to break down the silo mentality, department leaders must have the vision and the belief that a free-flow of information will help the entire organization. S&OP opens the channels of communication by ensuring this flow of information exists. By establishing an S&OP standard operating process; stakeholders know their role in the process, what inputs they bring to each of the stages, the outputs and more importantly what information will be shared. Under an S&OP process there is no longer an individual department goal but a unified goal.
2) by Working toward a common goal: A common problem of silo mentality is that people see things from their perspective and they are likely to make choices that protect their department rather than protecting the company as a whole. To combat this challenge, each person in the organization needs to work toward common goals. When people across the company have the same objectives, they are more likely to communicate better. Working together breaks down barriers to cooperation, communication, and collaboration. When companies give their employees the collaboration tools, people will share information and work more efficiently toward the common goals. Each department, whether it is operations, engineering or supply chain is there to achieve a purpose. Stakeholders in the process have to have a clear purpose, a defined role and a strong understanding of what is to be achieved: a common message. When the entire organization seeks to understand each individual department and the specific issue they face, departmental goals can become the goals of the entire company.
3) by Educating, working, and training together: When the change is managed properly and the message is clear, trust and commitment is built. One way to break down silos is to educate, work, and train together in cross departmental exercises. S&OP process calls for levels of commitment and communication with different functions. S&OP demands for people to work together. When people work near one another, they build rapport and relationships. Proximity builds understanding. Building trust is a key enabler for S&OP to succeed, and the most significant need is seen across functional boundaries. We have found out that when executive leadership are trained together on S&OP; goal alignment and what is required to achieve by the process implementation becomes clearer and it's easier to communicate to stakeholders. When the change is managed properly and the message is clear, trust and commitment is built.
This is plainly recognised as the cycles of S&OP mature. By the 2nd and 3rd full cycle you start to see the changes, interdepartmental silos are diminished, for example sales leaders start to see how their activities impact operations and the supply chain and vice versa.
4) by Fostering open communications: Effectively the goal of S&OP is to eliminate resistance to share information, this action itself will eradicate silos and silo mentality. In fostering collaboration among the different teams such as sales, operations, engineering, finance, sales, and marketing, organizations will be able to make better-informed decisions, serve customers better, and ultimately, increase sales. This communication in itself is very powerful, the answer is not to breakup functional structures, the goal is to strengthen the communication, establish a frequency and be clear about what you wish to achieve, and this will be developed organically as S&OP maturity increases.
5) by Driving the use of common tools: Resistance to share information from others in the organisation occurs due to organisational inefficiency or simply because people don’t have the appropriate collaborative tools to do so. One way to increase team collaboration is for the organisation to provide useful collaboration tools that facilitate information sharing. S&OP drives the use of collaborative tools on each of the phases, from demand to supply. When businesses can correlate information within the company, the entire business will benefit, thus the purpose of S&OP. Some companies use CRM, ERP and social apps to support their S&OP process, there is no wrong answer, we suggest using tools that will facilitate the flow of information and allow teams to be more effective.
In summary the S&OP process helps organisations to define a unified vision of company goals and how to execute the establishment of common goals. S&OP structure and communications strategies will then support your orgnisation to transform your organisational culture from damaging silo mentality into a culture where there is division of labour but not division of information.
Contact us if you like to know more.