About a month ago, Trevor Miles at The 21st Century Supply Chain wrote a great entry called "Measuring Supply Chain Effectiveness." In it, he discusses some of the finer points of the problem he refers to as "silo mentality." Simply, silo mentality is the frame of mind in which people in different sections of a company not talking to each other, and operating more or less independently. He goes on to explain the importance of making sure that different departments of a company are actually talking to each other, it's a great read, and I highly suggest that when you're finished here, you head on over.
While Trevor did, I think, a great job explaining the importance of creating understanding between Operations and Finance in the macro sense, the importance of their understanding in the micro sense was left un-discussed. As we all know, even a slight and seemingly insignificant problem can have huge impacts on your total operation. So while it might only seem like a hiccup when you look at the micro scale, over the course of a year, that little hiccup can cost you enormous amounts of time, energy, and money. This is an easy enough concept to understand, certainly. But showing it? That's a different problem.
Obviously, seeing a problem a week after it has happened is too late. By then, its probably done two things; First, it's done the damage it's going to do, and secondly, it's "fixed" itself. Or more than likely, it's simply run it's course. And seeing problems at the end of the day aren't much better. Damage has still been done, and there's little you can do to reverse that. Certainly, the best solution would be for us to become omniscient beings so that we can see and do everything in our company. Unfortunately, we are merely human, and can only react.
The best thing then, it follows, is to remove reports in the way we know about them now. Reports shouldn't be something that's recorded for a week then sent to us. We need information. And we need it now. Not next week, not tomorrow, not in an hour. Now. Real-time reporting is the only way to make sure we can react in the fastest way possible. We minimize damage done by mistakes, and can adapt quickly to changes.
Creating real-time reporting also presents itself with a fascinating opportunity, one that ties in very well with Trevor's concepts, creating a system of metrics that the entire company understands. Not just executives and vice presidents, everyone. This allows anyone to become aware of, and act upon, any problem or change in your operations. Not only does this get rid of "silo mentality," but it goes a step further, and allows anyone to actively become part of the solution to any problem. This is the only real solution to the communication issue, a common, easy to understand language for the company.
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