3 steps to cover in delivery delay management

It is your responsibility as a procurement expert to systematically track deliveries ; this practice will prevent many headaches and distinguishes proactive buyers from reactive ones. However, there may be times when, no matter how much you’ve prepared, planned, and followed up, you have to face the facts : the expected delivery will be late and there’s a serious need to put in place a management solution to deal with this delay in delivery.

Did the supplier notify you of this delay far enough in advance? If so, that’s somewhat of a silver lining. You’ll be able to put your risk management strategy into action and test its effectiveness. If the scheduled delivery date has passed, but there’s an empty space in the middle of your warehouse where the order was supposed to be, and you weren’t notified, it’s suddenly not so funny. Worse yet, if the production line has to be shut down because of this delay, it would cost a lot of $$$$. 

But don’t worry! J2 is here to help! In this article, we’ll share our 3-step process for handling such a situation without letting the impact get the best of you. 

1. Notify of the delay

The first step is to ensure that communication is established with all parties who need to be informed. Contact the supplier immediately and ask for the reason for the delivery delay. Also, perhaps the order in question, even if it is not completely ready, could be partially delivered. If some items are already available or have been produced, have them delivered immediately! Next, try to set a new date that will ensure the remainder of the delivery is made as quickly as possible. Start with these confirmations, but keep in mind that potential penalties may apply in the event of further delays or other breaches of the commitments you agreed upon. 

If you haven’t already done so, inform the departments that are waiting for the items that they will be delivered late. Be sure to notify the finance and accounting departments so that payment for this specific order is not processed until it has been completed and properly delivered. 

2. Ensure that operations or production will continue 

Once the delay has been communicated to all parties involved, let’s tackle the real crux of the problem. Will inventory levels hold out long enough to allow operations or production to continue until the new order arrives? Perhaps the inventory can sustain an additional delay without interrupting production, and if so, that’s great. 

As a general rule, if inventory management is well-established and its processes are well-oiled, a delivery delay shouldn’t derail your entire production. But that’s in an ideal scenario. Can you confidently certify that the safety stock you’ve planned for is truly… safe? What happens if, much to your dismay, the inventory doesn’t hold up?

All is not yet lost, but it’s definitely time to activate your best problem-solving mode, ASAP :

• – First, can you calculate how much will be missing? Check the inventories of other nearby suppliers. It’s highly likely that your supplier pool includes other players who could come to your aid. Check with them to see if an emergency partnership could be quickly set up. Who knows, this could represent a potential opportunity to develop new partnerships. 

• – Is this a part or item with unique specifications?
• – Could another supplier safely replace them?

Of course, all these solutions are imperfect or require some adjustment within one department or another. It’s possible that you’ll end up paying more for replacement items than you had anticipated in the first place.

3. Adjust your business practices with this supplier as needed.

Once Plan B has been established and communicated, you can consider imposing penalties on at-fault suppliers. Of course, people are human, and mistakes can happen. That said, you may feel the need to realign your partnership with this supplier to ensure this type of situation does not occur again. Open a dialogue with this supplier and establish your boundaries. This may involve revising the terms and conditions of payment and delivery or adding or adjusting a penalty framework.

We all know the saying : don’t put all your eggs in one basket. But in the type of situation described in this article, it might be worth having one or two other suppliers on hand with similar items in their catalogs. Just in case. 

All’s well that ends well? 

One thing is certain : a delayed delivery must be addressed as quickly as possible and should be a one-time occurrence, not a habit. Remember that you are your suppliers’ customers. You always make sure to deliver on time to your customers, so it would be reasonable to expect the same treatment in return. Unless…

You need help establishing delivery or payment terms and conditions? Give us a call! J2 can assist you in implementing practices that will streamline your processes, from supplier selection to delivery!