Purchasing procedure - Seeking suggestions - How to include a 'loop' for follow-up

[little__cee]

Purchasing procedure help

I would like to revise our purchasing procedure to include a "loop" for follow-up. Does anyone's purchasing procedure have wording to cover the following fictional situation:

Purchasing places an order on November 3. Told material will arrive November 12. Salesman quotes delivery to customer of November 14. On November 17 customer calls and yells at salesperson. Salesperson calls purchasing and asks where is material. Purchasing calls vendor and finds out that material hasn't even shipped yet due to some problem...

I would like to create language stating that purchasing will check due dates on overdue material ASAP but I don't want to reinvent the wheel. Our Contract Review procedure has lots of follow up components regarding if we get the quote, if we don't get the quote, etc. Purchasing procedure reads "I place order." Okay, a little more complex than that but you get the picture, I hope.

I hope someone can share some examples of wording to help me out with this. Thank you all and have a good holiday.

 

[RoxaneB]

Would the checking of expected due dates not be on your Approved Vendor List requirements? For ours, we have some set criteria that must be met in order to remain on our AVL...delivery date conformance is one of them.

Does your Purchasing Department not already look at delivery dates and call up Vendors when product is late? Do you issue Customer Complaints to your Vendors when they do not meet *your* requirements?

At least this way, should a Customer of yours complain you can say that you are taking actions to address the situation.

 

[Wes Bucey]

I would like to revise our purchasing procedure to include a "loop" for follow-up. Does anyone's purchasing procedure have wording to cover the following fictional situation:
[etc.]
I would like to create language stating that purchasing will check due dates on overdue material ASAP but I don't want to reinvent the wheel.
. . .
I hope someone can share some examples of wording to help me out with this. Thank you all and have a good holiday.

I've seen situations very similar to these for at least 30 years and I'm sure those with more and longer experience will echo me.

Seems to me several parts of business procedures come into play here:
Purchasing/Contract Review (prevention versus detection):

Purchasing department needs contract language that extracts

• shipping notice from supplier that product ships on scheduled date (email or fax)
• warning notice from supplier if product will not or does not SHIP on scheduled date (note this is shipping date, not date due at buyer's dock), plus explanation and recovery plan

Purchasing department also needs tickler system to alert all involved parties if shipping notice NOT received on schedule. (as simple as calendar entry)

Sales department needs common sense -

1. If salesman is going to promise product to his customer, subject to receiving product from the salesman's supplier, that's part of the info he must give to his customer.
2. Once a promise date is given by salesman, salesman has obligation to ensure product is en route as scheduled and, if not, to inform his customer in advance of the circumstances.
3. At the very least the tongue lashing by the ultimate customer will be tempered by the fact he thought salesman was making an effort to stay on top of the shipment.

So - wording samples:
Contract: (This could be a label stuck to front of purchase order)
[Clause #] Due date. Product is due on buyer's dock no sooner than three days before [date] and not later than [date]. To ensure this, Supplier will send notice of shipment, detailing carrier, number of packages and weight (other details) to Buyer via FAX/email at [number]. If Supplier becomes aware shipment will be delayed for any reason, Supplier shall notify Buyer immediately by phone/FAX/email with the reason and the best recovery date. [other clauses may detail penalties for late delivery and buyer's options to acquire substitute material]

Sales department (training or work instruction):
Stay alert to promised delivery dates for customer. There are several factors to check:

1. Is there sufficient uncommitted product in inventory to cover promised shipment?
2. If shipment is dependent on delivery from a third party, is there a way to confirm shipment is on schedule? (If yes, advise customer of contingency)
3. Is customer alerted in advance of his delivery date if there is a SNAFU in the supply chain? (Means salesman has to stay in loop until product is received at customer.)

 

[Cari Spears]

I would like to revise our purchasing procedure to include a "loop" for follow-up...
...I would like to create language stating that purchasing will check due dates on overdue material ASAP but I don't want to reinvent the wheel...

Hi cee -

I see in your profile that you're 80 people. How complex is your purchasing? How many people in your purchasing department, and how are your orders currently monitored? Electronic or handwritten logs?

 

[Mike S.]

Once a promise date is given by salesman, salesman has obligation to ensure product is en route as scheduled and, if not, to inform his customer in advance of the circumstances.

Wes,

I agree with many of your points, but not this one. IMO, once an order is taken, Sales hands it off to the mfg. folks who should take responsibility for it. Sales should not have to babysit every order and ask "did it ship on time". It's Mfg's. job (obligation, to use your word) to make it ship on time or else raise a flag if something goes wrong. Now, if Mfg. has a SNAFU I have no problem with them notifying Sales and letting Sales notify the customer and handle the customer contact. But if I were in Sales I would not want the job of having to ask on every due date if the order shipped on time. Hopefully, this (late shipments) is an exception, not the rule, and I want to be notified if there is a problem, but otherwise I need to be creating more sales, not checking-up on Mfg. JMO. :truce:

 

[Wes Bucey]

Wes,

I agree with many of your points, but not this one. IMO, once an order is taken, Sales hands it off to the mfg. folks who should take responsibility for it. Sales should not have to babysit every order and ask "did it ship on time". It's Mfg's. job (obligation, to use your word) to make it ship on time or else raise a flag if something goes wrong. Now, if Mfg. has a SNAFU I have no problem with them notifying Sales and letting Sales notify the customer and handle the customer contact. But if I were in Sales I would not want the job of having to ask on every due date if the order shipped on time. Hopefully, this (late shipments) is an exception, not the rule, and I want to be notified if there is a problem, but otherwise I need to be creating more sales, not checking-up on Mfg. JMO. :truce:

Upon rereading my own post, I see where I wasn't clear about what I expect from the salesman. Thanks for being alert to ambiguouous and "muddy" posts.

I meant to make clear that once the salesman had injected himself into the normal "order-manufacture-deliver" sequence by making a secondary communication with the customer and his own purchasing department to make a promise [prediction?] about delivery date, he has incurred a secondary obligation to his customer to stay in the loop until delivery is complete.

I certainly did NOT mean to imply it was the normal course of business for the salesman to usurp the organization's basic system for fulfilling orders.

I can envision lots of scenarios where the salesman wants to be certain the customer gets his goods when promised.

I can't envision ANY legitimate scenarios where the salesman abandons his interest in seeing the sale completed. In all the organizations I've worked, the salesman's compensation depended on completed orders. In some of the organizations, the salesman even shared the risk of customer nonpayment with the organization. Canceled orders (even due to the organization's nonperformance) were always charged back to the salesman against his quota. Even more reason to see the sale through to delivery.

 

[Mike S.]

It is probably just me being dense, but I'm still not sure of your position, Wes. If I am the Salesperson (perish the thought ) in your company, and I confirmed an order with a customer, including the ship date (let's say it was 12-20-03), and gave Mfg. all the info. they needed to do the job, do you expect me to contact Mfg. on 12-19 or 12-20 to verify that the product will ship/shipped on-time, and do this for every order?

In reality, it is not just the "salesman's compensation [that depends] on completed orders", but rather everyone's compensation does. Yeah, the Salesguy might be on commission, but if we don't get customer $ in the door, the machinist or janitor won't get paid, either.

In general, I am against routinely having one "department" or function have to check-up on another function to make sure they did their job correctly. Mfg. should not have to continually babysit Sales to make sure Sales gives them the complete information they need to manufacture the product and satisfy the customer, and Sales should not have to ask Mfg. is they got the product to the customer on time, Mfg. should consider it their responsibility to notify Sales in the (hopefully rare) situations when something goes wrong and delivery will be late. JMO of course.

 

[little__cee]

Answering your questions

Thanks for the good input!

Roxane, we do have a Supplier Nonconformance Log. Basically this means that when a supplier "screws up" enough and gets enough instances recorded on the log they go on a probationary or inactive status. This is in accordance with our written procedure. So when looking at the big picture, we're tracking what we should and getting it done according to plan. However, this does not help the salesman when we tell him that every time a supplier is late we record it on a written log. And we do issue complaints, but the salesman is still out of luck on his order.

Cari:
Our purchasing department consists of the department head and four workers (3 full-time and one part-time, I think). I am not sure how complex it is but I do sit in close proximity to the department and hear the daily activity...I cannot imagine that no one has time to expedite orders.

It has been brought to my attention that there have been several instances where purchasing has received advance notice that a delivery will be late so they've adjusted our arrival date electronically without informing sales. That needs immediate correction.

Thank you all again for the help.

 

[Wes Bucey]

It is probably just me being dense, but I'm still not sure of your position, Wes. If I am the Salesperson (perish the thought ) in your company, and I confirmed an order with a customer, including the ship date (let's say it was 12-20-03), and gave Mfg. all the info. they needed to do the job, do you expect me to contact Mfg. on 12-19 or 12-20 to verify that the product will ship/shipped on-time, and do this for every order?

In reality, it is not just the "salesman's compensation [that depends] on completed orders", but rather everyone's compensation does. Yeah, the Salesguy might be on commission, but if we don't get customer $ in the door, the machinist or janitor won't get paid, either.

In general, I am against routinely having one "department" or function have to check-up on another function to make sure they did their job correctly. Mfg. should not have to continually babysit Sales to make sure Sales gives them the complete information they need to manufacture the product and satisfy the customer, and Sales should not have to ask Mfg. is they got the product to the customer on time, Mfg. should consider it their responsibility to notify Sales in the (hopefully rare) situations when something goes wrong and delivery will be late. JMO of course.

OK. We're thinking apples and oranges, Mike. normal "order-manufacture-deliver" sequence means exactly what you describe - salesman generates order and balance of organization fulfills the order according to the time and delivery date promised in the order. That same organization SHOULD have mechanism in place in its supply chain to identify "glitches" and alert affected parties (including the salesman so he can soothe any wounded feelings at his customer and salvage an order which might be otherwise canceled.)

When organizations do NOT have a smooth and efficient supply chain in place, their salesmen often intercede on behalf of customers to ensure timely delivery. MY THESIS is that once the salesman has interceded in a [sometimes] dysfunctional supply chain, he owes it to himself and customer to stay in the loop to ensure the customer is served.

The whole issue is whether the organization has a smooth and efficient supply chain which makes contracts with suppliers that cover contingencies like late deliveries. Sadly, there are more organizations with dysfunctional supply chains than organizations with perfectly functioning supply chains.

I focus on the salesman because he has the most direct contact with the customer and, personalities being what they are, customers tend to focus their wrath on a human target rather than an impersonal organization, especially a dysfunctional organization that doesn't tell the customer a shipment is delayed and full details of "best efforts to recover."

So, in our little scenario, the salesman's supply chain intervention is a stopgap measure until the organization cleans up its act. Would I want to continue being a salesman for an organization that continually sabotaged my sales with fouled up deliveries? Probably not. But I could probably live with 2 or 3 fires a year when the normal system has extraordinary foulups that required my intervention. I'd be a fool to stand there and say, "That's not my job!"

A good organization pulls together to resolve a glitch. It does NOT stand around pointing fingers of blame.

 

[Mike S.]

OK. When organizations do NOT have a smooth and efficient supply chain in place, their salesmen often intercede on behalf of customers to ensure timely delivery. MY THESIS is that once the salesman has interceded in a [sometimes] dysfunctional supply chain, he owes it to himself and customer to stay in the loop to ensure the customer is served.

A good organization pulls together to resolve a glitch. It does NOT stand around pointing fingers of blame.

Okay, I understand your point better now.

But if there are lots of cases where the Salesman has to get involved as you mention, they are probably dysfunctional enough to also be the type of org. where people indeed say "that's not my job" and point fingers.