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Aug 20, 2018

Communication Directly Impacts Supply Chain Operations. Here’s How.

Whether your shipments slip through the cracks or arrive on time and in full, there is one foundational reason it happens: communication. Here's the impact of communication in supply chain operations.

Late fees. Angry customer tweets. Negative reviews.

We won’t mince words — shipping the correct inventory in full and on time is complicated.

And between suppliers, distributors, manufacturers, retailers, and customers, there are million spots in your supply chain where something could break down and go wrong. In fact, according to a GS1 US Survey, retail inventory is only accurate about 63% of the time on average.

As someone who runs a business with shipping making up a core part of your business, you likely already understand the complexities, pitfalls, headaches, and great rewards that come with it.

But when things work, they really work. According to a Deloitte survey, 79% percent of companies with high-performing supply chains achieve revenue growth greater than the average within their industries.

It all starts — and ends — with supply chain communication.

Communication’s Impact On Your Supply Chain

The Impact of Poor Supply Chain Communication

When you’re competing with the Amazons of the world, excellence is what will keep your company humming along. So it’s important to understand that when shipments slip through the cracks, there is one foundational reason it happens: poor communication.

Poor communication is all too common in shipping and logistics. A big reason: The sheer number of involved parties across each supply chain. Most supply chains involve some or all of these parties:

  • An internal shipping and logistics team
  • An internal accounting or finance team
  • An internal operations team
  • Employees at your retail locations and warehouses
  • Manufacturers
  • Consignors
  • Consignees
  • Customs agents
  • Origin and destination agents
  • Freight forwarders
  • Shipping carriers

Whew! That’s a lot of involved parties. It’s easy to see how lines can get crossed.

Poor communication can lead to all kinds of problems in supply chain operations, such as:

  • Stagnant or late deliveries
  • Lost items
  • Demurrage and storage fees, as well as additional chassis fees
  • An inability to plan inventory turn
  • An inability to forecast supply chain costs
  • Unhappy customers
  • Bad internet reviews
  • A breakdown in work relationships

Of course, the biggest problem is that bringing all these parties together on one page feels like a momentous hurdle in and of itself.

The Impact of Good Supply Chain Communication

Shipping is an old practice, and its system hasn’t caught up much with the times. Many companies try to fix these supply chain problems by outsourcing their services or accepting that some items will simply slip through the cracks.

Over time, building the communications core of your company will positively impact every corner of your business. You’ll see improvements to your:

Employees’ happiness and performance.

Productivity improves 20-25% in organizations with connected employees, according to a study by the McKinsey Global Institute.

Vendor relations.

As vendor management expert John W. Henke put it, “All of the major automakers could be making hundreds of millions dollars more annually if they focused more on improving their supplier relations.”

Company’s bottom line.

Revenue at “fully integrated” companies — or, companies with teams that communicate and work together seamlessly — outpace non-integrated companies by 20%.

How to Improve Communication

So, how can you improve communication across your supply chain? We’ve got you covered. Check our out free eBook with 36 actionable tips. Download it today, and start improving your team’s communication off the bat.




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