Feature
did a study of its supply chain,
I found that there was a complete absence of this trust between functional areas. The
supply chain department was
insensitive to the demand of the
sales force for a product and
went on feeding wrong information about the availability of the
product. The sales force went
ahead promoting the product.
When its supply was outsourced
from a European country it
was
clear that there was shortThese practices of business excellence have created invisible age of this chemical worldwide.
walls within the political boundaThe net result was wastage of
ries. Each department tries to
money, time, and loss of marcompete with the other -- the
ket. What was surprising here
internal competition leads to a
was that this very chemical was
situation of one-upmanship. This
available in another region where
affects the flow of information demand for the product had deand material through the organi- clined the previous season. The
sation. In a volatile and dynamic trust and sharing of information
environment, the need of the would have increased the velocity
hour is to manage demand by of product movement, and would
planning supply to reduce inven- have reduced inventory in one
tory, both inbound and outbound. place and shortages in another.
biggest hurdle for the firms to
move to more advanced levels
of supply chain gains. Functional excellence was all right
when demand was certain and
the customer lived in the sellers
‘ market. As markets became dynamic, characterised by demand
uncertainty, significant seasonality, short product life cycles, or
high competitive intensity, functional excellence was a hurdle.
There is a need to share the information that each department
has. For instance, the marketing
and sales department needs to
pass on its knowledge to purchase and manufacturing as
well as the supply chain. This will
only happen if each department
has the overall business objectives of the company in mind,
rather than its own performance.
Which means that cross-functional trust and faith are necessary. But often, there is a lack
of trust among these departments. Finally, even though
departments do better individually,
business
suffers.
Here is a case in point: In an
agro-chemical firm for which I
Therefore, companies that organise for functional integration will almost certainly outperform those that organise for
functional excellence. But how
should a company bring about
this
functional
integration?
There is no silver bullet answer
for ways to achieve functional
integration. Rather, one must
address all aspect of a company’s operations, as follows:
1.
Manage the process, not
the function.
2.
Align measurement systems with overall goals.
3.
Use integrating mechanisms such as the sales and
operations planning meeting,
cross-functional teams and the
team problem solving approaches.
Work to develop a culture that
encourages teaming and crossfunctional collaboration. This
can be accomplished through
a variety of initiatives including
mission/value statements, recognition of teaming efforts, and
designing career paths to involve
multi-functional
assignments.
All these will lead to creating a useful information technology architecture. Firms, which have done
this first, have been successful in
integrating information technology with their organisational design and hence reap value and
dictate the industry structure.
Aviation
X JETS CALLS FOR
STREAMLINING OF
TRAFFIC IN REGION’S
UPPER AIRSPACE TO
BOOST REGION’S
AVIATION SECTOR
Such a move could yield an
estimated $16.3 billion in
economic benefits to the
region
X
Jets, a joint venture between Private Jet Charter
and Jet Connections, the newly
established regional company
based in Dubai, has said that
streamlining the traffic in the
Middle East’s upper airspace
would be a powerful catalyst
to the region’s aviation sector.
February 2016
43