business disruption

How to Communicate Supply Chain Driven Shortages and Delays to Customers

The customer experience very much depends on how you do it.

When disruption hits, customers look to their suppliers to help them understand the implications on them. When you lack a clearly articulated answer, it can lead to customer concern, dissatisfaction and an overall poor customer experience (CX). To combat this, Gartner Senior Director Analyst Beth Coppinger addresses the key questions supply chain leaders are asking in the hopes of delivering the best CX during times of unprecedented disruption.

Communicating a delay is never fun. Why does it fall to supply chain leaders, not on sales or customer service experts, to break the news to customers?

Indeed it’s not, but customers need accurate information to plan their business. This becomes even more critical in the event of a major disruption. While customers may not welcome the information itself, they appreciate honest and clear communication.

The current supply dynamics are a complex story to explain even internally, and they are driving a more integrated approach for external communication and managing customer experience. Conveying issues in a way that is tailored to the customer and helps them address their specific issues requires the combined expertise of sales and supply chain. Supply chain leaders can provide more real-time information to customers and have significant influence on the CX.

What are best practices for developing customer communication that delivers a good customer experience?

The key messages for customer communication are best developed by a cross-functional team of demand and supply planners as well as logistics, customer service and commercial leaders. Finance, manufacturing operations and marketing should also be represented. This cross-functional team can then use the sales and operation execution (S&OE) process to evaluate the situation, as it provides the best visibility into the impact of demand/supply imbalance and a forum for internal alignment on which customers are supplied — and which are not.

There are multiple prioritization principles that you can apply, from first-come, first-serve to prioritization based on markets or revenue. The key is for leadership to align on the principles, provide clear guardrails and support allocation decisions both internally and with customers.

Develop tailored messaging for each account. Top-tier accounts usually receive a high-touch approach, including regular briefings, actions being taken and expected recovery. It’s not unusual for a combined sales and supply chain leadership team who work with customers to understand risks and opportunities to present these briefings. Conversely, for lower-tier accounts, there is a lower-touch approach, where sales and customer service often manage communications directly. That’s why it’s very important that all parties are executing against the same key messages.

How transparent should you be about the cause of the delays? Should you, for example, admit that you couldn’t secure enough raw material or didn’t book enough capacity with your logistics partners?

This is probably one of the most difficult balances to strike. It is important to give customers enough information that they are clear about the issues, the impacts on the supply of their products or services and actions you are taking to resolve the issues. Customers need to know if the cause of the issue is under control and can be managed, or if it is not yet under control, meaning it will likely have the potential to continue. The semiconductor shortage is a good example of an issue not yet under control. Transparency to changes in supply availability is key.

However, it is also important that customers have confidence in their supplier’s ability to proactively manage disruptions across the extended supply chain. Tell your customers what actions you are taking today, and keep them updated on longer-term strategy and investment changes that will help mitigate risk. That’s what they actually want to know.

What is the best way to communicate with customers while they are waiting for their goods?

There is no one-size-fits-all for communication with customers. Different customers have different preferences for format and frequency. Lean on sales to work closely with customers to understand their preferences and to coordinate across the organization to ensure that customers receive the right information at the right time.

This article originally appeared on Gartner.

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