7 Reasons real-time and direct communication is crucial during supply chain disruptions

Summary

Supply chains are more complex and interconnected than ever before. This complexity also makes supply chains more vulnerable to disruptions. To effectively manage these risks and ensure operational continuity, real-time and direct communication with all stakeholders in the supply chain is crucial. In this article, we will explore:

• Disruptions – the new normal?
• Direct communication is more important than ever
• Implementing real-time communication technologies
• Building a resilient supply chain

Disruptions – the new normal?

Supply chain disruptions have become a significant challenge for businesses globally. According to Resilinc’s EventWatchAI, the year 2024 saw a 38% increase in global supply chain disruptions compared to the previous year. The top five disruptions for 2024 included factory fires, labour disruptions, business sales, leadership transitions, and mergers & acquisitions.

Labour disruptions, in particular, saw a 47% year-over-year increase, significantly impacting various industries worldwide. This included strikes, protests, and layoffs, such as the International Longshoremen’s Association (ILA) port strike affecting over 47,000 workers, the Canadian rail strike, and major layoffs at tech giants.

Several additional risk areas experienced substantial year-over-year increases, including extreme weather (up 119%), geopolitical risks (up 123%), and protests/riots (up 285%). Regulatory change alerts also rose by 128%, covering tariffs, law changes, environmental regulations, and bans. The most disrupted industries were Life Sciences, Healthcare, General Manufacturing, High Tech, and Automotive, marking the fourth consecutive year these sectors were most impacted.

A survey of 2,000 logistics professionals in Europe found that 76% of European shippers experienced supply chain disruptions in 2024, with significant financial impacts. More than half of businesses reported that the costs linked to these disturbances exceeded expectations, and only 20% of respondents were able to address and resolve all disruptions quickly.

The new disruptions in Europe stem from various root causes, with two main reasons being the rising number of geopolitical conflicts and severe weather conditions due to dramatic climate change. Examples include low water levels in canals and important rivers, and flooding that destroys infrastructure, as seen in Spain. This was reflected in the survey responses, where 80% of logistics professionals identified geopolitical instability or state-on-state conflicts as the biggest potential disruptors to their supply chains.

Direct communication is more important than ever

Given these disruptions, it's clear that real-time and direct communication with supply chain customers is more important than ever. Here are seven reasons why:

1. Enhanced visibility and transparency

   One of the primary benefits of real-time communication is the enhanced visibility it provides across the supply chain. When disruptions occur, having immediate access to accurate information about the status of shipments, inventory levels, and production schedules is vital. This transparency helps businesses quickly identify where the issues are and assess their potential impact.

   For instance, when a natural disaster impacts a key supplier, real-time updates can alert a company to delays in receiving essential components. This enables the company to proactively inform customers about potential delays and seek alternative sourcing solutions. Enhanced visibility minimises uncertainty and facilitates more informed decision making, which is vital during disruptions.

2. Quick decision making

   Supply chain disruptions often require rapid responses to minimise their impact. Real-time communication enables businesses to make quick decisions by providing up-to-date information. This agility is essential for addressing issues such as rerouting shipments, adjusting production schedules, or reallocating resources.

   For example, if a transportation strike disrupts delivery routes, real-time communication with logistics providers can help identify alternative routes or modes of transportation. This swift decision making can prevent delays from cascading through the supply chain, maintaining operational continuity and customer satisfaction.

3. Building trust and confidence

   During disruptions, maintaining trust and confidence among customers and partners is critical. Real-time and direct communication foster this trust by keeping all stakeholders informed about the situation and the steps being taken to address it. When customers know they can rely on timely updates, they are more likely to remain loyal and understanding.

   If a company experiences a production delay due to a supplier issue, promptly informing customers about the delay and providing regular updates on the resolution process can help maintain their confidence. This transparency demonstrates a commitment to customer service and can mitigate the negative impact of the disruption on customer relationships.

4. Improved customer satisfaction

   Accurate and timely information about delays or changes helps manage customer expectations, which is essential for maintaining satisfaction during disruptions. Real-time communication allows businesses to provide customers with precise information about when they can expect their orders, reducing frustration and uncertainty.

   If a shipment is delayed because of a port closure, real-time updates can notify customers of the revised delivery date. This proactive strategy can greatly improve customer satisfaction, even in difficult circumstances, by demonstrating that the company values their business and is dedicated to keeping them informed.

5. Effective problem-solving

   Disruptions often require collaborative problem-solving among various stakeholders in the supply chain. Real-time communication facilitates this collaboration by enabling direct and immediate discussions. By engaging customers, suppliers, and logistics providers in real time, businesses can find mutually beneficial solutions to disruptions.

   For instance, if a key supplier is unable to deliver components on time, real-time communication can help identify alternative suppliers or adjust production schedules to accommodate the delay. This collaborative approach ensures that all parties are working together to resolve the issue, minimising the disruption's impact on the supply chain.

6. Reducing misunderstandings

   Clear and direct communication minimises the risk of misunderstandings, which can exacerbate the impact of disruptions. When all parties have access to the same real-time information, it reduces the chances of errors and confusion.

   For example, if a shipment is delayed, real-time updates can ensure that all stakeholders are aware of the situation and the reasons behind it. This clarity helps prevent misunderstandings that could lead to further delays or operational issues. By providing accurate and timely information, businesses can ensure that everyone is on the same page and working towards the same goals.

7. Supporting business continuity

   Real-time updates help businesses maintain continuity by quickly adapting to disruptions. This resilience is crucial for sustaining operations and meeting customer needs during challenging times. By prioritising real-time and direct communication, businesses can navigate supply chain disruptions more effectively.

   If a manufacturing plant experiences a sudden shutdown, real-time communication can help coordinate efforts to resume production as quickly as possible. This might involve reallocating resources, adjusting production schedules, or sourcing components from alternative suppliers. By maintaining continuous communication, businesses can ensure that disruptions are managed efficiently and that operations are restored promptly.

Implementing real-time communication technologies

To achieve the benefits of real-time and direct communication, businesses need to work with an integrated logistics provider to implement the right technologies. Several key technologies enable real-time communication in supply chains:

• Cloud-based platforms: These solutions centralise data from across the supply chain network, providing stakeholders with instant access to critical information regardless of location.
• Internet of Things (IoT) sensors: IoT devices, such as GPS trackers and RFID tags, enable real-time tracking and monitoring of goods, offering continuous updates on the location and condition of shipments.
• Artificial Intelligence (AI) and Machine Learning (ML): AI and ML enhance forecasting and operational efficiency by analysing data patterns and predicting disruptions before they occur.
• Blockchain technology: Blockchain ensures secure and transparent transactions, allowing real-time verification of data and reducing the risk of fraud.
• Real-time tracking systems: These systems provide end-to-end visibility throughout the supply chain, helping businesses monitor shipments and respond quickly to any issues.
• Advanced analytics: Data analytics tools process large volumes of data in real time, offering insights that drive strategic decision making and improve operational efficiency.
• Augmented connected workforce (ACWF): Digital tools that enhance decision accuracy and reduce variability, improving productivity across manufacturing and logistics operations.

By prioritising real-time and direct communication, businesses can navigate supply chain disruptions more effectively, ensuring that customers remain informed, satisfied, and confident in their services. Real-time communication is crucial for maintaining efficiency, reducing uncertainty, and ensuring that disruptions are handled as smoothly as possible.

Building a resilient supply chain

Real-time and direct communication is crucial for effective risk management and operational continuity during supply chain disruptions. Enhanced visibility, quick decision making, building trust and confidence, improved customer satisfaction, effective problem-solving, reducing misunderstandings, and supporting business continuity are all vital benefits of real-time communication. By implementing the right technologies and partnering with integrated logistics providers providing data integrations, businesses can ensure that they are well prepared to handle disruptions and maintain smooth operations. Prioritising real-time and direct communication not only helps navigate current challenges but also builds a more resilient and responsive supply chain for the future.

Be ready to communicate during disruptions to go all the way! Discover more with Maersk Logistics Insights, and learn more about Maersk Supply Chain Resilience Model. For more logistics trends and insights, read and download The Logistics Trend Map.