awamienews | A business planning process involves several departments. Demand planning and supply planning are two examples of supply chain planning. Supply planners are responsible for planning the product supply, while demand planners predict their demands. Other departments may include procurement, logistics, sales, etc.
To forecast demand, planners of demand can collaborate with marketing and sales departments. To meet demand, the supply planners should work closely with departments such as procurement, logistics, and others. Departments must work together to gather information to support accurate and timely decisions.
But the truth is far more complex. Some departments do not share information. Silo is the term we use to describe the inability of departments to communicate with each other.
The original meaning of the word “silo”, was a large, circular container for storage. The word “silo” is now used for separate entities which pile up data without sharing. Business silos, or organizational units, are those that work independently without sharing any information. Silos are characterized by a refusal to exchange information between employees from different departments within a company.
Silo’s occurrence is a mystery.
Silos can exist for a variety of reasons, including long processes to collect and share data, inability to communicate with other parties, lack of communication, limitations of the system, etc.
Most often, silo mentality stems from top-down competition among managers. This repressive attitude toward information sharing is exhibited by the top management, which then spreads to subordinates. Individuals who are hesitant to share information may do so for their benefit. These patterns are seen between departments such as sales and marketing.
Silos can be a reflection of a narrow view, in addition to the clashing interests between managers. They are so focused on the daily task that they don’t see or understand how their contribution fits into a larger context. Sometimes they don’t realize how valuable the information is to others.
No matter the cause, senior management is to blame for a “silo” mentality.
Silo Mentality and its Consequences
Silo mentality harms a company. It damages corporate culture, processes, and efficiency. Information isn’t flowing easily across departments, which can affect workflow. It can lead to some departments having outdated and inaccurate information.
Combining silos with inefficiencies that result from other operations, these hinders the ability to offer value to your customers. They also hamper profitability. Silos can depress morale. This is especially true when the employees realize that there are problems but have no way to fix them.
How can you address the silos of business planning?
The managers of successful companies encourage the departments they manage to openly share ideas and insights, to run their business smoothly. Usually, these solutions are offered by vendors who offer the cloud platform to their customers. These platforms can also be referred to as integrated business planning platforms. They will also help organizations to stop being harmed by silos.