Silo Effect a Prominence Factor to Decrease Efficiency of Pharmaceutical Industry

To be sure, all the industries try to be involved in globalization with a constant trend to find out ways to increase productivity across different functions within an organization to maintain competitive advantage world. Pharmaceutical industries are not exceptional and further are based on fragmentation. So these kind of companies need to cope with several barriers such as silo mentality that may affect efficiency of their business activity. Due to eliminate a part of resources such as raw materials, new molecule developed, financial and human resources and so on, companies can gradually loss their competitive potentials in the market and increase their expenses. Furthermore, to avoid any business disturbances in financially connected companies due to silo effect, they should arrange their management to integrated organization form. Otherwise, actions taken by one business member of the chain can influence the profitability of all the other members in the chain. That is why recently supply chain has generated much interest in many business units. In this paper, it has been tried to investigate the different aspects of silo effect which can affect integrate supply chain. Finally, a fluent communication, high level of information exchange, fragmentation management, cross-functional control in a supply chain management format are needed to reduce or control silo effect within entire chain of the holding company by Supply chain management.