The Role of Communication in the Supply Chain

An important part of supply chain management is shaped by creating and maintaining special communication values in managing relationships with all target groups. Managing this, in turn, leads to increased supplier satisfaction and customer satisfaction, which in turn can contribute to the ultimate goal of reputation building.

In a typical supply chain network for a product, there is a flow of relationships that varies depending on where you are in the network. Which side of the relationship flow in the system depends on which link in the chain you are.  For example, in a typical supply chain there is a raw material supplier, a manufacturer, a distributor, a retailer and a consumer. Accordingly, there is a supply chain communication traffic in the system, both upstream to your production lines or suppliers that you only buy from, and downstream to your customers or consumers. In order to manage this traffic correctly, it is important to act in line with a professionally defined plan and to develop a goal-orientated holistic communication perspective, rather than random or habitual general efforts. Let’s take a look at how the power of communication in the supply chain plays a role in supply chain communication.

Time is the most critical element of trade in the supply chain. According to a 2016 research report, such supply chain disruptions cost one in three organizations approximately $1 million or more per year. Of course, when considered together with the global pandemic and related developments, it can be said that this figure has increased incredibly in recent years. Failed communication means misinformation and missed deliveries, which is considered one of the most intractable challenges facing today’s supply chain managers. Goods that are not delivered on time incur extra costs, which makes the customer unhappy. An unhappy customer spreads a bad reputation through word of mouth. Untimely delivery starts with a poor customer experience and, together with negative brand awareness and bad publicity, leads the organization into a communication crisis. Thus, it creates commercial losses that are multi-dimensional and go much deeper in the long term, far beyond the apparent financial loss. At this point, in commercial communication in the supply chain, where information flow is intense and human errors in communication are inevitable, shifting human communication effort to other areas and conducting communication more systematically with EDI and cloud systems and similar digital solutions that offer the opportunity to eliminate these errors and maintain communication almost error-free, provides the right information flow at the right time. At the same time, this is an indicator of the capacity to maintain a professional business without compromising commercial reputation.

It is a more accurate approach to define the target group in different sub-groups, and even to address them by customizing as much as possible within the groups, rather than seeing the target group as a whole, in a generalized manner. Each organization has its own definition of the target audience. Within this definition, primary, secondary and tertiary target groups can be identified. In a supply trade, categories such as manufacturers, importers, distributors, retailers, downstream users can be identified. Since different expectations will develop in each target audience group, activities for each group should be planned to meet expectations.

Employees are the representatives of the organization; they are the speakers of your organization with other target groups. The communication between employees and the organization affects the communication between the organization and other organizations. Organizations that manage their communication with employees correctly pave the way for success in commercial communication traffic in the long term. Employees want to feel that they are cared for and that their voices are heard throughout the organization. This is important to ensure that the commercial flow they are a part of is carried forward with a higher quality workforce. Working on and investing in various ways to achieve this will boost employee morale and increase the workforce in the long term. For example, an organization that invests in digital transformation takes a step that will indirectly contribute to increasing job satisfaction by preventing employees from being overwhelmed with drudgery, which in turn boosts employee morale.

According to the results of a study conducted by Holmes, a global PR company, companies whose leaders advocate effective communication provide 47 per cent higher returns to their stakeholders in a short communication process of five years. With the guidance of communication consultants, managers can take communication with their employees to the next level by taking advantage of the multidimensional and detailed insights gathered on many aspects of the business. At this point, it will be easier for managers to benefit from the different perspectives of their employees and to achieve important internal communication goals such as unity and feelings of belonging.

Without communication, you take a small problem and turn it into a much bigger and more expensive problem in an instant. Once this happens, there are steps that can be taken and things that need to be worked on strategically. However, contrary to popular belief, working on crises requires efforts even before a communication crisis occurs. For this reason, it is necessary to develop a methodology that is correctly angled in terms of determining possible crisis exposure scenarios, how to take action in which situations, how to liaise with whom and how to manage the communication of the crisis, and how to work in line with the goals of the organization.

Supply chain management aims to provide the customer with the most efficient and effective service possible at the highest level throughout the entire supply process, from procurement to production and distribution. Communication is the basis for a strong presence in this fundamental goal. Communication can make the supply chain faster, more efficient and effective than ever before. In this sense, costs such as digital transformation investments or budgets allocated for communication activities are small compared to the cost that may be incurred if communication is disrupted, but in the long run, it contributes to the organization to reach its goals with more solid steps.