Silo Case Study

In many instances, firms have not considered the impact of their actions on the supply chain and its long-term competitiveness and profitability. According to Wisner et al (2006), the “I win, you lose” silo mentality manifests itself in the form of using cheaper suppliers, paying little attention to the needs of customers, and assigning few resources to new products and service design. Eventually, these firms will create quality, cost, delivery timing, and other customer service problems that are detrimental to the supply chain. Cachon (2005), in his paper, describes silo mentality as the most significant barrier to overcome most of in supply chain management. Internally, the silo effect can also be exist among departments. The transportation manager for instance, may be trying to reduce annual transportation costs while inadvertently cause safety stocks to be higher, shortages, and to deteriorate customer service level. In order to overcome the silo mentality, the enterprise must strive to align supply chain goals and the goals and objective of the firm. Functional and decisions must be made while considering the impact on the entire enterprise profit and those of the supply chain.

In a survey result shown that majority said lack of supply chain management skills and knowledge was the greatest barrier within their own organizations, in view the network of company to work together successfully, though, requires managers to use subtle persuasion and education to get their own enterprise and their trading partners to do the right things. The cultural, trust, and process knowledge differences in company are such that firms successfully managing their supply chain must spend significant amount of time influencing and increasing the capabilities of themselves and their