The origin of the word communication is no mystery to anyone, sharing, exchanging information, making some subject common, business information, activities to be performed, all are actions that are part of our routine and survival, but what has to do with the logistics chain ?
Communicating, we soon understand that it is a common action, however antagonistic to misinterpretation, thus making it dependent on who receives and who performs it.
A very common example is the saying “Whoever has a mouth goes to Rome” or would we say “Who has a mouth goes to Rome”? Going to Rome and going to Rome are two achievable actions, which both need the act to communicate, but with different results that compromise what would be the real intentions of each communication.
Considering these concepts for the academic world and applying to the logistics theme, experts on the subject translated these failures into communication versus understanding as a bullwhip effect (in English, bullwhip effect). action has more reverberation and along the way loses its power.
When we apply the meaning in practice in supply chain we have the definition as the distortion of the perception of search along the supply chain in which requests to the supplier there is a variance in the actual demand to serve the consumer, that is, the links in the logistics chain (customer, distributor, warehouse and factory) have divergences in the understanding of products for the final customer service, which may be higher or lower than the real expectation.
Communication goes beyond speech, data is also a powerful foundation for communication and assertiveness in our business decisions. Today, a company that does not have integrated data and visibility that generate valuable insights is living in the bullwhip effect trap.
They are those who do not have a managerial vision, high or low inventory of products due to lack of intelligence in their demand, leading to disruptions in their commercial point and, mainly, the loss of sales, revenue and failures in their purchase journey and experience of your consumer.
Some ways to reduce the bullwhip effect already validated by some segments, especially retailers, are to streamline order processing, adjust inventory levels, greater alignment between the sales and supply teams, better sales forecast, lead time reduction and, with sure, a lot of partnership between all involved, thus reducing errors due to misunderstandings.
Technology in the supply chain comes to assist in end-to-end processes, where by 2024, 50% of supply chain organizations invest in applications that support artificial intelligence and advanced analytics, forecast by Gartner, in 2021.
And it adds that by 2023, 50% of global product-centric companies will have invested in real-time transportation visibility platforms and the market is expected to grow rapidly over the next two years.
In this way, misunderstandings can be better avoided if everyone has access to important information and with correct data, integrated from each point of the chain, only then will they have a vision of what is the real need and execution of a supply chain from its beginning to the end.
And that is what we, brainers, are studying to bring to the market solutions that combine data and intelligence with the supply chain, we will soon have great news and new partnerships. Take the opportunity to also read about the Industry 4.0, another article that brought more issues about efficiency and business!