Manufacturing Mastery

Chapter 9 Strategy Defines Organization

An organization chart can support the endurance of a business, or amplify weaknesses

Except in farm country, “silos” is a dirty word. As well it should be. Yet it seems to describe the most common organizational structure we see in manufacturing businesses.

Companies are often organized by skill set or primary tasks, not by authority or decision-making responsibilities. Structures rarely are designed to instill core values or magnify human potential. In larger companies, they often take the form of silos within siloed strategic business units (SBUs). When one business unit sells products or services to another, that structure can create nasty fights over transfer pricing. When they are entirely separate ...