Assessing the Total Cost of Supply Chain Damage

Reducing damage isn’t just a logistics problem. The effects of damage ripple throughout the organization, creating additional work for claims and repairs, and affecting the message of sales and communications professionals as well as their opportunities.

Compartmentalization is one of the biggest hurdles to saving money and increasing efficiency throughout an organization. There’s a naïve belief in organizations that if each department operates efficiently, the overall organization will be efficient too. While this is true to a degree, it overlooks the ways decisions in one business unit affect outcomes in another.

Damage is a good example. Managers outside logistics and packaging are largely oblivious to damage unless it directly affects their own cost centers. Therefore, they may not try to prevent damage if they pay the cost of prevention but don’t also benefit from the savings that result from these actions.

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