Case Analysis | Analysis of the Reasons for Supplier Delay in Delivery

“There must be a cause when things happen”, “No waves without wind, there must be fire when there is smoke”, the supplier’s delivery delay is always due to his reasons. When the purchaser encounters a delivery delay, the instinctive response will always blame the Supplier: “Why is the promised delivery time delayed again?”.So, what is the root cause of the delay in delivery? Is the delay in delivery due entirely to the supplier’s fault?

The following situations are the reasons for the supplier:

1.Production status

• 　　The order received exceeds the capacity of the production capacity;
• 　　The production capacity is full and the order cannot be placed into production;
• 　　Because the order quantity is too small, the supplier combines several orders to produce;
• 　　The production technology level cannot keep up with the needs;
• 　　The high defect rate in the manufacturing process leads to the need for rework;
• 　　The production plan is not properly arranged;
• 　　Insufficient number of machines, sudden crashes, or poor accuracy;
• 　　Insufficiency of mold fixtures;
• 　　Unqualified product inspection at the time of shipment

2.Production management

• 　　The source of materials is outsourced and the supply is unstable;
• 　　Poor schedule management;
• 　　The quality control system is not implemented;
• 　　Estimated delivery time is wrong;
• 　　Poor quality of raw materials;
• 　　Insufficient capacity of outsourced factories;
• 　　Low staff willing to work;
• 　　Incorrect shipping documents;
• 　　Quotation error;
• 　　Suppliers lack a sense of responsibility.

The following situations are due to the buyer’s responsibility:

1.Communication and coordination

• 　　The time required by the customer is too short;
• 　　Temporary urgent order, the lead time of urgent order is insufficient;
• 　　Temporary changes to the design or specifications, and insufficient communication on new material specifications;
• 　　Unclear quality requirements;
• 　　Inconsistent understanding of drawings and specifications;
• 　　The production plan is incorrect or changed, and the supplier cannot be notified immediately;
• 　　Unilaterally designated delivery date
• 　　The two parties did not regularly review the progress;
• 　　Failure to provide materials or molds required for outsourcing in time;

2.The procurement process

• 　　Improper selection of suppliers;
• 　　Mistakes in-order delivery;
• 　　The price decision is reluctant
• 　　The purchase price is too low;
• 　　Bad payment terms;
• 　　Poor payment records;
• 　　Insufficient investigation of supplier capacity and technology;
• 　　Unclear orders or requirements;
• 　　Unclear quality requirements
• 　　Not keeping track of progress frequently;
• 　　Insufficient experience of procurement personnel;
• 　　Replace suppliers frequently.

Delays in delivery are often the supplier’s fault, but sometimes the buyer also has considerable responsibility.

For imported products from abroad, delayed delivery is the most common problem. The uncertainty of delivery time has brought a lot of trouble to many purchasers. As a professional purchasing personnel, what aspects can we control the delivery period? How to minimize the risk of delivery?

1.Safety stock

Many companies pursue zero inventory, and it is very necessary for purchasers to formulate product safety inventory. Ensure a continuous and stable supply, and then set a targeted safety inventory for a certain product. Once the inventory is lower than that, the warehouse should immediately apply for replenishment. Allow stock products to be replenished in time before they are exhausted.

2.Logistics impact

Now that the logistics and transportation industry is increasingly developed, it has brought more convenience to many companies. The time of the goods on the way is getting shorter and shorter, but this kind of convenience brings inconvenience to the purchase in a special time period: around the Spring Festival is the most prominent time period in which the logistics and express industry has an impact on customer delivery. Therefore, purchasers need to make advance preparations in special time periods: stock up in advance, urge suppliers to deliver, and prevent holiday factors from affecting the delivery time.

3.Maintain frequent communication with suppliers

When making inquiries, quotations, and ordering contracts with suppliers, it is necessary to have a clear and accurate delivery date. Once the order contract is signed, the supplier is required to strictly implement the delivery date confirmed by both parties.

If there is a huge order amount or customized goods, it is recommended that the supplier schedule the production plan and implement it strictly according to the plan to ensure that it can be delivered on time within the required delivery period. If a major problem is encountered during the period, it is necessary to have a meeting with the supplier to negotiate and make a corresponding solution as soon as possible to minimize the impact of the delivery date.

For example, it should be noted that some industries need to temporarily shut down their production to avoid heatstroke due to high-temperature work, it will affect the production capacity of suppliers.

In addition, more and more people travel and play every summer. Many salespersons also choose to go on vacation with their family and friends in the summer. It is common to travel for a week. At this time, the delivery of many orders is easy to be overlooked, and the communication between sales and factory will easily cause a disconnect, which will cause delays in the goods.

Therefore, purchasers need to frequently communicate with suppliers, pay close attention to them, communicate in advance, and prepare in advance. The hidden danger of delayed delivery will be eliminated as soon as possible.

4.Follow foreign facts

In recent years, many European countries, especially France, have frequently seen strikes by workers in various industries and airport workers, which have greatly affected many air cargo materials’delivery time. So purchasers also need to pay attention to this aspect. If various situations that are likely to cause hidden dangers to the delivery date have occurred recently, it is necessary to propose solutions as soon as possible.

In short, the purchaser should be prepared when placing an order to take precautions.