Outsourcing is a common business practice but it requires great skill.
The right supplier can put your mind at ease. The wrong one or a mismanaged one can drive a person mad!
World class customers effectively communicate.
Over and over again, they express their expectations, schedule, risks and costs with their suppliers before entering into a contract.
They also listen to their suppliers’ concerns in the same areas. Recovery plans are documented and understood by all parties before the ink is applied to the contract. Contracts are entered into with everything in writing and nothing is unambiguous.
On occasion even the best suppliers miss deadlines.
World class equipment, processes and people do not always perform according to expectations. When a deadline is missed, a world class supplier will distinguish themselves from the competition.
Once the supplier admits or is made aware of the situation, it is up to them to make things right.
You should afford them the opportunity. They will communicate effectively the nature of the problem, solutions and what to expect in the near term. These suppliers understand the importance of their relationship with you, the customer. They will own the mistake and recover in short order. To make things right, they may offer a partial shipment, a discount on this or a future order as well as pay for expedited shipping.
If a situation arises where the supplier does not step up and make things right, then the time has come to replace them.
It is a good practice to have relationships with multiple suppliers capable of providing the same service as well as one or two who can step in when needed. Contracts should have clearly defined penalties for late delivery and work disruptions.
Deploy these when necessary and only after seeking the advice of a qualified attorney. Once these clauses are in play, the relationship is likely very close to ending. Lawsuits in supply chain management often depend heavily on consistent contract enforcement.
Abide by your own contracts and be consistent for best results. If there clauses in your contracts you aren’t willing to enforce, then your best bet is to not include them.
Image source: Graphicstock.com