Vendors are delaying deliveries, impacting working capital. How can you ensure efficiency is maintained?

Timely placement of Purchase orders and maintaining inventory levels will help in these situations. The delay in supplies will not going to hamper the production process if we will look into these aspects accurately.

Carefully analyze expected volumes needed over the medium to long term and work with suppliers to cover those delivery dates to provide the most lead time possible to allow your key suppliers to plan. This keeps you from overstocking on single bulk orders and allows more frequent but more manageable orders

Preferably your supply chain is dual sourced to mitigate these type of constraints… However, when situations arise - Adjust planned delivery times accordingly which will trigger requisitions sooner. If the issue persists - resource.

Some factors that the vendor will be required to identify are the reasons for its delivery variabilities, ie shipping schedule dates, production schedules, transport resources, etc, so that it can be required to implement issue-based resolution (like buffer inventory or time adjustments at the backend) of its delivery performance.

-Just-in-Time (JIT): Implement a JIT inventory system to reduce holding costs and minimize waste while ensuring critical stock levels are maintained. -Inventory Analysis: Regularly analyze inventory levels to identify slow-moving or obsolete items and adjust orders accordingly. -Safety Stock: Establish safety stock levels to buffer against unexpected delays without tying up excessive working capital.

I cannot say enough about the importance of building relationships with key vendors that support operations. When the chips are down and things go south it’s these same vendors that can sometimes help you survive disruptions.

-Regular Communication: Maintain regular and open communication with vendors to stay informed about their situations and any potential delays. -Collaborative Planning: Work closely with vendors to forecast demand and plan deliveries, ensuring alignment and mitigating risks of delays. -Incentives: Offer incentives for timely deliveries, such as early payment discounts or long-term contracts, to encourage vendors to prioritize your orders.

En Flow Investing Capital, mantenía reuniones regulares con nuestros proveedores clave para discutir cualquier problema y encontrar soluciones juntos. Esta colaboración estrecha nos permitió negociar entregas parciales y priorizar envíos críticos, minimizando el impacto en nuestras operaciones.

-Multiple Vendors: Source from multiple vendors to reduce dependency on a single supplier and spread the risk of delays. -Local Suppliers: Include local suppliers in your network to shorten lead times and reduce the risk of international shipping delays. -Backup Suppliers: Establish relationships with backup suppliers who can step in if primary vendors fail to deliver on time.

En una constructora donde trabajé, diversificamos nuestros proveedores de materiales críticos. Esta estrategia no solo mejoró nuestra resiliencia ante retrasos, sino que también nos permitió negociar mejores condiciones de pago y precios más competitivos.

-Supply Chain Financing: Utilize supply chain financing options to improve cash flow and ensure timely payments to suppliers, which can incentivize them to expedite deliveries. -Credit Terms: Negotiate better credit terms with suppliers to extend payment periods without affecting cash flow negatively. -Factoring: Consider invoice factoring to get immediate cash for outstanding receivables, which can be used to manage working capital more effectively.

-Demand Forecasting: Use advanced forecasting tools to predict demand more accurately and adjust inventory orders to align with expected sales. -Historical Data: Analyze historical sales data to identify trends and patterns that can help in making more accurate forecasts. -Scenario Planning: Conduct scenario planning to prepare for various outcomes and develop contingency plans for potential disruptions in the supply chain.