Costs of Bad Communication

How Much Is Bad Communication Costing Your Plant?

Andreas Eschbach, CEO and Founder

86% of employees and executives say that poor communication is a leading cause of workplace failures. In a chemical or pharmaceutical production facility, those failures can range from the merely frustrating to the truly catastrophic. Breaking down communication silos and improving communication across shifts and teams can help plants improve productivity, maintain consistent product quality, and minimize the risk of a safety incident.

    The Costs of Poor Communication

    By some estimates, communication barriers cost the 400 largest companies in the US and UK more than $37 billion per year, or roughly $62.4 million per company. Across all US companies, the costs of poor communication could be as high as $1.2 trillion annually. In a chemical or pharmaceutical manufacturing facility, these costs can be both direct and indirect.

    • Direct costs can include unplanned downtime, costly production delays, product quality issues and recalls, dangerous safety incidents, and fines or sanctions resulting from regulatory non-compliance.
    • Indirect costs include lost business opportunities, lower employee engagement and morale, higher turnover, and waste resulting from duplicated efforts, errors, and poor time or resource allocation.

    Communication problems have significant impacts across the organization—and on the bottom line. Consider:

    • 28% of employees blame missed deadlines on poor communication.
    • Communications expert David Grossman estimates that poor communication costs businesses around $26,000 per employee per year in lowered productivity, lost opportunity, and other business impacts.
    • Knowledge employees (such as managers and process engineers) lose, on average, nearly one full day of productivity each week due to communication failures.
    • A Forrester report estimates that 75% of production delays in manufacturing occur because employees are not able to communicate effectively with co-workers and supervisors.

    Signs of a Communication Problem

    How do you know if you have a communication problem in your plant? While the impacts of poor communication can be felt broadly, there are a few specific issues you can look for. Some of these include the following.

    • Poor alignment between day and night shifts: In 24/7 process industries, communication across shifts is vital. All teams need to be aligned on priorities and stay informed on emerging issues that impact safety and production. Poor shift handover is one of the primary factors leading to product quality problems, lost production and safety incidents.

    • Missed production quotas: If production targets and the specific tasks required to meet them are not crystal clear, line employees are not able to operate effectively, resulting in missed targets. Conversely, quotas may be missed if critical information from the front lines is not communicated effectively to supervisors and managers. Effective real-time, two-way communication is needed for smooth plant operations.

    • Poor compliance: Without good communication and tools such as checklists, routine compliance tasks can often fall through the cracks. Perhaps inspections are missed or reports are not filed properly, so an out-of-compliance situation goes unnoticed or unresolved. Or maybe important safety and compliance information does not make it down to the front lines where it is needed, resulting in unintended safety violations by uninformed workers.

    • Inefficient troubleshooting: When a problem arises in production, swift action is needed to avoid product loss and production delays. Unfortunately, poor communication can hinder the troubleshooting process. Problems noticed in one shift may not be reported to the right people on the next shift, leading to delays in diagnosis and reaction. By the time everyone is aware of and working on the issue, a small problem may have ballooned into a critical situation.

    • Distrust between teams: If there is tension between departments, teams and shifts, chances are there is a communication problem at the bottom of it. Communication silos lead to “us and them” thinking, information hoarding, and conflict between teams. Ultimately, this results in lower levels of collaboration, misalignment of priorities, duplication of effort, and poor decision making

    Breaking Down Communication Barriers in Process Manufacturing

    The good news? While poor communication can cause a multitude of problems, improving communication across teams and shifts can produce both immediate and long-lasting benefits. Investing in organizational communication has a domino effect across the organization, with measurable improvements in productivity, innovation and employee engagement. In fact,

    • Better internal communication can improve organizational productivity by as much as 25%.

    • Companies with good communication and an effective corporate culture achieve revenue growth 4x higher than their peers.

    Digitalization is one of the keys to better communication for process industries. A digitalization strategy—including digital shift handover and plant process management (PPM) solutions—streamlines communication across shifts and teams and ensures that valuable information is not lost in the noise. A centralized knowledge management platform brings everything together in one place, including communication history, sensor and machine data, SOPs and training documentation. These digital tools preserve critical information and make it accessible to those who need it for more effective communication, collaboration and knowledge transfer.

    Improving communication between shifts is a great place to start. Currently, a lot of communication around shift transfer is informal, ad hoc or distributed—the 15-minute shift handover meeting, shift logs kept on paper or a simple spreadsheet, emails between individuals, etc. Improving communication around shift handover is low-hanging fruit that can have an outsized impact on process manufacturing outcomes.

    Communication is the #1 controllable factor in the success of any organization. When communication in an organization improves, everything else does, too. The right communication tools can go a long way toward helping companies foster a positive work environment and drive growth and profitability.

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