Despite attempts to break them, functional silos live on
By Brian Milligan -- Purchasing, 11/4/1999
Teamwork. It's something that just about every organization strives for, but few achieve.Companies are taking steps to get different departments to work together effectively, but they're still falling short of the goal, according to the results of a recent reader survey.
And while most purchasing professionals agree that cooperation and communication are the best mechanisms for getting different corporate functions to work together, they also point out that neither attribute exists naturally in a corporate setting. In fact, some say that unproductive human traits--bad attitudes and personal egos--are blocking different departments from gelling.
But one thing that all survey respondents seem to agree on is this: Teamwork is good. With it, companies can gain a major leg up on satisfying customers and beating competitors in the marketplace.
"Marketing must determine what the customer wants, materials must support it, production can make it, and then sales can sell it," says Philip McCartney, purchasing manager for the Ohio-based Ferro Corp.
"[Teamwork is] necessary to attain and optimize bottom-line results," agrees Dennis Wright, purchasing manager for Elkem Metals in Ohio.
But getting teamwork to actually happen is another thing.
Good signs, but not enough
Survey results indicate that while there are good signs of cooperation between corporate departments, many companies are not doing enough to foster it between purchasing and other functions. Even worse, many survey respondents say their companies' efforts are actually counterproductive.
"There's too much competition among departments," says Ronald Blizzard, material administrator for Massachusetts-based Guilford Rail System. His response was typical of many purchasers who say that long-standing rivalries between groups do not die easily or quickly.
But the good news is that most of those who took part in the survey believe that their companies are at least trying to maintain a working organizational structure. A full 86% of those surveyed say they agree wholeheartedly with their companies' position and tactics of promoting integration and teamwork among supply-chain-related functions.
"Cooperation here is the best I've seen in 37-years experience in industry," says Eugene McNally, purchasing manager for New Jersey-based Sea Gull Lighting Products. "Owners value and promote cooperation. Being a family business, the key managers know they have somewhat limited upside potential, so they don't try to make themselves look good by putting co-workers down."
Ninety-six percent of those surveyed believe their companies' organizational structure is working well. Likewise, 92% believe their companies are focussed on promoting integration and teamwork among the different supply-chain-related functions like purchasing, logistics, materials management, and manufacturing.
"Teamwork is written into every position at my company," says Karen Byrne, director of production development and sourcing at the New Jersey-based Calvin Klein Cosmetics.
"It's only good business to make the individual departments a good cohesive, well-oiled machine of integration," says Chris Spencer, a buyer for the California-based Sonoma Scientific.
Warning flags
But there are serious warning flags being raised. And not everyone is optimistic about the way teamwork is being fostered. There is constant interference from "people's attitudes and personalities," says Kevin Hickman, purchasing manager for HCI Industrial Chemical & Supply Co. in Florida. "Excessive workloads are put on the 'can do' people," he says.
And many buyers report that people too easily assume or take over another's job responsibility. It's a trend that causes hard feelings and works against the concept of teamwork.
"Boundaries are routinely crossed as needs arise," warns Larry Meacham, vice president of quality and materials for Iowa-based Wiese Corp.
Most of the survey participants say their companies are not taking the most effective approach to the problem. Many large companies have found that the most efficient way to promote interdepartmental cooperation is to group certain departments under a single leader or management structure. But 60% of those surveyed say this has not happened at their companies.
Good news on finances
But not all purchasers noted a huge lack of cooperation here. Many seemed to indicate that they get a lot of cooperation from departments that are responsible for finances. Using a 1-10 scale, 52% of those surveyed say they see a high level of cooperation between purchasing and accounting departments. Thirty-four percent say they get a high level of cooperation from finance/treasury departments, and 24% say they are close to getting a high level of cooperation from them.
Other departments that are related to purchasing also fared well. Fifty-four percent of those surveyed, for example, say they see a high level of cooperation between purchasing and logistics/materials management. It should be noted that more companies are including transportation/logistics functions within the purchasing department itself.
Purchasing and manufacturing departments also seem to get along fairly well. Thirty-eight percent of those surveyed rate the level of cooperation between these two departments as high, and 26% rate it as close to high.
But other departmental relationships don't seem to be working quite as well. Only 14% of those surveyed say they see a high level of cooperation between purchasing and design engineering departments, for example. The level of cooperation between purchasing and executive management fared even worse, with only 4% of those surveyed seeing a lot of cooperation between the two departments.
Asked where they believe purchasing needs the greatest level of cooperation, the participants didn't hesitate. Fifty two percent say design engineering departments need to be more forthcoming when it comes to cooperation. This was followed by executive management, which 46% of those surveyed say needs to be more cooperative.
It's a situation that has fostered more than a little cynicism in the world of purchasing. Asked what mechanisms a company should employ to foster integration among functions, Wright was at a loss. "If you find any, let me know," he says.
And one purchasing manager had a simple solution to getting the different functions to cooperate. "Tie them all together in a room until they work together," suggests McCartney.
Clear obstacles
But all is not lost here. Many purchasing managers say they clearly see obstacles that companies can overcome as they try to foster communication and integration. One obvious area, they say, is to foster an environment that lets all employees know what the company's common goals are and clears up any misunderstandings about perceived conflicting goals. Mistakes or interdepartmental problems should likewise be approached with a more positive attitude.
"[Otherwise] it's pitting department against department in a blame game when something goes wrong," says Blizzard.
"It's attitudes and favoritism of one department over another," agrees Spencer.
But a slightly more challenging area, the participants agree, is approaching the problem of egos. Too often, purchasing managers say, companies allow department heads to act like they are ruling their own "dynasties" instead of trying to get different departments to work as a team.
"It's a mind-set," says Larry Haffner, corporate purchasing commodity manager for the Texas-based Overhead Door Corp. "They all have to rid themselves of the theory that they work in their own little world and accept the global concept of working together to attain one goal."
Time-tested procedures
Many of those surveyed believe their companies can turn their teamwork challenges around by instituting a few simple, time-tested procedures. One is simply going all out to open up the lines of communication.
"All holds-barred communication" would help greatly, notes G.R. Pitman, of Modular Industrial Solutions Inc. in California. "[We need to be] free from the threat of reprisal."
Some of the survey participants say the chain of communication can be greased and made more efficient by the distinct defining of duties and responsibilities. This will keep people from treading, either accidentally or on purpose, into other people's job responsibilities. This should be supplemented, some say, by the institution of cross-functional project teams that can be managed by disciplined project managers who oversee new product, cost improvement, and quality projects. "Have process owners. Hold people accountable for team results," says D.L. Jones, director of purchasing for the Arizona-based American West Airlines.
Some survey respondents say that employees themselves are the root of the problem. Some say that staff members simply refuse to play along or work well with others. "Having an unsupportive staff can work against the concept," says Wayne Pruitt, purchasing manager for the Virginia-based Industrial Products Co. "Negativity is like a cancer and will spread into the working atmosphere."
But the majority of those who took part in the survey lay the responsibility at the feet of management. They say whatever process is adopted, it must receive the blessing and support of upper management. Too often, survey participants say, the departments of production, planning, design, quality, and purchasing have different leaders to answer to. Those who have watched this process work well report that their purchasing departments were successfully linked with operations management, logistics and planning, materials, and warehouse receiving/shipping departments.
Getting management in the game
But those purchasing pros at companies that haven't had success in breaking down functional "silos" say it's critical that upper management has got to be a part of the game.
"You must have the teamwork concept implemented, supported, and directed by upper management," says Pruitt.
"Management must continually reinforce the common goal of teamwork, reminding employees we are part of a company, not only a department," agrees Byrne. "Common goals are important."
All of these mechanisms need to be supplemented by clearly stated, shared goals and objectives. Survey participants say that exact procedures need to be ironed out completely when engineering and purchasing departments are asked to work together to come up with a new product.
Involvement by all
And perhaps most important, purchasing managers say all departments need to be informed or even involved early when special projects or new products are being planned.
"Involvement in projects by all departments is necessary," says Ed Gerdow, purchasing manager of American Licorice Co. in Illinois.
"Let every level get the whole picture. No secrets," agrees Blizzard.
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