Why is the supply chain historically more siloed than other functions? And what can be done about it? Ashutosh Dekhne, Americas supply chain and operations practice leader with EY, offers guidance.

Historically, supply chains tend to be more fragmented and siloed than other types of business functions in large part because of their inherent complexity, Dekhne says. They comprise many functions, including manufacturing, planning, logistics and customer service, each of which requires individuals who possess highly specialized skills. For that reason, few companies are able to transfer their experts from one area to another.

A second reason for the fragmentation of supply chains in their geographic diversity. Few products are made and sold in the same country; they pass through multiple regions and markets on their way to the end customer.

There’s also the problem of legacy information technology systems, which make it difficult or impossible to scale technology to a point where it seamlessly connects all functions across a supply chain. New plants, warehouses and service routes are constantly emerging at different points in time. “There’s no connected ecosystem,” Dekhne says.

Finally, companies struggle with harmonizing and linking the three main areas of business structure: supply chain, finance, and commercial operations, to the point where they are operating according to a single set of metrics and ensuring visibility across the enterprise. “We’re not seeing companies getting the value out of transformation because they’re not converging those three,” Dekhne says. And that leads to a disparity in performance metrics, whereby work standards and incentives are focused on individual functions that are often at cross purposes with one another.

Having one individual overseeing the entire supply chain — as with a chief supply chain officer — is a good idea, but simply giving somebody that title isn’t enough, Dekhne says. “More importantly, there needs to be a change of mindset.”