Delivery assumptions may be dangerous to your business!
I recently had the experience of explaining to a good customer why her assumptions about deliveries were not relevant to current operating conditions. Upon reflection, I have to giggle a bit because I made the very same assumptions when ordering from a vendor recently. One would think, with business as slow as it is, that production channels would be wide open and , subsequently, deliveries would be quite speedy. When I went to order some custom colored yarn from a specialty spinner I had that assumption in mind. I called my salesman and we had the usual discussion on the economy and I then said" I know you normally quote 4 weeks, but considering how slow it is will I see it in two weeks? He laughed, and said "well, actually, we have laid off half our people, the plant is running only one shift, and we have depleted our colored stock and are only ordering it as we need it, so your delivery will be closer to 8 weeks". Now, my customer, who needs fabric from this colored yarn made into garments, waited until he was depleted of inventory and for an order to come in before contacting me to make more. He assumed I had some fabric on the floor awaiting his order, which he expected filled in 3-4 weeks. I, in turn, had depleted our fabric inventory in that color on his last order and did not replace it on speculation like I normally would, as his ordering had slowed to a trickle and we were at the end of the ordering season.
What is the lesson here? If you want to insure you do not lose orders due to out of stock positions and are counting on rapid just in time response from your vendor you might want to discuss your needs and expectations with that vendor now. They may have laid off workers, cut shifts, or even be operating three days a week. Dyers and finishers have to fire up boilers and often would rather shut down certain days than run short shifts. Vendors supply inventories are being managed much closer, as carrying costs are a controllable cost factor. The supply chain may repeat in this manner so that delays from the source compile with each hand they pass through.
In times like these it becomes imperitive to remain in close contact with the vendors you most rely upon. You need to communicate the position you are maintaining and your expectations in regards to deliveries so that an understanding of the likelihood of meeting those expectations is clear. Do not expect your vendors to have the supernatural ability to forecast your needs and have the resources to bear the costs of dedicated inventories. Partnering is a sure way to insure the path to on time delivery will remain open.
posted by Geoff Krasnov at 10:04 AM
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