Joe has done an amazing job taking over a company that was in trouble and getting it solidly back on track. His laser focus on product quality and customer service has helped him triple his customer base and increase his revenue tenfold. He has outgrown his manufacturing space – twice in the few years that Joe has been a customer of ETM Manufacturing. As you might expect, Joe has had his challenges.
Recently, we accepted an order from Joe and production has been delayed waiting for tooling and artwork release. Despite the delay caused at his end, Joe’s customer still expects ETM to deliver his order on time because he now finds himself up against a shipping deadline that could put his reputation on the line.
As sheet metal fabrication suppliers, we are often caught between Joe’s struggle to deliver to his customers, and our struggle of delivering to him despite not having received everything we needed on time from him. What can Joe do to make sure we get the parts to him as fast as possible so that he can get that shipment to his customers within reasonable time?
Here are a few options he can choose from:
Option 1 – Inform the Customer that the Shipment will Be Late
While delivering bad news is never easy, informing the customer up-front provides the customer with more time to plan for the delay. With this option, parts are not rushed, inspection is not rushed and quality parts will be shipped. Expediting costs such as overtime will also be avoided. There’s only one but a rather colossal downside to choosing this option: Joe’s reputation of providing great customer service might suffer considerable damage.
Option 2 – Spend ‘Whatever It Takes’ to Ship On-Time
This option involves throwing money at the problem, which covers unlimited overtime and offers to expedite. While this may sound good in theory, to my surprise, very few employees want to work a lot of overtime. Maybe this is a part of their family values or could be a direct result of millennial priorities affecting work. In some cases, employees that are already working overtime, reach their maximum working capacity. The same is true for expedite fees. Many companies are happy to help when they are not busy, but afraid to promise to expedite because they may not be able to pull it off. How would you feel not receiving your order on time despite paying a higher price for faster delivery?
Option 3 – Call In Your “Favors”
Sometimes this involves a simple phone call to a senior manager to remind him or her of the long-term relationship you’ve shared with them and what this means to the relationship. Sometimes it is the promise of additional business (i.e., if we ship this on-time, there is all this other business we can win). Sometimes an emotional plea could do the trick. We are all familiar with these tactics, maybe used them ourselves, but we also know that they can only be effective if used infrequently because there’s only so many times Joe can pull out a wild card!
Option 4 – Manage Your Suppliers
In some cases, customers ask us for our best possible timeline and we stretch to give that to them. This is typically followed up with a request to update the schedule daily (or even multiple times a day). We are all aware that micromanaging demotivates our employees, and the same is true for custom sheet metal fabricators. It feels like we are being “punished” when asked for daily updates because they interrupt our momentum in producing parts, when we are essentially busting our butt recovering from a time delay we didn’t cause. This discourages us, as suppliers, from providing Joe a best-case scenario, just to avoid the daily update “beatings.”
In working with your suppliers, haven’t you all been in Joe’s position at some point or the other? Delays happen, they could be inevitable at times, and you may not even be directly responsible for them. But, ultimately what matters is – were you able to successfully deliver the order to your customers, albeit a little late?
In Joe’s case, he has done a reasonable job of using all of these options in a way that works best for him, his customer, and his supplier. He has already reached out to his customer to let them know there was a week’s delay but he is constantly working to reduce that delay. He has offered to pay expedite fees for delays that his company has caused. He has called in favors with his anodizer to help expedite something that would normally take us longer to achieve. And, he is helping us make decisions as and when they occur so that there is very little time delay in production. His courses of action clearly explain why he has been growing so successfully.
ETM Manufacturing is dedicated to helping our customers remain competitive by providing products, services, and support for companies who want more from their supply chain management consultants.
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from ETM Manufacturing http://etmmfg.com/3780
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