You’ve placed your order. The supplier indicated a 3-week lead time to produce your goods and based on that you indicated the estimated shipping date on your PO.
You wait patiently for the supplier’s notification that the goods are ready. The agreed date comes and goes, and no contact. What’s up? You email the supplier, and they apologetically explain that they have experienced a delay and the goods will be ready next week. (Let’s hope they are!)
Most people remain passive during the production stage, but you don’t have to. Being active will mean you are able to reduce, anticipate and manage the impact of potential delays.
In this article we will explain what happens on the supplier side during production, what can cause delays, and what you can do about preventing them.
How suppliers manage production
Most often no matter how little customization is required for your product, your order is going to be produced specifically for you. Generally, the more complex the product, and the more customization, the longer the production time will be.
The supplier will purchase the materials that go in your product, configure their production lines for your order, and then run the production. The output of a supplier’s production will depend on their operations management capability, production capacity, how busy they are, and finally how important your order is to them.
Potential for delays
If your product is a unique design or using components which are facing scarcity (which does often happen with certain items, particularly electronics), there is a possibility that delays can happen because the supplier is waiting on certain components before scheduling production of your order.
Once they have all the materials and components ready, they will need to configure their lines to your order. This will mean changing the tools and configuration of machines to suit your product. Reviewing the specs of the order, implementing the standard operating process (SOP) on the line, and briefing the production line workers. While not a high chance of delays at this stage, they can happen.
Finally, and critically, the factory will prioritize orders based on their capacity. Naturally, key customers will get priority, because not producing their orders on time will face risks to their business relationship. This is where many first time and small customers experience delays. If the factory is busy and you are not an important customer, your order has a high chance of slipping down the schedule.
How to Avoid Problems
Instead of just setting an estimated shipping date based on their indicated production lead time, you can review in detail with the supplier the process that they will take to produce your order. By identifying each step, you can, in collaboration with the supplier, set dates for each milestone in the process. Explain to them that you expect these milestone dates to be firm, so encourage them to be conservative and realistic.
Once the milestones are set, follow up with the supplier on or before each milestone and have a video call with them to make sure things are on track. If they can show you on video call the status, great, or at the very least ask them to send pictures indicating the status. This will not be completely fool proof. If they are intending to mislead you, they will. But it will greatly increase your sales contact’s accountability and significantly reduce the risk of the delay as they will then push the production teams to keep to the agreed dates throughout the process. If a delay is experienced, at a particular milestone before the goods are ready, you will be able to anticipate a new shipping date and pro-actively manage the implications of that change.
Naturally, this process does require work, and time spent to manage the process, which can include calls at impractical hours depending on time difference. This can be a burden, especially if you have many orders in production at the same time. You can, alternatively, utilize Checkpoint’s Production Management service which is specifically designed for this case to save you the time to focus on generating product ideas and selling.
