Unresponsive Suppliers: III

We usually regard the individual suppliers in a supply chain as having a commercial orientation, which can motivate them to please their customers. One clear exception is the large entity that dominates its markets, because such entities are often less susceptible to this mechanism. Another exception perhaps overlooked and more commonly encountered is government. Organizations that need approvals, licenses, permits, or information must sometimes wait for service or for responses from local or national governments. And when government action is delayed, project schedules can suffer.

The obvious items include patent grants or drug and medical device approvals. But let's consider three of the more mundane items, which are more numerous and therefore more likely to affect projects.

Passage through customs

Many organizations send equipment across national borders to support partner organizations that perform project work under strategic agreements. For example, if software is developed in one country and tested in another, the testing organization might require a validated test environment, often including a replica of all or part of the hardware of the finished product. If the developing organization sends that replica to the testing organization, the replica must pass through customs in the tester's country, which can take time.

Shipping the item well in advance of the required receipt date can help avoid delays in passing through customs. To determine in advance how long the process takes, send a dummy replica — one that's incomplete, obsolete, or in need of repair. Measure how long the passage takes. Use that data to determine the latest safe ship date for the real thing.

Export licensing

Exporting high-tech items can be just as tricky as sending them through customs at their destination. The laws of the country where the technology is developed might regulate what kinds of devices can be exported, on the basis of their destinations. These regulations might affect more than mere hardware. Do not assume that hardcopy documents are safe.

Begin the Exporting high-tech items can be
just as tricky as sending them
through customs at their destinationexport license approval process as early as possible, and actually test it, again with a dummy replica. This test can also expose errors and confusion in accompanying export documentation.

Local construction permits

Some projects involve construction or modification of facilities. Even digging a trench for an Internet connection can require a permit from local authorities.

Risk managers who identify permit-related delay risks early in the planning process are more likely to have success by enlisting the assistance of senior managers and their legal teams in advance. Beware though: if the response of senior managers is "Let us know when you encounter a problem," their assistance might come too late. If they do respond that way, apply for the permits immediately to expose the delay as soon as possible.

Examine your project plans to determine whether government suppliers are lurking in your supply chain. Apply techniques like those above to limit the risk of government-induced delay.   First issue in this series   Top    Next Issue

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