Commentary | Supply Chain Perspectives

Communication Insights Boost Shipper-Supplier Relationships

Tags: Global Economy, Asia, Import, Export

Shippers who acknowledge that they have the power to enable their own supplier base to satisfy their needs as well as their customers’ are on the right track. In particular, North American importers would be well served to emphasize stronger communication practices with Asian exporters to boost supply chain efficiency.

Stronger communications go beyond monitoring a system developed to check daily tracking status. It entails understanding the underlying needs of our counterparts in Asia and acknowledging many of our suppliers must consider the demands and concerns of multiple customers. Some of those other customers may be your competitors. Therefore, shippers that present less unnecessary difficulties to their supplier base are more likely to reap the benefits of predictability, quality, and cost. In the famous words of Stephen R. Covey: “Seek first to understand, then be understood.”

As an importer, you must not only continue to communicate your business requirements, but you also need to ask suppliers to reach out and talk openly about their requirements. This may sound strange to some of you, but it needs to happen more often. When we discuss early communication, we want to expand beyond the basic transaction information exchange. We need to develop a thorough understanding during the transactions. There must be a continuous loop of real-time information exchange.

THE Benefits of Continuous Communication

The first benefit is predictability of timing and scheduling within the supply chain. When the schedule is predictable, it enables your material managers, cost accountants, procurement managers, logistics managers, and inbound facility managers to focus on strategic improvements because they do not have to concern themselves with the issues that come from ineffective scheduling.

The second benefit is the improvement of quality within the supply chain. When an importer takes the time and energy to communicate with suppliers, they find themselves able to understand how their suppliers can perform at their optimal levels. A company is able to provide that elusive “value add” because it can provide your goods at the highest possible level, while still having resources to invest in improving processes that are already efficient.

The third benefit is the containment (or reduction) of supply chain costs. When the supplier understands your requirements, it can develop a plan and then execute it. When an importer determines and takes into account the constraints, the costs, and the conflicts that are facing the supplier, both sides benefit from the shared knowledge. This mutual insight leads to reduced set-up costs for manufacturers, increased utilization of fixed cost transportation structures, and a more efficient human resources management plan to complete the objectives.

The communication skills mentioned here are not technically complex, and none of these skills mandate excessive effort from their existing management teams. Many importers can implement these simple tactics immediately and reap the benefits in a relatively short amount of time.

Improvements in schedule, quality, and cost lead to value creation throughout the entire supply chain.