Suppliers that don’t deliver on time are part of the everyday business landscape – while we all strive for 100% OTIF (“On time in Full”) – it doesn’t always happen which means we are often left with some suppliers that don’t make the grade. Faced with this situation how should we deal with such suppliers? It’s easy to say we wont deal with them again but that’s not always possible so you need an action plan.
Here’s 6 techniques to help you deal with poorly performing suppliers
1/ Set clear expectations and consequences
Firstly ensure that you have established your expectation e.g.
• Did your supplier know when you expected delivery and had they agreed to that date?
• Did all parties understand the shipping terms/delivery requirements/ship to location?
• Did the supplier understand what (if anything) would happen if deliveries were late? (e.g. financial penalties etc)
2/ Be prepared to interrogate
Talk to your supplier – find out what went wrong – communication is key to understand the issues and to ensure you don’t suffer from them again – simply leaving it and hoping for the best next time could spell disaster
3/ Understand the route cause
Why did the supplier fail to deliver on time – was it manufacturing processes, failure to procure parts on time? Find out the key contributory factor. If your going to be using the supplier on a regular basis – understanding what went wrong and ensuring a fix is put in place is imperative.
4 / Provide feedback on performance
Regularly communicate out to your suppliers and tell them what you believe their delivery performance is (be prepared for some difference of opinion!) – ensure that as part of this communication you state what your expectation is.
5/ Be prepared to take criticism if your part of the problem
If you have process issues be prepared for your supplier to place some of the blame on you – try to put things into perspective – understanding the issues on ALL sides is crucial if your going to improve things – don’t expect the supplier take all the criticism if they are not entirely to blame – ensure that if you do have issues you have appropriate plans to fix them.
6/ Follow up
Have regular reviews – if you have a poorly performing supplier – and you have identified the issues – follow up regularly to ascertain what improvements are being made and how they are impacting results. Consider having periodic business reviews where you can assess the trends and tailor improvement activity accordingly.