- Silos, or communication gaps, make it harder, to convey demand changes to suppliers. They can lead to poor supply visibility, weak innovation and collaboration, and higher risk of unexpected problems.
- Companies typically suffer from three types of silos: psychological, organizational, or informational, according to Supply Chain Digital.
- Addressing the roots of a single silo — such as lack of data for informational silos or fear to relinquish control for psychological silos — can lead to a ripple effect where the negative impacts of the others are also mitigated.
Supply chains require the efficacy of every link in the process, but the silos mentioned by the author (an SAP Ariba marketer) can cause disruptive miscommunications, both within the organization and with suppliers.
In the long run, miscommunications are more costly than the efforts required to address them: for example, procurement offices may discover overlapping interests and join forces to negotiate better deals.
To clear these barriers, the writer suggests first recognizing the type of silo, then clearly articulating expectations, fostering innovation, encouraging collaboration and adopting information-sharing technology.