University Degree in Business Management,
3 years in sales and management in jewelry, telecoms and trade sectors
6 Years in V-Trust as account manager and sales manager
Apr 03, 2013
Almost every buyer has met with the delayed delivery problem before. It is such a headache especially when you are purchasing seasonal items or products for important projects. As a matter of fact, not all delayed shipments were caused unavoidably. Sometimes, the manufacturers have internal communication problems and make mistakes in the production arrangement; sometimes, the factory rushes other customer’s orders/production while delaying yours. We have some tips to help you solve these problems.
Our advice is that you should extend the message to the factory clearly that you are very serious about this order and they need to pay a lot of attention in following up with the production. How can you do that?
Make use of L/C terms to specify the supplier’s responsibility of sending the goods on time, in order to catch the agreed latest shipment date. Normally, the sales person will take initiative to follow up more closely with the orders that are with L/C payment terms. Even though the suppliers still have the chances to request the customers to change the terms afterwards, they are still additional obstacles.
What if the suppliers do not accept L/C payment terms? Besides L/C, the most widely used payment terms is “30% deposit before production, and 70% against B/L “. In this case, you can still include the shipment schedule requirement in the contract. For sure the latest shipment date is agreed on by both you and the supplier. Meanwhile, you could agree on the penalty clause for the delay shipment. For example, if the production is over two weeks late, the penalty amount is XXX.
Keep checking the production status from time to time. Even if you already have a perfect agreement in advance with the supplier as suggested above, you should not just wait until the shipment day. You could ask the supplier to send you a rough production plan when placing the orders. Then, during the production, you could check with the suppliers if production is going as they had planned. For sure, such communication should not just be based on words. You can request that they take picture of the pre-production samples, semi-finished parts, packaging materials, production samples etc. for reference.
Arranging a during product inspection of your goods. You could entrust a third party inspection company to make quality check at the factory. The inspector can visit the factory site to check the quality of the products, as well as checking whether the production status is going smoothly to catch the planned shipping date. Actually, there is no need to wait until the inspection finishes for uncovering the production delay. The factory would admit at the moment when the inspection company contacted with them to confirm the inspection date.
A few additional methods you may find useful are:
- For some big projects you may consider sending your own staff or a reliable inspector to stay at the factory for an extended period of time and send a daily report.
- When you place the order give yourself a little lead time for any possible delays that may occur.
- In your contract mention that if products are not produced in time, the factory has to pay for air delivery directly.
- Understand Chinese holidays well so that you can plan ahead for these necessary delays in your shipment. Many delays are easily avoidable.
- Sometimes the factory slows down production because they do not receive confirmation from you in time for issues like: logo, packaging, user manual, approved production sample, forwarders information, or due to payment issues… So make sure you do not delay your own shipment with poor communication.
Following these basic rules will certainly help to make sure your shipments are on schedule. Most problems are not unavoidable with good planning.