I think they would avoid a lot of bad surprises if they asked for regular updates.
The danger of flying blind
Chinese suppliers know that asking for 3 weeks of delay is usually rejected. The purchaser might respond “if you ship that late, you’ll have to pay air freight”, or “in that case, the letter of credit won’t be valid anymore; the order is canceled”.
So what do savvy exporters do? They don’t reveal the situation clearly and in advance. They wait until 1 or 2 weeks before original ETD, and they announce a one-week delay “because the materials arrived late”. Then another 5 days “because of power shortages”. Then another 5 days “because we don’t have enough workers”. And so on, until production is three weeks behind schedule.
This process can be devastating for an importer who promised a delivery date to his domestic customers, and who has to postpone it again and again.
How to avoid discovering delays at the last minute?
Before issuing an order, you should ask for a few milestones. Here is a list that is probably too long:
- Arrival of all materials/components (and, if relevant, inspection of these inputs)
- Start of bulk production
- Sending of production samples
- 20% of order is finished (and, if relevant, in-process inspection)
- 50% of order is finished
- 100% of order is packed (and, if relevant, final inspection)
- Ex-factory date (at least 2 days after final inspection)
- Shipment date (ETD)
Then, when you reach each milestone, you can ask your supplier whether it was achieved. If not, they should update all remaining dates.
Sending someone in the factory (e.g. your purchaser, an inspector…) is a good solution to check the production status. At the same time, you can verify product quality.
Can you afford to do this?
If you really need to stay on top of production, you should do as described above.
But you need to find the right balance.
If you place orders with many suppliers, you might not have time to follow all these dates. And if your orders are not very large, you might not want to bother your suppliers with so many updates.
In such cases, you can reduce the number of milestones.
For example, you can track these dates: start of production, 20% of order completed, 100% of order packed, and shipment date.
The most important is to keep some visibility over the production schedule.
Maybe some readers can share their experiences?
[Photo credit: http://www.flickr.com/photos/asurroca/51024419/sizes/m/in/photostream]