Improve your productivity and profit margins with better business partner communication

03/03/2016

Business partner communication

Business partner communicationOn Thursday February 4th 2016, I had the pleasure of taking part in a #TradeElite Twitter chat organised by FITT. The topic discussed was, “How is the plunging $CAN affecting US/Canada trade?”

My takeaway from this discussion was the need for Canadian importers to focus on maintaining profit margins, as opposed to maintaining market share at the expense of profit margins.

The lower value for the Canadian dollar, in relation to the U.S. dollar, should therefore act as motivation for Canadian businesses to engage and work with consultants to help improve their own productivity.

Working with a consultant or consulting group to improve your company’s communications and increase efficiencies within the business and across the supply chain can reduce operating costs. This is a critical ingredient for sustained business growth.

Investing in knowledge to improve decision-making, for example, can result in greater competitiveness.

This requires a productivity mindset that accepts that currency and commodities price fluctuations are beyond the control of individual businesses.

Another crucial way to increase revenue is to learn how to improve your communication with business partners, both to build successful new agreements and work out any issues, maintaining strong relationships with existing partners.

When negotiating import-export agreements in particular, it’s vital to establish transparent communication channels to convey expectations and resolve disputes.

This will enable the business to remain focused on productivity and competitiveness.

Sharpen and clarify communication channels

Too often, businesses negotiate import-export agreements with other parties without first identifying each other’s business culture and expectations.

The business needs to identify both the formal and informal “human communication channels” that will operate along the supply chain.

To establish a sustainable working business relationship, make sure the agreement establishes clear communication channels that are supported by organizational structure at the operational level of the business.

Without the proper communication channels and understanding of each other’s expectations, misunderstandings can ensue during negotiations, which may delay or ultimately break down talks between companies before an agreement can be reached.

When disputes and inefficiencies happen, in hindsight, business leaders often find that, “if only they knew then what they know now, they could have been more productive”.

The degree of alignment of communication activity across the supply chain with the expectations of the business can impact both qualitative and quantitative outcomes.

For example, a multinational corporation that manufactures worldwide with exports globally ensures that communication documents, from brochures to contracts, purchase order forms, invoices, letters of communication with customers and sales presentations, are all vetted for consistency by a team that has input from the corporate, operations, finance, and marketing departments.

This is done to ensure that at each stage, from initial contact with a prospect to placing of an order, delivery and request for payment, there is minimal possibility for dispute arising due to a miscommunication.

The result is a smooth flow of delivery from factory to the ultimate consumer.

An efficient supply chain delivers to the satisfaction of consumers thereby encouraging more business and prompt payment.

You will need to identify:

1. The degree of alignment of process implementation with the agreed terms of the import-export agreement

2. The steps that need to be taken to encourage alignment of collaborative processes with the agreed terms of the import-export agreement.

To improve productivity and prevent disputes arising the business should:

1. Assess the patterns of formal and informal communication channels among individuals, teams, and functions; internally within the business, and across the supply chain with partners, customers and competitors.

2. Take targeted steps to align communications and business processes with the aims and objectives of the import-export agreement.

3. Reduce inefficiencies by eliminating communication channels that do not produce significant value.

Negotiating international business agreements require an understanding by both parties of what it will take to implement the agreement in order to achieve desired business outcomes.

Disclaimer: The opinions expressed in this article are those of the contributing author, and do not necessarily reflect those of the Forum for International Trade Training.

About the author

Siddha Param

Author: Siddha Param

Siddha Param has advised both importers and exporters on negotiating international trade agreements and resolution of disputes. He also co-authored the book Global Productivity Mindset: Opportunities and Profits Post-2008, available through McNally Robinson.

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