Why Communication Matters in Supply Chain Management
Strong communication can make supply chain interruptions less disruptive to daily operations.
By Kate Rockwood
The last couple of years were interesting for OnPoint Facility Services, said the company’s CEO, Joe Giandonato. The company coordinates a nationwide network of service providers for facilities in industries that range from industrial and commercial to healthcare and hospitality. Due to supply chains snarls, a tight labor market and inflation, many of OnPoint’s service providers struggled to land workers and materials — additional time and costs that couldn’t be built into existing client contracts.
“We saw several constraints — a lot of issues where we were already in a contract with a company to provide landscaping and snow removal services. “But due to the economy and inflation, materials and labor became more expensive,” Giandonato said. “We have experienced some pressure due to these increases in labor and material costs, but were already contracted based on a previously lower price.”
Wisely, OnPoint, based in Malvern, Pennsylvania, tackled these issues by addressing the problem head on, telling their clients exactly what the issues were and making it clear that they needed their support and understanding as they navigated this difficult time. Because many of OnPoint’s clients are in the supply chain management industry, they were often struggling with the same issues themselves.
Honesty is the Best Policy
“We are very big on transparency, open communication and keeping our customers in the loop,” Giandonato said. “We would communicate openly with our clients, explaining that we are doing the best we can to work through any potential issues and how we can work with them to avoid any disruptions. The results have always been positive with clients realizing we, as a vendor/partner, are committed to driving positive outcomes .”
Does that level of honesty pay off? Giandonato said that most of the time, it does. “I think instead of sticking your head in the sand, attack it up front and stay in front of it the best that you can,” he said. “I think if you're having those conversations along the way and saying, ‘This is what we're running into,’ and, ‘Here's what we might need from you to keep delivering this service,’ that goes a long way.”
Giandonato acknowledged that some customers may balk at the request but that doesn’t necessarily mean you’ll lose their business. “Most of the time the clients understand, but in some cases where they don't, we may need to get creative and collaborate with them towards a solution that works for both sides. So, maybe our service providers aren’t cutting their grass every week, they're going every 10 days,” he said.
A Strong Baseline
Giandonato worked with his own team to hone their communications. He made certain to get buy-in from others in the company before proceeding with such candor, as he always does before making big decisions internally.
Why? Because what happens internally tends to mirror what happens beyond the walls of the organization. “I’ve noticed throughout my career that when you don't have that buy-in from every department or every level, you lower your chances of having the best success in providing the services you’ve promised to deliver,” Giandonato explained. “It only takes a few bad apples, non-believers or people that aren't sold to make things unsuccessful. And I think clients can see that in the services provided and how quick the response time is.”
In other words: To have strong communication with external partners, you’ve got to have strong consensus within the organization.
But what makes communication “strong” in the first place? For one, it exists right from the very beginning, and it makes clear who outside partners should speak to when they need help, Giandonato said. “We are really big on providing a client with a very clear onboarding process,” he said. “We pull all the stakeholders on their end together, and all the stakeholders on our end, and explain who's who to create a communication matrix from their end to ours. This lets them know who they should communicate with to get things done.”
With new clients, or new sites, Giandonato likes to talk about any challenges that might crop up in the next 30, 60 or 90 days that his team can discuss to have an action plan in place ahead of time. We push ourselves to be proactive instead of reactive.
Of course, there will always be communication breakdowns — and knowing how to defuse them is a huge part of keeping relationships strong. Giandonato said it’s all about keeping your eyes on the goal. “You have to be willing to work with providers, communicate and listen to their needs,” he explained. “It's just as critical for them to overcommunicate with us. And I would say maybe have a little patience during the learning curve. Be a little open-minded, and willing to engage and provide information and help — because we're all trying to get to the same point.”