How to Better Articulate the Financial Value of Your Supply Chain

Published : September 24, 2015


A train conductor needs to know not only how his movements control the engine, but what their impact will be throughout the entire train. Supply chains are similar—a long line of interconnected vendor "cabooses" that can stay on track or go off the rails, depending on how the manager at the head reacts. A supply chain professional who doesn't have a comprehensive grasp of their entire supply chain is due, sooner or later, for some uncomfortable stumbling over reports in a C-suite meeting. Are you able to relay the value of your supply chain without glossing over some of its more contentious aspects?

Recognize That Distance = Importance

Foreign material and goods manufacturers are often the linchpin in a successful supply chain, yet far too often they are the area that domestic managers understand the least. Beyond simple shipment tracking and receiving checks, complications such as geo-political unrest or cultural differences should always be on the radar. Here are just a few concerns to mull over before choosing a foreign supply chain partner:

  • Does the country have any work-impacting holidays or festivals? When are they?
  • What is the country's general stance on child labor or other illegal workers? Can you be sure your vendor adheres to your ethical code?
  • Is bribery shunned or an accepted part of doing business? How will your business react?
  • Is there a representative available on your time zone, or are you at the mercy of their clock?

Questions like these aren't bridges to be crossed when you come to them—each has the potential of disrupting your workflow and company income in a major way. Knowing where both your logistics team and your company as a whole stand on these obstacles will help smooth out speed bumps in your efficiency. 

Find Common Strategic Ground

There are a number of strategies that work just as well in the warehouse as they do in the office proper. The LEAN model has been particularly instrumental in holistic business success, focusing on allowing the target market to pull resources, rather than pushing them from the business' side, among other steps. Innovative risk-taking and learning from failures is an important LEAN step in discovering solutions. When this concept is expressed to a C-suite already familiar with LEAN applications from their own work, a logistics manager requesting resources for supply chain strategy implementation might find a warmer reception. 

Stay Current on the Industry

Just as important as keeping informed on foreign business node activities, staying up-to-date on the state of domestic logistics services is vital. You should be able to communicate industry-wide problems like the ongoing truck driver shortage with authority and have alternate suggestions at the ready to bypass any looming issues. While C-suite members might not necessarily understand the nuances of logistics-specific problems, they will understand the proactive stance you're taking and respect your input. Whenever possible, note the potential financial impact in easily-relatable terms, such as "potential profit loss each late day of a single truck shipment" to help quantify the issue in a tangible way. Don't be afraid to draw correlations between the state of the economy and the state of logistics, advises Benjamin Gordon of CNBC; the extent to which they impact one another is another extremely relatable bullet point. 

Getting the green light for innovations and improvements in your supply chain strategy hinges on making a solid case to the C-suite, which can frequently be an uphill battle. Always walk into assessments with a plan B, and you'll sidestep shouldering blame for logistics concerns that would happen with or without you. Explaining your team's difficulties with clarity and staying on top of potential supply chain problems will help win decision-makers over to your side, one meeting at a time. 

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Topics: Supply Chain Logistics

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