Supply Chain Issues: How Much is Lost Paperwork Costing Your Company?

For hundreds of years, paper documentation has been used to deliver crucial information, from receipts and prescriptions to certifications. Today, the medium has started to fade from our day-to-day use.

Word processing software, email, workflow automation, and much more have taken over. When it comes to supply chains, however, many organizations have still not moved on from physical paperwork.

Unfortunately, paper costs supply chains thousands of dollars.

We’re not talking about the cost of paper, ink, and printing (although this undoubtedly contributes to this outdated expense) but the actual price of using paperwork for necessary documentation lies in those instances where the old system fails.

Paper results in a lack of visibility, traceability, and efficiency. It enables crucial documents to get misplaced, damaged, or lost entirely.

The risks are not as negligible as you might think. It is clear the industry is in dire need of a transformation towards digitized documentation.

With all that in mind, read on as we explore the true cost of lost paperwork in this article.

Lost Paperwork Causes Supply Chain Issues: Here’s Why

The disadvantages of losing paperwork in the supply chain are vast and easily showcase why digitization is the only way forward:

  • Increased risk of errors due to unreadable or lost documents
  • Time wasted on the organization of paper documentation in offices Tedious filing work keeps workers from more important jobs
  • Quarantined or scrapped parts and delays in manufacturing
  • Quick access to documents if products are recalled or fail

Lastly, the negative impact on the environment as paper copies are printed and eventually discarded. An average American office worker goes through as many as 10,000 sheets of paper each year!


How Much Could Paperwork Cost Your Company? Common Examples

If you can’t imagine the possible cost of paper, here are a few common scenarios that outline the problem:

Example 1

A distributor handling $30M worth of products per year scraps $180k annually due to certification problems. The issue? Paperwork got lost, and products can’t be passed on due to the lack of certification required for compliance.

Example 2

A customer has installation issues and voices concerns about incorrect inserts. The supplier might pull up the certification to review.

But in the meantime, the parts might have been quarantined, and several employees affected, either due to stalled implementation or time spent tracking down paperwork.
When the supplier finally tracks down the paperwork, it becomes clear that the inserts in question were provided by a different manufacturer and require a different installation process.
If four employees were involved in addressing this issue for 2.5 hours, the cost of manpower quickly adds up to $650.

Example 3

A distributor sells parts to their customer but includes the wrong documentation by accident. As a result, it was necessary to quarantine the parts and send replacements.
The new parts also included the wrong paperwork, leading to the distributor having to recommend an alternate source and risking the loss of their customer.

The cost for the distributor includes:

  • Labor, for $1,500
  • Red shipping and two lost sales for $120 + $2,400 + $2,500 = $4,920
  • The Loss of the customer: $66,000 ARR

According to a Gartner study, it takes an average of 25 hours for lost documents to be recreated. So you can imagine the labor cost and inconvenience this could mean for your business and how much a single lost document could slow down distribution.
On top of the cost of lost documents, paper costs any type of business dearly in several ways. Record Nations estimated that the average business spends $8,000 on the paper itself and an additional $8,500 on filing and storage. Not to mention, this process requires a dedicated file manager to ensure the organization of these documents and can easily cost another $30,000 per year in labor costs.

Avoiding the cost of paper in the supply chain is possible with modern technology solutions. But, many organizations have yet to transition because they still rely on legacy procedures, lack multi-department time and leadership to update processes, or fear the investment such a solution represents.

Just knowing the actual cost of paper can help supply chain organizations decide to transform their process. Software like SmartCert allows you to store, access, and edit certifications for your products in the cloud. You can easily:

  • Establish the origin and complete history of a product as it travels through your supply chain
  • Create a centralized repository for documents that is accessible to your teams
  • Share a unique QR code or email for each product to let any user in the chain access relevant and up-to-date certifications
  • Search active and archived certifications
  • Update certifications even if a product is already in transit, sitting on a warehouse shelf or in use

Because these digital certificates can be accessed from any device with an internet connection, they can never be lost. This also dramatically reduces the risk of accessing the wrong certs or outdated information.

Digital documentations also aids in creating a traceable supply chain in which all actors in a distribution life cycle can review a product’s history and legitimacy. As a result, your organization can significantly reduce the risk of counterfeit or defective products making their way to your customers.


Stop Paying for Paper If your organization still uses paper documentation, it might be time for a change. Consider the cost of lost paperwork alongside the cost of storing and managing files.

The hassle of recreating lost or incorrect certs negatively impacts the efficiency of your distribution. At worst, it can affect the end customer’s experience and impact the credibility of your brand.

SmartCert provides a simple and effective solution for making your product certifications easily accessible throughout the supply chain. Never risk losing a document or creating delays for your teams and customers.



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To learn more about how we can reduce your labor efforts and costs while improving process efficiencies, click here to request a free demo.

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