Editor’s Note: Lee Schwartz is principal at the Schwartz Profitability Group. He will be blogging occasionally for MDM on the topic of distribution operations. His blog will be presented in a Q&A format. If you have questions regarding operations for Schwartz, please email him at firstname.lastname@example.org. Learn more about Schwartz at the bottom of this blog.
Question: Can operations play alone in the sandbox?
Answer: Have you ever really noticed how a stool is built? Whether three-legged or four, when built correctly the legs are proportionally spaced and balanced. Damage a leg and the stool wobbles; remove or significantly cripple a leg and the stool topples. Businesses are similar. They are not one-dimensional. A single silo, such as operations, cannot by itself keep an organization afloat.
Departments within organizations are as reliant upon their counterparts as they are dependent upon the team within the department. Just think of the dysfunction that would ensue…
- if the sales team did not supply operations with forecasts. How then does the purchasing department know what to purchase to satisfy customer requirements?
- if orders were shipped without credit controls sanctioned by the accounting department. Losses would pile up as invoices went unpaid.
- if sales and marketing are blind to what is sitting on the warehouse shelf or the factory floor. Out of stock product gets ordered while inventory in ample supply continues to collect dust.
Unfortunately, it is common in many companies across many industries to have functional areas in conflict with their departmental counterparts: for example, sales vs. marketing, sales vs. operations, finance vs. sales, or HR vs. legal.
The Bottom Line: Companies that create a culture of communication and collaboration within their organization, that forge strong ties between their functional departments, will achieve greater success. “Us vs. them” environments are doomed to fail. Like those kindergartners learning to play together in the sandbox, shatter those paradigms that encourage departmental independence. Facilitate discourse and communication within your organization. Then watch your profits grow.
Lee Schwartz, former CEO and president of distribution and manufacturing companies, is principal of the Schwartz Profitability Group (SPG) that, for almost 13 years, has uncorked the operational bottlenecks of distribution and manufacturing companies, boosting their bottom line results. His consulting and operational turnaround work helps clients find solutions related to process improvement, supply chain management, inventory control, workflow design, and operational performance.
Schwartz was featured in a recent MDM Executive Briefing. Listen to a clip featuring the importance of culture in making operational improvements below: