NPI Supply Chain Craft

Practical Techniques for Handling Late Purchase Order Deliveries

Unless a revised due date is very close after the Recovery Plan phase, there is a danger of an “out of sight, out of mind” situation happening. After all, we Buyers and our Contacts are always juggling multiple tasks. It’s easy to forget what happened the previous day. Regular monitoring and supplier reporting keeps reminding all key people to stay focused on the order until it is finally shipped. Without continual visibility, you run the risk of finding out 1-3 weeks later that the Supplier is now late on the revised due date!

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Quick Links

• Part 1: Detailed Status & Causes
• Part 2: Recovery Plan & Solutions
• Part 3: Main Tactic – Supplier Monitoring & Visits
• Part 4: Tactics specific to NPI & R&D Programs
• Part 5: Miscellaneous Tactics

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In Part 2, I spoke about getting a recovery schedule, Supplier contacts, communications protocol, and setting up a monitoring plan. I also stressed the importance of setting up the meetings electronically in advance right away. That may also include setting up task reminders in Microsoft Outlook or your email software, whether for yourself, other company team members, or supplier contacts. This all gives you the tools needed for effective order monitoring from the start.

When checking status (whether daily, weekly, monthly, etc.), it’s important that you press for and receive all important information. This can include but is not limited to:

• Per the schedule, are the parts at the current process as planned?
• Is the current process on track to complete on time?
• Are Resources (people, equipment, facilities, subcomponent purchase orders) in place for the next process?
• Have any issues occurred in the current process or future processes that cause on-time delivery risk?
• If overtime was offered, are the extra shifts in place and/or are personnel available?
• Are you still awaiting information or response from one of our team members (Me the Buyer, Engineering, Quality, Management)?
• Are there any potential risks with the current process or the upcoming one?
• Do you or your team have any clarification questions for Purchasing or my other team members?

Monitoring can be handled via emails/phone calls, meetings/telecons, or visits to the supplier facility.

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Monitoring via Emails

I recommend emails instead of phone calls for status checks and Q&A whenever possible. Supplier information requests (such as technical ones) cannot be mistranslated this way by yourself; you can just simply forward the email internally and request timely response. By the way, be sure to have the Answerer respond back to you and you’ll forward to the supplier. With your approval, you could have them respond directly to the supplier instead but to copy you. Emails can also be filed in your archives for later reference if problems arise.

Unless you’re deleting unnecessary fluff or non-relevant topics, don’t be one of those people who doesn’t preserve previous emails within an email chain. It can cause confusion or misunderstandings when previous relevant emails are not present on a email forwarded to you or others.

Remember that you, as the Buyer and focal point of the late order, must properly control the communications flow. When receiving email questions or updates from your Supplier Contact, always ask yourself as to whom, if anyone, should you forward the email. Management, Engineering, Quality, Planning, Operations, Shipping & Receiving? No, you don’t want to unnecessarily “clog” other people’s inboxes but you do need to keep relevant team members informed.

If a phone call for status is unavoidable, you should still follow up with documentation as to the key information discussed. With permission, you could record the call (possible these days with operating software or apps) and use the same or other software to put into transcript form. Or, if a short call, you can send out an email to the person you spoke with that summarizes the important content of your phone conversation. They’ll let you know if you got something wrong or will most likely confirm.

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Monitoring via Meetings or Teleconferences

Both methods have their advantages. Scheduled face-to-face meetings keep the late order at the forefront every day or week. As long as people act professionally, it’s easier to establish camaraderie which leads to improved teamwork (cooperation and collaboration). It’s easier to “read” other people when discussing status or vital issues. If you’re a skilled listener, you’re in a better position to gauge the credibility of other Member statements. In-person meetings will more likely engage all attendees’ full attention.

Telecons or “video-cons” (if that’s not an official word, it should be) are much easier to arrange, especially when long distance members are involved. With today’s technology, you can record the proceedings and get a transcript (which I highly recommend to capture verbal commitments and technical discussions). Sometimes, an Attendee will mention a related document or email; if you’re running an online meeting, it’s easy to find it on your laptop or computer and share it on your screen. These type meetings also enable some action requests to be handled on the spot since the Respondent is at their desk or on their laptop.

What should be the frequency and duration of meetings? It depends on the situation (or what is mandated by Management). For our purposes, I suggest one of two types:

• Status Update: Recommended when regular or occasional technical input is needed from Roles other than the Buyer and the Supplier Contact. Usually, Management, Engineering, Quality, a skilled Supervisor or Technician from the floor, and/or corresponding roles on the supplier side. Conducted once or twice a week. Duration 30 to 60 minutes.
• Stand-up: Recommended when remaining lead time is short, there is high internal visibility or customer pressure, and/or multiple players are involved. Responsible Persons (RPs) advise status of actions completed, due today, and due or to start tomorrow ONLY. New issues requiring longer discussion or people are shelved and registered as a task for an RP to start or complete. Only RPs and at least one appropriate Leader (Manager, Supervisor, or Exec) should attend. Conducted DAILY. Duration Goal: NO more than 15 minutes.

Since you’ll usually be the Driver of these meetings, please know how to run a good meeting! There are plenty of articles online, but here are some brief tips.

• Always set up using your Company’s email software.
• Write out a brief Meeting Agenda (activities or issues to be discussed) in the email invitation so Attendees can come prepared and with relevant documents.
• Think carefully about who needs or wants to be there. Don’t invite people who don’t need to be there! You can always ask someone to be on standby if there is a slim possibility of input needed.
• Start and end the meeting on time.
• Keep everyone on topic and don’t let the meeting conversation “drift”. Identify any non-agenda issues that can’t be resolved in 5 minutes, register as an Action Item.
• Request someone to keep minutes (take pertinent notes) or record the meeting/telecon with transcription software.
• Make sure members have input on actions/issues that will affect their Role in some way. Check with each person for any questions or clarifications wanted.
• Without sacrificing important communications, always make it a goal to keep the agenda item discussions moving (with clear and concise status) and to finish each meeting earlier as possible. Let people go if they are no longer needed; smaller groups can hold over for more Q&A. Don’t be that person hated for your long meetings!

I recommend using two administrative tools during these meetings.

1. Action Item Register – Use for identifying and monitoring new action items that pop up each meeting. There are different types of fancy software out there or you can simply use an MS Excel spreadsheet. Suggested Headings include a Reference Number, Entry Date, Category of the action (optional: for example, is it a Buyer, Engineering, Quality, or Management task), a Description, Date Needed, RP’s Name, RP’s Commit Date, Date Completed, and a way to identify if the action is closed or late.
2. Risk/Opportunity Register – Use for identifying and investigation of any Risks or Opportunities that may have popped up. Starter Action Items should be added to the other form to get research started.

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Monitoring via Visits to the Supplier facility

You may want to include visits to the supplier’s facility as part of the monitoring phase. Consider this if:

• The timely receipt of this order is critical to upcoming sales revenue or the customer’s delivery to their customer (i.e. the late order has high visibility).
• The supplier has a track record of slipping not only original P.O. due dates but also revised due dates.
• Your Supplier Contact has a personal history of giving unreliable or ever-changing status updates.
• All or most of the remaining manufacturing processes will take place at the supplier’s facility.
• There are critical or risky operations remaining where it would be helpful to have technical members from your team there for assistance or input.
• You or informed substitutes are available to visit regularly.
• The supplier is not only open to this but encourages it for relationship purposes.
• The supplier is meant for future partnership and increasing business growth and also could provide opportunity for your Quality personnel to help get them more aligned with your company’s quality system.
• Your Executive Leaders or company’s customer requests or demands it.

Of course, supplier location is a big factor. Ability to easily monitor a supplier firsthand should be part of the strategic sourcing activities. If their facility is too far way for intraday visitation, Management might consider sending you or a substitute to the host city or country in order perform daily visits.

Always make the most of your supplier visits since it will take out a big chunk of your workday (including driving time). Here are some tips:

Prepare for the visit. Send your Contact an agenda beforehand of the current processes and issues you’ll be asking about and/or viewing. They or you should suggest a structure (such as quick facility tour, visit to the facility area(s) of current process, and meeting afterward). Give him or her identification copies/info or forms that may be required for ITARS compliance.

Confirm that they and key personnel will be available. Bring the most current schedule, a copy of today’s agenda, relevant blueprint or specification copies, business cards, and notepad/pen. Based on the agenda, invite a relevant Engineer, Manager, or Quality Specialist to come with you if their input or assistance will likely be needed.

During the visit. In my opinion, you should use the opportunity to establish good rapport and a collaborative spirit with your Contact, their Management, and everyone else you meet there. I don’t believe in the bullying or emotionless authoritative approach except in special cases.

Confirm all of your lots’ locations and if on track per the schedule. Ask to see all parts (where possible) at the workstations where they are actually being processed. Learn the basics of the current operation (how, how many, how long, who, when, possible risks, etc). No doubt, you will be asked questions upon your return to your company. If authorized, you can take photos of your parts on certain machines or at certain operations. They are good morale boosters for showing progress to your internal and external customers.

Be friendly to everyone you meet and learn the name of the “Champions” working on your company parts. Since you’ll be coming there regularly, you want to be a welcome face. Plus, people are more open to people they like. If it doesn’t violate any confidentiality rules, convey the importance of the job in the big picture. For example, it may be inspirational to a machinist to know that they’re working on a part that will eventually be used in NASA spacecraft. It may be appropriate to offer some of them (like a Quality Manager or a Machine Shop Manager) your business card.

Talking at length and candidly with your Contact and others during the tour is also a good opportunity to identify strengths and weaknesses that are either directly relevant to the late order or to the supplier in general. Think of it like reconnaissance. This could be in terms of job processes (including bottlenecks), facility, equipment, management, human resources, order handling, shop planning, or material management. With their pertinent equipment, system, and experts right there, you can also focus on current technical or quality issues. That’s where your invited Expert comes in handy.

After the Visit. Remind the supplier when you’ll be back again and a preliminary agenda. If there were any changes, you’ll want to get an updated schedule. After your return, there may be new Action Items to immediately request of fellow Team Members. You should also email a quick summary status after each visit to the Team.

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Monitoring International Supplier Orders

For reference, I write these blogs from the perspective of working in the USA. Working with international suppliers is a blog topic onto itself, however, here are some additional tips pertaining to the monitoring of delivery schedules (whether late or not).

• Language. If you can’t speak their native language and are relying on the Supplier’s ability to speak English, find out if anyone in your company also speaks the supplier’s language. It would be handy to have that person attend your meetings and listen in for any translation clarifications or to understand background supplier talk in their native language. Plus if this a long-term supplier, why not use the opportunity to start learning the basics and key business terminology of their language? There are software applications out there these days that make it easier and quicker to learn a new language.

• Holidays/Labor Laws. Learn about the supplier country’s holidays and labor laws that may impact the schedule. I once worked with a Swedish supplier, for example, that shut down a full month due to national Summer Holidays. Also, the country may have labor laws that restrict overtime work.

• Logistics. Shipment Logistics from foreign countries to the United States is more complex than U.S. state-to-state logistics. Communicate at length with their appropriate expert to find out every step involved in shipping your late product. For every “hot” item I ordered internationally, it seems that the transit lead time ALWAYS took longer than advised by the supplier. Ask the supplier to use logistical services that will enable you to track the order online. Also, your company’s Export/Import Expert or Shipping Manager may have freight forwarded contacts who can help expedite a hot order stuck at U.S. Customs.

• Import License. This can be a major on-time deal-breaker to on-time delivery, especially if your company is dealing with foreign suppliers for the first time. Import license requirements and request submittal/approval should have been handled much earlier in the procurement cycle. If not, immediately contact and work closely with your company’s Export/Import Expert on any requirements and action items.

• ITAR Data Sharing. If your U.S. company or program manufactures defense and space-related products described in the USML (United States Munitions List), you must be careful about sharing applicable technical data (like drawings or specifications) with international suppliers (whether digitally or verbally). There are actual required forms and verbiage to use as well as certain information that may NOT be shared (possibly at worst-case risk of imprisonment). Keep this in mind on ANY interactions with your international Contacts, regardless of location (the USA or their country). Consult your ITARS Officer as needed. I plan to cover both Import License and ITAR (International Traffic in Arms Regulations) requirements for Buyers in another blog.

• Culture. Before interacting with foreign supplier contacts, do some research on their country’s cultural differences that may impact communications or success of the order monitoring process. It will put you in a better position of influencing, collaborating, and negotiating. Take into account their tendencies toward negotiation, etiquette, religion, organizational hierarchy, communications style, work ethics, age and status of other company counterparts, business decision-making process, among other things. You don’t want to accidentally but ignorantly offend foreign Suppliers that you’ve been pushing to make up for lost time.

• Their Supply Chain. It’s good idea to generally understand their own supply chain involved in order for them to complete your late product. The more you know, the better your company can act proactively to mitigate other actual or potential delivery/quality risks as well as track progress. For example, do they import any of your product’s subcomponents from other countries that experienced major disruptions? Back in 2005, I discovered that the 2004 Indian Ocean tsunami caused long-term manufacturing delays of particular semiconductors (manufactured in Asian countries), which caused shortages at electronic distributors, which caused our circuit board supplier to start slipping due dates. Once this was understood, I was in a better position to press for alternative solutions internally and externally to regain lost lead time.

When doing more than simple email or phone call checks, organized and comprehensive supplier monitoring and visits can be a powerful method for not only recovery delivery schedules but also critical supplier orders that MUST arrive on time. Contributors to success are usable status information, the best-suited means of communications, proactive monitoring, and good supplier relationships.

In Part 4 of this blog, I will cover other NPI & R&D program tactics that you can use for improving late purchase order ship dates from the supplier.

To be continued. Stay tuned for Part 4!