1.

Communication and Collaborate

It’s important to understand the root cause of the problem before you take any remedial
action. This is especially important if you have a good working relationship with the
vendor. Call the supplier immediately and ask questions to understand why the late
delivery occurred. Ask if there’s anything you can do to help resolve the issue, either now
or for the future. Your best vendors will be eager to make things right as quickly as
possible, and to prevent any future issues.

2. Exclude them from list of approved suppliers

If your first attempt to solve the issue isn’t successful, you may need to tell the vendor
that you won’t be doing business with them again if the shipment doesn’t arrive quickly.
Often, the greatest motivator for a quick delivery is the threat of losing valuable business.
But don’t attempt this method if you’re not prepared to back it up. You should also have
a list of alternative vendors in your back pocket.

3. Delay Payment Until Acceptance

Depending on the vendor’s responsiveness to your call, you may need to withhold
payment until the shipment is delivered and accepted. Some people recommend applying
payment penalties for late deliveries—but there are times when penalties can hurt you.
Think twice about penalizing for late deliveries if:

 The penalty isn’t relevant to the root cause

 You depend on the supplier and they’re integral to your business
 You need to avoid an adversarial relationship
 Onboarding a replacement supplier is too costly
 Helping the supplier succeed provides a better long-term payoff
4. Report Monthly on Vendor Delivery Performance

Keep your vendor appraised of their performance. The effort you put into communication
will come back tenfold. You want a vendor partnership where issues are resolved as soon
as they’re identified, and monthly reports are one of the best ways of doing it.

When you approach vendor relationships as strategic business partnerships, your

suppliers will appreciate your efforts to make the partnership successful.

5. Be Proactive, Not Reactive

A reactive production process results in catching errors too late in the production cycle,
which widens the scope of recovery. Being proactive affords manufacturers the flexibility
required for just-in-time delivery, for example, early and preemptive component auditing
and purchase order (PO) validation. Fostering an accurate and efficient design for
assembly (DFA) process is crucial for catching inconsistencies in product design before
actual assembly.