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Minor delays do occur in the procurement process and we should have enough cushion to absorb such delays. However, if such delays have a high frequency, we must take cognizance and react promptly. This is of course true for big delays which have the potential to harm a project timeline.
Now what should be done?
I believe that there must be enough deterrent built into the contract which should also force the supplier to move pro-actively to avoid or minimize the delays. As a buyer, we must keep close watch over the timeline and proceed for procurement of the goods and services from alternate sources at suppliers risk and cost, so as to meet the deadlines. All such conditions must be a part of the contract
Agreed with expert reply ------------------
Thanks to invite.
At first I should say, it's a negligence of supply chain department. Procurement department must ensure the capabilities of the supplier through KPI's and market research before placing any order. If it happened unexpectedly first time by a competent supplier then you have to evaluate the GENUINE reason.
Discuss the issues with the material requestor and stake holders to know with what extent they can absorb delay and accommodate the situation.
In parallel review and discuss the contract terms with the supplier, propose possibilities how to eliminate or minimize the delay, bring into writing if there is any breach of contract to build pressure and demand delay penalties, if applied. Ask the supplier to absorb this delayed time by switching to another faster mode of shipment, totally or partially at no additional cost to the buyer.
Generally, there should not be any panic in minor delays as we should adapt a practice to keep cushion of extra safety time and extra buffer stock for critical inventories. We should place an order with delivery time much earlier than the actual (Minimum) required time and for this we have to work from the moment we raise a request for quotation.
Usually there is a contract that governs this type of action and you have to work as per the contract. Sometimes you are occupied by the need to deal with this supplier therefore you will need to evaluate the situation and try to find a solution with the supplier knowing the reasons to solve this issue.
Based on the contract's/Purchase Order's terms and conditions, one should apply liquidated damages for late deliveries.
The contract should stipulate penalties in the case of delays to act as a deterent for supplier's neglegence. At the same time, there should be supplier's evaluation form to be filled out after every contract execution. The supplier should be aware of your evaluation of his performance so that he keep his performance up.
