Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 17, Issue 20;   May 17, 2017: Unresponsive Suppliers: I

Unresponsive Suppliers: I

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If we depend on suppliers for some tasks in a project, or for necessary materials, their performance can affect our ability to meet deadlines. What can we do when a supplier's performance is problematic, and the supplier doesn't respond to our increasingly urgent pleas for attention?
Boeing 747-409LCF Dreamlifter at Edinburgh Airport

A Boeing 747-409LCF Dreamlifter (one of four produced) lifts off at Edinburgh Airport. Boeing uses the Dreamlifter, which is an extensively modified Boeing 747, to transport sections of its 787 Dreamliner, which are being engineered and manufactured at multiple locations worldwide. The supply chain includes companies such as Mitsubishi Heavy Industries and Kawasaki Heavy Industries in Japan, Alenia Aeronautica and Global Aeronautica in Italy, Korea Aerospace Industries in South Korea, Boeing in South Carolina, and many more, for a total of about 50 suppliers. The complex of issues involving multiple suppliers has been so difficult to manage that initial delivery of 787s was more than three years late. I've found no reports of unresponsive suppliers, but one can certainly speculate about the frequency of difficult teleconferences for any project of this size (USD 32 billion) that runs over three years late. For more, see the Reuters Special Report, "A Wing and a Prayer: Outsourcing at Boeing."

Unresponsive suppliers are the bane of project schedules. Most planned organizational efforts must meet some sort of schedule. Efforts called projects usually have detailed schedules, which we take very seriously. But the schedule performance of any such efforts that require contributions from outside parties — generically called suppliers — is dependent on the schedule performance of suppliers. Problems can arise when a supplier fails to meet its commitments and doesn't respond to attempts to resolve the matter.

Three guidelines help to make solid relationships with suppliers:

  • Ensure that the relationship rests on a firm foundation of mutual respect
  • Maintain clarity and ease of communication
  • Be easy to work with and make only reasonable demands

Here are some tactics for preventing the problem of unresponsive suppliers, or dealing with it if it develops. In this Part I we explore the foundation of the relationship.

Verify that the relationship is in good standing
Before escalating any issue, consider the possibility that the supplier might be acting reasonably. Has your organization been paying its bills when due? Is any legal action underway? Is the contract still in force?
Ensure that the contract (if there is one) gives you what you need
A contract requiring that the vendor provide the level of service you'll actually need is helpful, not because it has any force, but because the supplier's having agreed to it usually means that you will be paying a fair price. If the contract doesn't provide what you need, seek a renegotiation. If that isn't possible, identify schedule risk in your risk plan and state that the risk can only be compensated, not mitigated. This is especially relevant in the case of long-term contracts such as leases of real property.
Know who in your organization can apply pressure
If you lack Threats you're unwilling
or unable to execute
are risky
sufficient clout yourself, determine which people in your organization can credibly press unresponsive suppliers. Let these people know well in advance that assistance might be required. Keep them informed of the scale and expected value of the damage that can result from the supplier's unresponsiveness.
Do not threaten idly
Threats you're unwilling or unable to execute are risky. If your supplier decides to test your resolve, and you don't follow through with your threatened action, the result will only damage your credibility.
Consider alternative suppliers
If your organization is a tiny portion of your supplier's sales, or if the supplier has other more pressing and lucrative accounts, getting the service you need might be difficult. Switching to an alternative supplier (if possible) might be the best available solution, even allowing for any consequent delays and rework. Run some projections to make a careful decision.

Next time, we'll turn our attention to preventive communication practices. Go to top Top  Next issue: Unresponsive Suppliers: II  Next Issue Next in this series

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