Traditionally, the disciplines in a business operated in silos. Each attended to its own silo with little or no consideration given to the effect on the organization as a whole or its customers. It is easy to understand this as the goals of the different disciplines often conflicted.
Sales’ goal was to sell-sell-sell. If it had no inventory to sell, it was manufacturing or purchasing, or shipping or somebody else’s fault.
Purchasing’s goal was to supply manufacturing materials and services that it says it needs when it needs it. If a company’s cash flow is below target because it was tied up in surplus inventory, it was manufacturing’s fault for ordering it.
Manufacturing’s goal was to meet sales’ demand while balancing overtime, raw material allocations, available resources, controlling costs, etc. If manufacturing failed to meet the demand, it was unrealistic Sales’ goals.
- If Distribution didn’t get the order out in time, it was manufacturing’s fault.