On-Time Delivery (Late vs. Delays)

[QC-Mike]

To begin, I am an ISO purist. I am a certified ISO 9001:2015 auditor with years of implementation experience. With that being said there is an internal debate within my organization regarding what is considered a late delivery. My company uses ISO 9001 as a reference for areas we find valuable but are not complaint and top management has decided to pick and choose which ISO practices to implement.

When a Purchase Order is received the customer has applied a 10-day lead time which is a part of our standard lead time agreement with that customer. Our customer service department has stated that this lead time is "typically" achievable, however, it can be 5 days after receiving a purchase order before we have determined if the ship date can be met. When we determine the 10-day lead time cannot be met, we email the customer informing them of the delay. Our emails do not require the customer to "accept" this modified ship, but simply informs them of the delay.

My stance is that since the customer is not clearly stating that they agree to the modified ship date that these shipments should be considered as late shipments. Our customer service team argues that the customer has the right to reject the delay therefore they are "accepting" the modified ship date. Today we received a Corrective Action Notice due to an abundance of late orders over the past month that have been associated with these "delay notifications". Is there an official stance on this subject?

 

[Miner]

We track two metrics, On-time to Want and On-time to Promise. That way you can see it from the customer's perspective as well as from your perceived capabilities. Argument avoided.

 

[Golfman25]

Lots of people do what Miner does -- track to required date, promise date, and/or any other date you want to put in there. Some companies use a +/- x days factor.

My focus is instead on delivery delays that actually cause production delays at the customer. It's really not "late" until your customer needs it and it's not there, right. You may need customer help to determine what has cause a production issue. It's kind of the 80/20 rule. Only 20% of your lates will actually affect the customer negatively.

Depending on your business, lead time can be incredibly variable -- mine is. The "simple fix" on that corrective action will be to go to a 15 day lead time and expedite orders instead of delay.

 

[Randy]

Yep, useless metric. Once you pack and put it on the truck you no longer have influence or control and neither does your customer no matter how huffy puffy the contract is. Little things like fires, tornado's, hurricanes, floods, blizzards, DOT cop stops & seizures. hijackings, accidents and driver strikes

 

[Mike S.]

Yep, useless metric. Once you pack and put it on the truck you no longer have influence or control and neither does your customer no matter how huffy puffy the contract is. Little things like fires, tornado's, hurricanes, floods, blizzards, DOT cop stops & seizures. hijackings, accidents and driver strikes

You can solve that issue by tracking to ready-to-ship date, when you have completed all ops and are ready to load it onto the customer's truck or shipper's truck.

OTD discussions can get heated. Where's my popcorn....

 

[Randy]

You can solve that issue by tracking to ready-to-ship date, when you have completed all ops and are ready to load it onto the customer's truck or shipper's truck.

Different way of saying what I did.........."We put it on the truck, and after that, who knows?" This is especially good if the customer specifies the shipper and routing. A good practice, thanks to digitation, is a time-stamped photo of loading and the installed door seal.

 

[Bev D]

The issues of things that can go wrong that are out of everyone’s control is covered by force mejuer exception clauses.
Teh OP has said that their ‘delays’ are the source of teh trouble with their Customer…The problem at hand seems to be the corrective action - *my* advice is to sit with you customer and understand why they issued the CA. Was it just a bad rating in a supplier score card or is it because there were actual production disruptions? A team from your organization should sit with the Customer and understand the real need and agree to a process going forward.

 

[QC-Mike]

Unfortunately all of our delays were capacity related. It was our largest customer with 15 orders late over the course of 2 months. The CS team’s response to the customer for these delays was “due to plant construction”. A day later we receive the Corrective Action Notice. The internal debate right now is hinging on the notifications sent to the customer that their delivery date was being pushed back, which according to our CS team, exempts these orders from being considered late which is where I would disagree. I agree with the need to communicate with this customer however I’m not sure if that would fall in line with upper managements established “culture”.

 

[Bev D]

Yeah sucks when people in charge think that you are entitled to the customer’s money.

 

[Johnnymo62]

I think you have proven that your standard lead time of 10 days is inadequate for your maximum capacity. Adjusting the lead time to something your company can meet would be easier than increasing the capacity.