Sometimes, despite your best efforts, supply chain disruptions occur. Even when you do everything right to keep things moving smoothly, unexpected events — an historic wildfire, a pandemic, civil unrest — can lead to disruptions that keep you from getting products into your customers hands.
Although an event like COVID-19 has spurred many companies to evaluate their global supply chain strategy, and implement new tools like third party risk management software to gain better visibility into the risks their business faces, in the short term the first priority should be communication. Staying in touch with your customers is of paramount importance to protecting your brand and the relationships that you’ve world so hard to build. Even if the pandemic-related disruptions have subsided and things are feeling a bit closer to normal, the lessons of the last nine months should remain a powerful reminder that communication is key.
4 Tips for Communicating During Supply Chain Disruptions
1.Communicate Early and Often
Keeping your customers happy means keeping them apprised of what’s happening with their orders, including why they are delayed, when they might expect to receive it, and other changes they need to be aware of. For example, will you be halting orders for a period, or limiting quantities? Although your customers may be disappointed and frustrated, they will appreciate your honesty, especially if you provide alternatives. In the past, companies have successfully provided substitutions, or met customer needs by offering equivalent (or better) products at a discount.
Communicating with your customers as soon as you know of a supply chain disruption is only the beginning, though. You need to communicate often, keeping customers up to date on the status of items. It’s not possible to over communicate, either. Let customers know about potential issues before they place an order, and proactively let them know what is happening with your business and how you are responding. Never leave your customers guessing.
2. Use Communication to Manage Your Supply Chain
Proactive communication with your customers can also help you manage your supply chain and reduce shortages, while still maintaining positive customer relationships. For example, be upfront with new customers about the shortages and your commitment to meeting expectations, and don’t be afraid to establish waitlists or turn down new business if you can’t adhere to your normal standards. This may not be ideal, but it can protect your brand in the long term.
3. Speak with One Voice
In any crisis, communicating effectively with stakeholders requires speaking in one consistent voice. Everyone, from your suppliers and manufacturers to shareholders, customers, and analysts, should receive the same message, delivered by a single spokesperson or spokesteam. Focus on sharing honest, accurate information about what’s happening, without attempting to place blame or spin the story.
Part of speaking with one voice is focusing on your core values, and how your response aligns with them. Customers are more willing to forgive a disruption when they feel a company is being authentic, and not making excuses. In some cases, a supply disruption may even create an opportunity for you to put your values into action. For example, during the pandemic, cleaning products manufacturer Seventh Generation has dealt with supply chain issues that caused product shortages. However, they’ve also communicated with the public to reassure them that even in the face of such disruption, they are committed to the same standards for alternative materials. As a result, their demand has nearly tripled — and not simply due to the need for more cleaning supplies.
4. Understand Contract Obligations
As soon as you suspect supply chain disruptions, it’s important to communicate with key customers about potential alternate arrangements, but also contractual obligations. Take time to review contracts and your commitments, and take steps to mitigate losses due to failure to meet them. If your contracts include force majeure provisions, which allow you to temporarily or permanently be released from your obligations due to unforeseen and unavoidable circumstances, how and when you communicate may be a key to implementing those provisions.
The COVId-19 pandemic is unique in that it is affecting nearly everyone, in every corner of the world. The fact is that most people understand — even expect — disruptions and challenges. Not all disruptions are so globally recognized, though, and may occur on a more limited scale. However, the communication lessons and best practices learned in 2020 can help you navigate the challenges of the future, and keep your business running smoothly.