Functional units generate additional lost time because of the way they work: they protect their kingdoms. Each function operates independently without much regard for other functions. By focusing solely on their own interests they limit the opportunities for building a dynamic and sustainable organization. Success involves integrating all of these independent silos.
- Researchers work at their own pace; they are very methodical, and take a step-by-step approach. They’re not amenable to doing the last experiment first. The output from research is useless unless somehow transformed into products or services.
- If product development is isolated from research activities until the research is completed, then much rework will be required. These two groups must be engaged in each other’s activities early in the introduction of a new product or process.
- The manufacturing silo is the last stop before a product or service goes to the customer. One out of tolerance component can prevent a product from meeting the user’s expectations. One lost bit of information can make a computer program fail. These failures create lost time.
- Marketing and sales live in the real world. All the effort up to this point is useless if the customer doesn’t buy. Investments in new products and services that do not meet the customer’s requirements generate lost time.
- Physical distribution receives very little attention until the telephone rings and a customer complains about a missing or late delivery. Tracking down lost items, following up on late deliveries, and dealing with the interruptions adds to the lost time in physical distribution. Additional lost time may come from time required by order entry and processing, billing, and any related functions.
- Customer service involves pre- and post-sales activities. The process begins when the product is sold and ends when the customer is satisfied with the performance. Time spent attempting to quiet an irate customer because of lack of product performance adds to the lost time report.
- Financial silos are not generally well versed about the research, product development, and other functional silos. The reverse is also true. But how many times are you going to rework the financial part of a proposal? Every added iteration adds more lost time.
- Human resource departments may not be directly involved in the idea to product cycle but they are a source of lost time. For example, evaluating individual performance has become overcomplicated and the added complexity provides little value for the required effort. Evaluation involves judgment and always will.