Spokes into the
Neighbor's Wheel

Employees of the "Khmel i solod" (Hop and Malt) brewing company have been suffering for quite a while from ineffective cooperation between the departments: two parallel departments may receive identical cost saving tasks, and each department has to find an original way of getting out of a scrape, to the detriment of a neighboring department…

This was an ordinary morning in "Khmel i solod". It started with calls and setting tasks to the reports.

- "Pavlova, why don't we have a rack at the "Food" hypermarket?" – the voice of Alexey Nikolsky, Vice-President for Development, sounded unambiguously irritant. – "Yesterday I dropped in there for food and saw that individual racks are given to "New Beer" and "Old Beer". Appear before me with your story before 4 p.m."

Leaving her no chance to reply the Vice-President hung up. "Well-well" - thought Olga Pavlova, Chief Manager for Logistics, – what a promising beginning of the day!". Obviously, Trade Marketing failed again to inform them of a new campaign. Last time the logisticians had to hire an external transportation company though their driving staff is fully manned, but "Food" placed special demand on the transportation and those in charge of it, and the logisticians did not have enough time to get prepared. That time the Logistics Department exceeded the budget and was deprived of the quarter bonus.

Without any loss of time Olga decided to go to Trade Marketing and clear things up but was interrupted by a new call – this time it was from the warehouse: a new lot from the Ivanovo brewery has arrived, half full or half broken, depending on whether you are an optimist or pessimist.

Olga started making a long-distance call – to Semen Korchagin, Director of the Factory in Verkhnyaya Duga.

- "Hello, Mr. Korchagin", - started Olga in an unctuous voice when the secretary connected her.

- "Hello, dear Olga!" – replied the receiver.

- "Mr. Korchagin, a new lot has arrived…"

- "Good!"

- "It's broken again!"

- "Olga, my dear, what can I do if I have a limited budget for packing, and no right to exceed it!"

- "And what do I have to do now, Mr. Korchagin? In place of the economy we have nothing but losses".

- "Olga, you are closer there to the top - ask your managers what to do, you are in a better position".

- "Well, here is my idea: I will draft a letter to the Finance Director and you will draft a packing budget. Settled? Bye" – and she hung up.

Korchagin sighed. "It's easier said "Draft a budget" than done! As if he had a regiment of economists at stake". On the table in front of him, there was a water consumption data list as of the previous month. One lesson to reduce consumption has already been read to him from Moscow. But the How question still remained unanswered. Last month the line stopped twice, and it must be cleaned daily. Additionally, Pavel Miroshnikov, a recently hired young but very insistent and industrious (let's do him justice!) Quality Manager, started his daily "siege" of Semen Korchagin by giving him a lecture based on the best practice of a famous foreign brewery where Pavel had been lucky to work as an intern. It so happened that foreign experts explained to Pavel that a passport to the excellent taste of beer was cleanliness, and that the line had to be cleaned as often as possible!

This time, however, Semen Korchagin, being deeply upset, was not inclined to listen to the young employee and sent him packing.

Hardly could he take a breath as the phone rang again: Moscow again. This time it was Maxim Voloshin, Sales Director. Maxim greeted Korchagin very briefly and officially and knocked him down with another directive:

- "Mr. Korchagin, to the end of the month our warehouses have to be empty. We've made agreements with some major chains and restaurants and want to fill them to the eyeballs. So, there is no need in brewing beer early next month…"

- "And what do you think we have to do, learn cross-stitching?" – Korchagin could hardly keep down anger.

- "I think it's reasonable to send your factory personnel on leave!" – knapped Voloshin and hung up quickly, as Olga did.

The old brewer was very angry with those guys from Moscow: "Rotten workers! Capable only of demonstrating they arrange conferences and meet with clients", and he, an old master, a professional who started his career as a factory worker… He sat down to the desk to think over a more humane solution of the problem...

However, Korchagin was wrong in thinking that people in the capital city were busy with window-dressing only – they had their own problems to deal with. Having talked to Grandpa (this was Korchagin's nickname among the employees), Voloshin started preparing for being called to the carpet – in the first place, he had to explain to the Vice-President why Porter Classic did not go to the counter when the Key Accounts reduced prices in the «2+1» campaign and went to the wholesalers instead who resent it to minor customers at a price lower than that offered by the Off-trade. Sales Director had to invent a new sales scheme instead of the former one when it had been decided to increase volumes along two channels simultaneously since the goal had not been reached. He had to describe all this in a memo to the Vice-President for Development before the end of the day.

While Sales Director was thinking over a new plan of conquering the capital city, Alexey Nikolsky, Vice-President for Development, was studying a letter from Olga Pavlova, Chief Manager for Logistics. In this letter, Olga informed him that Trade Marketing regularly failed to inform the logisticians of the promotion activities in the "Food" hypermarket, which prevented them from preparing the required transport.

Ten minutes earlier a set of documents for the cherry beer advertising campaign had been brought to him for signing: Marketing somehow had arrived at an idea to market this product in September, at the end of the season, and now, in November, its promotion required significant allocations. It was a grave error of Marketing that costed "Khmel i solod" a packet.

Nikolsky made an internal call to the Marketing Director and asked him to come. At that moment, a new e-mail letter arrived to him from Nadezhda Ivanova, Administrative Director. She informed Nikolsky that this year the cellular operator "Astratel" refused to extend the tariff system which had been proposed to their company, since it had been agreed that the Company had to speak for at least 1000 hours totally, which did not happen. A year earlier, following the results of the tender, it was decided to select two operators: "Bestline" for local calls and "Astratel" for long-distance business calls. "OK, I'll deal with this later", thought Nikolsky and by clicking the cross in the right upper corner put it out of his mind immediately.

Activity: what should be done by the staff of "Khmel i solod" to streamline cross-functional cooperation?