Verifying Vendor Deliveries before due date

[gcasto]

There has been much discussion in my company about Vendor On Time Delivery (OTD) as a metric for Procurement as a measurement of good relationship / encouraging good performance with vendors.

One aspect of this that has been proposed is that a good Procurement organization will call vendors before deliveries are due, maybe a week before, to verify that orders will be delivered as expected.

I can understand this practice if you have a problem vendor or a critical delivery due, but if your Purchasing organization receives a quote from the vendor, sends a PO based on the quote and then gets verification from the vendor that they have received the PO, this seems like a little bit of overprocessing and alot of holding the vendors hand.

The feedback I've gotten from vendors is that this extra level of checking could negatively impact their processing time if everyone were to double-verify delivery dates.

An instructor from a recent ISM procurement class indicated that this was only something you would do if you had a problem vendor.

Does anyone have thoughts on this or any kind of "best practice" guidance?

[000000197363]

One collegue says that "all our vendors are problem vendors." That is the extreme edge of supplier relationship building. I agree with you and the ISM instructor that this practice should be for critical or problem deliveries only. I work for an OEM that installs our equipment and most of our purchasing is delivered to a job site. The Project Manager or Site Supervisor are certain to let us know of any delivery problems and often wish to confirm the delivery. We also control the freight so there is a warning if the supplier has not requested shipping instructions a few days prior to delivery.
Calling prior to delivery to verify on-time status is a "productive time waster." It looks good to a supervisor or manager but takes an inordinate amount of time from the Buyer or Purchasing Agent. If you still have expeditors this is their function.

[mereli]

My company has a "clearinghouse" function that does this type of follow up with vendors automatically. You (the buyer) send PO's to our website, we route them to the vendor (email). The vendor clicks on a link, acknowledges the order, and notes any exceptions. When the vendor is ready to ship, he logs into the website, updates quantities and ship dates, and it all goes back to you.

Then, instead of phone and email follow ups, alerts are done automatically by the system. The vendor gets an alert if he has not acknowledged an order, or if his shipment will arrive late, or if he has not entered a ship notice. The buyer gets alerted if the supplier has not responded in time, etc.

You might want to consider something like this: www.SupplyChainConnect.com

Michael