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Silos and the silo effect

Thursday, February 16th, 2012 : 1 Comment

Growing up in Illinois, I had crisscrossed the “prairie states,” met my share of co-op farmers, and seen plenty of silos. I never gave much thought to the gigantic storage tanks. Until three weeks ago.

It took a trip to rural Georgia and a conversation with a silo manufacturing company to develop an appreciation for the importance of silos in our lives.

Silos
Crabapple Silos – photo by Stephanie True Moss

While traveling through a former farming community, I learned that the farmers who originally inhabited the area built several large brick silos for harvest storage. Homes were built near the silos and up sprang the towns of Roswell, Alpharetta, and Milton, Ga. Today, these historical silos stand as a “link with the past” and have created a sense of pride for the community.

By sheer coincidence, two weeks after visiting the Crabapple Silos, I had a conversation with the largest maker of agricultural silos in North America. During my conversation with a senior manufacturing executive, I learned silos are extremely complex to design, build, transport, and assemble.

A vice president at the company mentioned that even though making silos is complex, even more complicated are the “intellectual silos” that are a daily occurrence in manufacturing plants.

The phrase “silo effect” has become popular in business and especially in manufacturing. It commonly refers to a lack of open communication and common goals between departments in an organization. This “silo effect” gets its name from the farm storage silo. Each silo is designated for one grain or specific product.

To a manufacturing executive, a lack of communication and “silo thinking” causes departmental breakdowns and a lack of free-flowing ideas from other departments. The net effect is confusion and a disruption of efforts toward common business goals.

The “silo effect” is caused by a remarkably small number of people who gradually drain the silo‘s grain. Its negative impact can be huge on the performance of the total team; eventually leading to a loss of business. However, I’ve seen clients successfully deal with these “silo effects” within the walls of their company. I’ve sat in on several Pull Design Workshops and have personally seen this transformation occur.

It takes a concentrated and ongoing process improvement program. During these workshops we gather the thoughts of the leadership team and then, in one to two days, work with them to develop a course of action to reduce the “silo effect” and develop a sustainable process improvement program. The result is improved productivity, right-sized inventories and more working capital. Often workshop attendees see improvements in customer service, too, once the strategies are implemented.

What are you doing to break down organizational silos? What’s been successful for your organization?
Post by Bill Z.

One Response to Silos and the silo effect

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