You depend on your suppliers for on-time delivery. If your order arrives late, it creates a domino effect that can put the success of your project at stake. A late delivery means you’re paying the production team for work they can’t perform until the shipment arrives. Your schedule gets pushed back, which affects delivery to your customer, who has their own deadlines to deal with. If you can’t deliver on time to your clients, then you may be putting future contracts at risk.
If you’re relying on overseas shipping, you’re particularly vulnerable to late deliveries. Overseas shipping is not a consistently dependable process. It has a supply and demand imbalance, which is projected to continue throughout 2017 and beyond.
What Do You Do When the Order Is Late?
You’ve just learned that your wood products supplier is delivering an important order late. What do you do? At this point, there’s no ideal solution, but you have a few options to speed up delivery.
Communicate and collaborate
It’s important to understand the root cause of the problem before you take any remedial action. This is especially important if you have a good working relationship with the vendor. Call the supplier immediately and ask questions to understand why the late delivery occurred. Ask if there’s anything you can do to help resolve the issue, either now or for the future. Your best vendors will be eager to make things right as quickly as possible, and to prevent any future issues.
Exclude them from your list of approved suppliers
If your first attempt to solve the issue isn’t successful, you may need to tell the vendor that you won’t be doing business with them again if the shipment doesn’t arrive quickly. Often, the greatest motivator for a quickly delivery is the threat of losing valuable business. But don’t attempt this method if you’re not prepared to back it up. You should also have a list of alternative vendors in your back pocket.
Delay payment until acceptance
Depending on the vendor’s responsiveness to your call, you may need to withhold payment until the shipment is delivered and accepted. Some people recommend applying payment penalties for late deliveries—but there are times when penalties can hurt you. Think twice about penalizing for late deliveries if:
The penalty isn’t relevant to the root cause
You depend on the supplier and they’re integral to your business
You need to avoid an adversarial relationship
Onboarding a replacement supplier is too costly
Helping the supplier succeed provides a better long-term payoff
Motivate Vendors for On-time Deliveries
There’s only so much you can do when the order is already late. But there are steps you can take to ensure your wood products suppliers consistently provide on-time delivery.
Establish a valid measurement system
Track your vendors’ performance for on-time delivery. Develop an evaluation tool that measures delivery, as well as other important factors such as corrective actions, returned items, overall service, packaging, and accuracy.
Establish performance indicators and communicate them to your vendors from the start. When they know what that they’re being evaluated for, they’ll be able to meet your requirements better and provide that kind of service you’re looking for.
Report monthly on vendor delivery performance
Keep your vendor appraised of their performance. The effort you put into communication will come back tenfold. You want a vendor partnership where issues are resolved as soon as they’re identified, and monthly reports are one of the best ways of doing it.
When you approach vendor relationships as strategic business partnerships, your suppliers will appreciate your efforts to make the partnership successful.