As supply chain organizations grow increasingly complex, many workers are serving in highly specialized roles. In that environment, the inclination can be to keep everyone operating in their lanes, focused on narrowly defined responsibilities.
However, companies following that game plan will struggle to innovate, according to experts. Instead, they say, companies should choose a different path and pursue close collaboration across departments to tackle the most difficult challenges of today’s sophisticated supply chain. Using crossfunctional teams and other collaborative efforts, companies can turn internally to unlock fresh perspectives that create unexpected value.
Mary Dalrymple, director at Eagle Hill Consulting, said bringing new viewpoints to problem-solving—enlisting team members to consider questions outside of their areas of expertise—leads to innovative solutions and helps organizations strengthen their performance and culture.
“Breaking down silos and considering how information flows and how knowledge is shared throughout an organization is essential, especially now in a hybrid work environment,” Dalrymple said. “Designing intentional organizational structures and operating models that facilitate a cross-pollination of ideas is key. Organizations that can do this well at an enterprise level will come out ahead of their competitors.”
Melissa Hadhazy, senior client partner with Korn Ferry, said cross-department collaboration and information sharing is the only way “to truly leverage the data available today for end-to-end supply chain strategy and decision-making.”
“Functional silos do not hold the complete information set necessary to understand the full impact of disruptions and changes to operations; communication and collaboration is critical for success,” Hadhazy said. “Companies that have this figured out can make more agile and quick decisions, improving time-to-market and overall costs.”
A cross-functional team offers enhanced access to diverse perspectives, broader skill sets and new ideas, according to “The Transformation Myth: Leading Your Organization Through Uncertain Times,” a book published last year. In particular, the book’s authors said in an excerpt published on Deloitte’s website, these teams increase “the ability of the organization to sense changes in the environment and respond quickly to them.”
“As companies face a novel business environment, they need opportunities to try new things to determine what works in that environment,” the book’s authors wrote. “Cross-functional teams allow the company to test and learn in the new environment to help find ways to respond.”
That thinking is behind Ford Motor Co.’s strategy of broadening access to artificial-intelligence development tools to non-IT professionals in hopes that they will find ways to use AI to address an array of pressing challenges, including those related to the supply chain. The solutions that sprang out of the effort include a machine-learning model built by a logistics team that is designed to streamline the shipments of parts to Ford’s plants around the world, according to an article in The Wall Street Journal.
Cross-departmental collaboration helps keep teams and team members from settling into ruts, while also expanding their understanding of their organization and its full context of opportunities and challenges.
“There are information silos and groupthink that happens within functional areas, but cross-functional integration and managing projects cross-functionally—meeting and exchanging information and ideas across functional areas—is a huge learning opportunity for organizations internally,” said Daniel Pellathy, an assistant professor of management at Grand Valley State University.
Pellathy said cross-functional collaboration becomes particularly beneficial “as supply chain folks move outside of traditional supply chain domains.” Staff members from different areas may work together in some functional way already, but until they collaborate in a meaningful way, they likely will not understand their colleagues’ point of view.
“These are huge learning opportunities for employees, as well as managers, to really understand what’s going on in the business, and how what they’re doing in their area impacts the broader goals of the organization,” Pellathy said. As an example, Pellathy pointed to the potential benefits of increased collaboration between supply chain and finance staff.
“Supply chain folks typically have had quite a lot of in-depth operational type of training and experience but are less adept at translating that operational stuff into a financial language that then is resonant with the higher echelons of an organization, such as your CEOs or CFOs,” Pellathy said. “To the extent that supply chain folks can then integrate and interact with folks from the finance and accounting departments, they gain that ability to translate and see the connection there between the operations and the numbers. And then, conversely, on the finance side, they better see the connection between the numbers and the operations. So, it strengthens both of them.”
Hadhazy said that companies that employ cross-department collaboration can respond to disruption more quickly and effectively.
“For example, integrating finance and sales into alternative supplier mitigation planning (to prioritize supplier options should a primary be unable to meet demand) can uncover additional risks like customer perspective and regional financial concerns, before decisions ever need to be made,” Hadhazy said. “Therefore, when the potential risk becomes a real-time disruption, key players are already identified and decisions can be made considering the overall impact to the brand and company.”
Pellathy said cross-department collaboration can make team members more likely to make decisions within their silos that are geared toward the success of the entire organization rather than just their department. For instance, he said, a purchasing manager with experience on a cross-functional team may choose to buy a product at a higher price than other options because they understand that it will lead to lower overall costs and better support the larger logistics network.