How to deal with ôlyingö vendor? 1

[Cutiee]

As an E&I engineer, I often have to call up sub-vendors to get quote and order instruments, I noticed that quite a lot of times the goods didn’t come on the delivery date they “promised”, some even weeks out. Once my manager told me that some companies would “lie” just to get your orders, then find all kind of excuse for the delay of delivery.

I’m young, inexperienced, just out of university, and a female, I was told I sounded younger even; I’m generally very nice and a big softy. My colleague have suggested that I should be firm, strong, “aggressive” if necessary, as I’m the buyer, but I found it’s rather difficult, it’s not my personality. Sometimes the vendors gave me attitude just to get me off the phone; I didn’t know what to do.

My project manager kept pushing me, I wanted to get the work done asap as well, but my words seemed so “weak” to the vendors. :s

Any advice? Many thanks.


Cuttie

 

[ScottyUK]

Put a clause in the contract making time 'of the essence', a phrase which has a specific legal meaning if they renege on the agreed delivery date. They'll probably object to it: ask them why they object, then refuse to take it out. See how much they want the business.

Ask your peers - find out who the bad suppliers are. I have a mental list of suppliers and / or sales staff who I'd approach first time every time, then some fallbacks, ones I'd rather not use, and ones I'll use right after hell freezes over.


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If we learn from our mistakes I'm getting a great education!

 

[GregLocock]

Much as I enjoy working with suppliers, much like I enjoy going to the dentist, I'd have to say writing a good contract always helps.

In a large organistion do not trust your buyer to write a good contract, check it yourself.

Be aware that if you write a sufficiently good contract the supplier with whom you have been working may well walk away rather than sign it, or will play brinkmanship to get the good clauses taken out.



Cheers

Greg Locock

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[monkeydog]

Dogs bark,
Ducks quack,
Black Widow spiders eat their mate,
Vendors lie.
That's the cycle of life.
Once you accept that, then you can deal with them. If you find a vendor that is up-front and honest, keep an arms length.

 

[cranky108]

A good purchasing department can help with that. Other wise make out a list of who's late on what, and use it in product evaluations.

Some larger companies that I've delt with, the sales people will tell you the delevery they have been told. They don't have control of that.
But smaller companies do, and some just lie to get your business.
If the quoted delevery time is much shorter than the others, then ask why.

You can always cancle an order on the grounds they did not meet the expected delivery time. Do this once and it gets there attention. (The legal people need to stand behind you).

 

[GregLocock]

You can only cancel an order, realistically, if you already have an alternative source lined up.

I rarely have that luxury, in other words, the original vendor, late, is still going to be quicker than an alternative vendor. So you grit your teeth...

Cheers

Greg Locock

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[melone]

Another avenue is to make it uncomfortable for your vendor whenever their delivery date slips. Call them every morning and evening asking for a status update on your order. Reiterate that "by not meeting their commited delivery date, they are causing your project (state dollar value for the entire project) to slip day for day. This is unnacceptable, and that you are getting pressure from your upper management to get this problem resolved."

Ask them what they are going to do to solve this problem. If they ask you "what do you want us to do", then tell them to solve the problem. It's THEIR problem, and THEY need to fix it.

Now, all of this can be done / said in a very professional manner. Remember, the person you deal with on the phone may not have ulimate control over the slips in schedule, but you must impress upon them your displeasure, and how unnacceptable this situation has become.

This has worked for me in the past, and I don't think that it has adversely affected my relationship with any of my vendors.

 

[dvd]

A brief rant:

I think that a big problem engineers have is that they think every other being in the world is incapable of getting the job done. Why should an engineer be involved in purchasing? I maintain that engineers will be walked on by management and outsiders because they don't stand up to people and tell them to do their own job. Companies have purchasing departments that should be able to negotiate price and delivery on items which are specified by engineering. Start demanding more out of others. A company should have purchasing agreements that spell out the penalties for late delivery; this doesn't have to be an engineering function.

 

[Cutiee]

thanks, all

yeah i agree with you GregLocock, that's why i have to put up with the vendors

Cuttie

 

[Cutiee]

(we're a small company)we do have contracts. just spoke to a colleague, he said it's just not worth of taking legal action over delayed delivery (possibly it will take very long and may not even get anything from it) and just who's going to do it?...

Cuttie

 

[macmet]

I do something similar with to what Melone does. I call daily. Email daily. Ask question after question. I also am a big fan of the CC option. Most people are more accountable if they know their boss knows exactly what is being said.

I had one vendor/distributor that was so bad that I just called the company and spoke to the manager of sales (his boss) and said I had to buy their product but refused to do it through the local rep. I told them I was sick of the guy's lying and inability to provide any information to me and I'd be more than willing to spend the extra 15% at another company if it meant I could trust what I was hearing. That worked. I got my info the next day, the delivery is on time (so far). I'm getting updates with pictures. The manuals and drawings have been on time. I make sure our contact knows that the sales manager knows exactly what is going on by CC'ing him on everything.

 

[MadMango]

Test out other vendors until you find one that delivers a quality product on-time. Be aware though, that you can't pass judgment on only one successful delivery, as the new vendor might have dropped everything to get your project done first, knowing they had to put their best foot forward.

I regularly tell vendors that I need a realistic delivery date, and if you tell me "tomorrow" that is what I will schedule other activities around. If they don't think it won't be completed until 2wks, then tell me "2wks" and I will schedule accordingly. If they happen to deliver in 1.5wks, then we are all happy and we also have a good impression of them.

"Art without engineering is dreaming; Engineering without art is calculating."

Have you read faq731-376 to make the be

 

[KENAT]

Greg brings up a good one - the contract. I'm no contract lawyer but reading through contracts and related documents, from both sides, I've been amazed by the glaring holes etc in many of them. Of course enforcing them is another matter but at least if you set the ground rules you have something to stand on.

I hate hassling vendors too, as I hate to be hassled, but sometimes you've got to do it (hassle may not be the right word but you get my point).

Do remember though that there's a good chance it's not directly the fault of the person you speak to at the vendor, so be firm etc without going to far.

Many companies keep track of things like on time delivery to build up supplier profiles etc. This then links into approved suppliers and the like. Dont' get me wrong, this can be a pain and get OTT but it sounds like some effort to keep track of vendor performance might help avoid this in future, or at least help you manage it. For instance if you know a certain vendor tends to be a week late but gives good quality/cost then maybe you just make a note to always order parts a week early.

KENAT, probably the least qualified checker you'll ever meet...

 

[btrueblood]

I've been on the receiving end of contracts with penalty clauses, and (more rarely) performance awards for on-time deliveries. Both methods kept the projects on schedule, as the management knew we would lose money if the schedule slipped, and this added weight to priority/schedule decisions. The bonus method worked somewhat better (we were able to pass a share of the bonus all the way down to the line workers, and told them so). CalTrans rebuilt collapsed highway bridges (after the last big 'quake) in record time, using a bonus/penalty system.

Add a line item to your po, adding 5% for delivery made before due date, and another line item subtracting 5% from invoice payments if more than 1 week late, or similar. See if you can get it through your purchasing/bidding system.

My current boss, the owner, uses the harrassment methods, to good effect. I don't bother, I just tell suppliers that I will not continue to send them work if they miss deliveries, and then stick to my words.

I have wanted to add a line to the terms & conditions of our purchase orders, stating that payment of the invoice will be delayed by (some multiplier of) the same amount as deliveries from the supplier were delayed past the quoted lead time. Dunno if it could get thru the purchasing system either, but I bet our accounting department could make it work.

 

[jmw]

Manufacturers have curious ideas about delivery and customer service and often measure the wrong thing.

They will not commit to a firm delivery unless forced t do so because they cannot project what the state of the order book will be when your order finally reaches them.
Then they will acknowledge a date given by production which is projected based on current order input and inventory.

Now most manufacturers measure their success and pat themselves on the back for meeting their own delivery dates and even think they are doing exceptionally well if they deliver early.
Of course, an early delivery means an early invoice so the big push is always to get stuff out of the door on the last day of the month because then they can chase for payment for the end of the next month.

SOme wher in there they don't seem to recognise that the true measure of a good delivery isn't simply meeting the promised date, or meeting some arbitrary lead time they have cooked up for themselves, but (and this is a difficult concept for manufacturers to grasp) a good delivery is the date the client wants. Not a day earlier nor a day later.

If the client wants ex stock then offering 4 weeks and meeting 4 weeks is not a success.

However, for projects, planned delivery dates allow for suppliers meeting delivery promises. Some purchasers set up the order sequencing based around the quoted deliveries.
So if the manufacturer quotes 8 weeks and the item is not wanted till 14 weeks they will place the order in 6 weeks. They could place the order at 14 weeks and specify a dleivery date at 14 weeks but for some reason manufacturers often treat this as an opportunity to "exceed expectations" by delivering early.

One company I worked for quote 6-8 weeks as standard on all items. Sometimes they got lucky and met these promises.

Came the day they were to move the factory they did a lot of calculating and built up a buffer stock. However, they forgot to tell sales what to do with it.
As soon as sales found stuff was in stock they quoted ext stock.
Curious feature, they sold all the stock that was supposed to last them through the factory move. Evidently (to you and me) increased sales meant that clients liked ex stock. The company never learnt from this. They just went around blaming sales and once the factory move was complete went back to their old ways.

There is a caution here, every client is also a supplier.



JMW

http://www.ViscoAnalyser.com

 

[MikeHalloran]

... Which is one of the astounding beauties of a JIT line that's running right. On the day you place your order, you get a delivery date that's pretty much ironclad. Really.







Mike Halloran
Pembroke Pines, FL, USA

 

[zdas04]

When I was managing projects I always got the ship date, shipping method and expected delivery date in writing when I placed the order. Then (on multi-month lead items) I called the vendor every week for a month before the ship date and every day for the week before the ship date. I used e-mail with long cc lists when it looked like a problem was cropping up.

You really don't have to be nasty, it rarely works anyway. Call regularly, be plesant, talk to them like people, get to know them a little (it is much harder to stiff good-ole-Dave than faceless "AMOCO"). It is amazing how little time this takes out of your day.

And while many companies have Purchasing Departments to deal with this kind of crap, it is your project that can fall off the critical path waiting for a widget. Saying "it is Purchasing's responsibility" only brings up the next question "you are the project manager, what are you doing to encourage Purchasing to perform?".

David

 

[Cutiee]

What’s happening with my current project is that the vendor forgot to acknowledge two of the items I ordered, so I called them, they told me it will only take a week, as they had them in store, but few days later, I was told that they actually didn’t have them in store, so the delivery is going to take longer. After about a week, I got the acknowledgement, stated delivery date is 5th of August, so I gave them a call to see if they can get a better delivery date as its quite urgent, but they told me the items in fact wont be delivered till 12th of August, the reason behind it is “we’re very busy at the moment”…

It is a very big and well known company, lots of our clients ask for instruments from this company.

Cuttie

 

[epoisses]

I am a vendor Let me show you the situation on the other end of the phone line.
If I deliver 1 day late I can cause a multi M$ cost (oil refining is big money and nowadays bigger than ever). And again on day 2. And again on day 3...

I don't even look at some 5% clause in a contract, because (1) it won't cover my customer's losses and (2) I don't need it to deliver in time. I don't lie about delivery dates to get a PO, on the contrary I take big safety margins and if ever the safety margin is eaten for some reason, I do everything possible and impossible to deliver in time, because our reputation is at stake and reputation is essential to create confidence in this business.

Now WE are small and our customers are very big, it obviously makes their position much easier, but we are "very busy" too and have to set priorities.

How to deal with a vendor that is "very busy"? It's actually much better to be "very nice" than nasty, I usually put the @$$holes at the bottom of today's to do list if I can. If you're in need of urgent delivery, call them, get the right person on the line, note their name, explain the urgency, if necessary ask a "favor". Confirm in writing, call back a few days later to follow up. Make them understand that respect of delivery timing is very important and will be taken into account in vendor selection for next orders (which means of course that you should really do that: log each vendor's performance and use that info).

Also, as David wrote: it is very important to get to know them. Invite them over or come over to their site (can be very instructive). Create a good relationship. And if they are very big and well-known while you are not, they might just be a size too big for you, select a vendor that matches you better.

And yes, if the sales guy is hopeless, you can always bypass him and contact his boss, but don't expect any decent service from the same guy on a next occasion.

 

[Cutiee]

thanks epoisses =) It’s very helpful to know the other side of story.

How to build a good relationship? I’m a little shy, but whenever I call up the vendors, I always ask "how are you", and that's all i can think of to say, then we go down to business.

"Small" vendors seem to be very nice, and easy to get on, and sometimes their salesman would come to the company for a chat. but "big" vendors often have the attitude "I’m too busy to waste my time with you on the phone"

I’m always very nice to vendors on the phone, but questions like "why is there a delay", "can you get a better delivery time" etc seem to annoy the vendors easily.


Cuttie