Are Silos The Root of All Evil? | Bill Waddell thinks so

See on Scoop.itlean manufacturing
“Functional silos – the idea that all engineers have to work in an engineering department, all sales people have to work in a sales department and all procurement people have to work in a purchasing department – represent the over-arching deficiency in just about all companies.  They are at the root of enormous amounts of wasted time and money and they are at the root of most lousy cultures. ”

Michel Baudin‘s comments:

We all know bureaucratic horror stories associated with functional silos, like the manufacturing company where Sales, Engineering, Manufacturing and Accounting all had different product nomenclatures. Not only did they have multiple names for the same products, but they grouped them into families differently, so that it was impossible to get aggregate measures of anything.

In light of this, it is tempting to just dissolve these departments and reorganize along the lines of what Wickham Skinner called “focused factories,” Hammer and Champy “business processes,” and Womack “Value Streams.” The idea has been around a while.

1996 Ford Taurus

1996 Ford Taurus

According to Mary Walton’s account of the development of the Taurus 1996 in Car, this is what Ford did at the time.  and it cut the development time down to 30 months. According to Sobek, Liker, and Ward, however, this is NOT what Toyota did, and it was developing cars in 24 months with functional departments exchanging memos!

1996 Toyota Camry

1996 Toyota Camry

In addition, the Taurus 1996, while undeniably an artistically unique design,  did not set the market on fire and included body parts that were difficult to stamp out of sheet metal, Walton’s book suggests that the marketing and manufacturing members of the team, having completely transferred their allegiance to the team , failed to make it give due considerations to the needs of the groups they came from.

This suggests that, while often a good idea, collocating all the participants in a business endeavor and breaking all the functional departments is not a panacea.

Sometimes it is technically impossible, because, for example,  the functional department is operating a monumental machine that you don’t know how to break down into smaller units that could be distributed among different “value streams.”

Sometimes, you can’t do it for operational reasons. For example, you don’t distribute Shipping and Receiving among the different production lines in the same building, because it would require more docks and access roads, and it would make truck drivers deliver to different organizations at multiple points around the same building.

Sometimes, you end up having specialists report to managers who have no understanding of what they need to be effective, and can’t evaluate their requests for equipment, training, or permission to attend a conference.

Sometimes, you locate an engineer who needs a quiet space to concentrate on technical issues next to a boisterous sales rep who speaks on the phone all day…

Unfortunately, I don’t think all evil has just one root. It’s a bit more complicated.

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5 comments on “Are Silos The Root of All Evil? | Bill Waddell thinks so

  1. In IT it is true that delays between silos is a great waste. Conditioning to communicate through documents makes it difficult to turn around. The Kanban Method could be a tool to de-condition and introduce humanity.

    • How would you like to maintain undocumented software? Coding is an activity done by individuals each with a keyboard, a mouse, and a screen. Coordinating the efforts of even a small team of software developers requires administrative discipline for revision management and communication through documents about the code.

      “Kanban,” as used by software people, has essentially nothing to do with the tool used in production control as part of Lean. It is really a repackaging of the ScanCard system from the early 1980s.

  2. The real danger of silos is that the very concept of silos disrupts and blocks the sales order to manufacturing process to customer alignment. Although each silo function has their own requirements they should be aligned so that the customer is more important than the function they perform. This especially true in Engineering and Human Resources functions. In my opinion, Voice of Customer and Servant Leadership are the best way to reduce the negative impact of silo organizations if they can’t be designed out.

  3. Comment on LinkedIn:

    Silos (can) even create differences in culture within the company itself. The sharing of information and perpectives adds value and understanting of the big picture and the realization of the true mission as a whole. The understanding of the effect of actions of one dept. on the other, the input that (could) greatly improve the reasoning/process of the other…all for the better of the (one) cause. Cross-functional capabilities within teams creates a whole new perspectice and dynamic. Mix it up and talk to each other. Insurance: Invite a claims guy (person) to a sales meeting or vice versa…

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