highly agile and responsive. Hierarchical organizational models are usually not the most agile.
At the same time, thanks to digitization
and Manufacturing 4.0, manufacturers have
access to real-time data that they can use to
quickly react to changes in demand or even
head off production problems before they
happen. But making those real-time adjustments in the M4.0 era means that manufacturers no longer have the time to massage
data, run it up the management hierarchy, and
wait for orders. Decisions must be made in
real time and as close to the product line generating the data as possible, by workers and
supervisors who understand the full business
and process implications of their decisions,
and who can communicate effectively with
colleagues whose functions may be affected.
In other words, they need to collaborate.
This transition to flatter, collaborative organizational structures and decision-making
models is confirmed in new research from
the Manufacturing Leadership Council. The
Council’s Collaborative Enterprise study,
based on a survey of manufacturing leaders,
shows that, within the next five years, collaborative organizational structures will replace hierarchical ones as the primary model
for manufacturers. And, the study shows,
manufacturers believe that this collaborative
approach to decision-making will lead to increased efficiency and productivity and fewer
errors. Manufacturers recognize, however,
that, to arrive at a more collaborative future,
they will need to overcome and change current
corporate cultures and individual behaviors.
Collaboration on the Rise
While 24% of manufacturing leaders surveyed by the ML Council describe their companies’ current corporate structure as collaborative today, 39% predicted it will be collaborative within five years. At the same time, only
19% predicted that their companies will be
organized hierarchically in five years, down
from the 37% who said their companies are
hierarchical today. (Chart 1.)
A solid majority of manufacturers taking part in the survey—61%–said enhancing
cross-functional collaboration will enable
them to enhance productivity, reduce errors,
and leverage worker skills. (Chart 3.) Also
driving collaborative models, manufacturers
said, are the need to cut costs and waste and
the need to enhance speed and agility.
In terms of what corporate functions
manufacturing needs most to collaborate
with, 56% of survey respondents identified
design and engineering as the primary target. (Chart 8.) Another 49% said manufacturing is most in need of collaborating better
with the supply chain function.
Turning to collaboration involving
external processes, the largest group of
manufacturers—81%–said their organizations most need to improve collaboration
with suppliers. (Chart 9.) The next-largest
group—76%–said manufacturing most
needs to improve collaboration with key customers.
While manufacturers are optimistic about
the spread and impact of more collaboration,
it appears that, today, efforts to drive collaboration are tactical and project-focused rather
than strategic and enterprise-wide. The largest group of survey respondents—51%--said
that collaboration most often takes place in
meetings where multiple functions are represented, but only on a project-by-project
basis. (Chart 4.) Only nine percent said their
companies conduct regular reviews to assess
collaboration, and just 30% said their companies conduct scheduled check-in calls to plan
At the same time, just 39% of manufacturers said that their companies formally
measure and assess leaders in terms of their
ability to drive collaboration and exert cross-functional influence. Fifty percent said their
companies currently do not do so.
Barriers to Collaboration
By a wide margin, manufactur- ers surveyed by the ML Council identified the need for company
Jeff Moad is executive
editor and research
director at the Manufacturing Leadership
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that can move
will emerge as
tive, and agile