I got an interesting email this morning from a reader from India, working on some kind of thesis for her professional training program
I want to know more about how delays and re-inspection affects delivery dates and how can it be controlled?
This is a straightforward question, and I think it might also be of interest to some other readers. So here is my response, in substance.
Delays in production, as well as inspection failures that involve re-work & re-inspections, push the shipment date (ETD) back. And if the transport arrangement is unchanged, it translates into a delay in arrival date (ETA).
There are several types of solutions:
-1- The supplier accepts to send a part of the goods by air (maybe 20% of the order quantity) and the rest by sea, to make sure the importer does not miss sales.
–2- The supplier sorts out the acceptable products, gets them validated by a QC inspection that only targets these products, and ships them first. Then the rest of the goods can be re-worked and/or re-produced properly, with less timing pressure. If necessary, an inspection company can do the 100% check of these remaining products.
-3- The buyer thinks about this risk in advance and takes actions to prevent it (best option): inspections of the first finished products and/or inspections of the first 20-30% of finished products. This is the best way to catch issues early and make sure that (1) the factory is aware of problems to avoid for the rest of production, and (2) the already-finished goods can be re-worked and/or re-produced without involving long delays–hopefully.
You will notice that all these solutions cost extra money to the factory AND to the importer. Receiving the same order in two shipments rather than one (under FOB terms) costs higher in-country freight fees.
QC inspections are often seen as “luxury” expenses, but in this case it is clear they have the power to reduce the total landed cost (if they are used as a prevention tool–see option 3 above).
I would add a fourth solution: select the factory carefully and make sure they understand the buyer’s requirements (both in terms of quality and timing).
Any other tips?
Related post for further reading: Managing urgent shipments in China