Silo Effect vs. Supply Chain Effect
Silo Effect vs. Supply Chain Effect

Summary/Abstract: “Your company’s goal is to make money or it’s not in business” (Goldratt, 2004). The input of this article considers Goldratt’s quote. It is vital for any organization to integrate its departments together and to create a big frame for its business strategy. We become aware about the interdependence relations between silo effect and supply chain effect. Silo mentality exists due to the fact that everyone works in his or her best interest, in order to achieve the best level of performance, regardless of the effect that might have upon others. The silo effect manifests in the supply chain effect through the bullwhip effect, lack of partnership or combined effects of fundamental phenomena. The main direction to eliminate this effect is to create a matrix coordination system in which each worker knows his hierarchical statute and also the quality requested. The outcome must be the client’s satisfactions by all means.

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