Monday, August 15, 2011

Smaller Order Pitfalls

“We don’t need a large quantity and the brand needed the goods yesterday”.  Manufacturing for the ad specialty and promotional production industries, this is an often played tune.

Smaller quantity runs from China, although not advisable are many times in this industry, the nature of the beast.  At times, brands and end-users require small quantities and distributers pass these down the supply chain.  Along with the big projects and in hopes of securing larger jobs, a distributor has to deftly handle the smaller orders that their client needs.  It’s a domino effect; everyone likes to handle larger quantity orders, but since the distributor needs to please the brand, then a supplier, many times in China, needs to please the distributor. 

Small runs create big headaches.  The factories, although they take the project, they don’t care about the projects.  For a smaller run, you can implement the most fail-safe QC methods, but there is still a large room for messing it up.  

We recently battled a project, set to ship by air (urgent, urgent, urgent), that, after production was 60% correct, 40% bad.  

So ship the 60% and redo the 40%, right?  Not so simple.  The item was a set.  Not to go into too much detail, but it was a set that included the special box and inside the box were 12 pencils with different prints.  Inside of each set, some were good, some were bad.  So the bad and the good were sorely, nightmarishly intertwined.  Wasn’t so black and white as sending good and fixing the bad.

When you are sitting in an office overseas, buying directly from a factory, how does this play out?  How do you get them to fix the order? 

A standup supplier is still required to deliver, so how does the scenario play out?

Sifting:  You have to go into each set and extract the good and discard the bad.  And since the good and bad were so heavily mixed, it was a tedious process of using many individual precious time, cost, and space of getting the job done.

If you think the factory did the sifting, combing and repacking, think again.  As far as they were concerned, it wasn’t worth their effort to go through the order and they didn’t make enough money off the job to warrant the additional input.

We used our facility, our people, our time to assure 60% were ready to ship intact. 

We delivered 60% in time and told the customer to hold tight for the additional 40%. 

Customers happy, we’ve still got a mountain of work ahead of us to deliver the 40%. 

Did the factory offer anything?  They offered to reproduce the 40% bad….at our cost.  You may think they are obligated to pay for the 40%.  But the actual victory is that they were even willing to reproduce the 40%!  Just paying for the replacement goods, isn’t a motivator to the factory and they are not wild about having to book more material and spend more time on a small job they didn’t care about in the first place.

But it’s not that simple;  before re-production starts, we had to go to their area and help resource 1 of 3 vendors involved.

An item as small as a pencil is made up of 3 vendors;  the facility that does the laminate print wrap and assembly, the facility that does the actual pencil and the erasers – all come from a different source.

After the 1st order, one of the 3rd party vendors (print and assembly) decided they wanted no more part of the project, they cut their losses and jumped out of the mix.  We had to send a representative to that area and walk the material markets to find a vendor who would be willing to do such a low quantity, low cost run…and get it consistent with the first order!

We eventually completed the 40% and had them shipped, in time to make the campaign.

Ordering this directly from a factory;  you would have the whole shipment, with the 40% bad intermingled to-the-death of the project inside of the goods.  On top of that, you cover full transportation costs for a colossal headache of an order. 

The factory would have their payment and approaching the factory asking what they plan on doing about the problem would be pointless.  At that point, it’s your problem, not theirs.  You’re not going to be able to scare them by saying you aren’t going to bring back more great orders like these. 

The moral of the story in manufacturing and importing for the ad specialty industry;  you think you want to find a factory, consider what it could cost you.  A solid partner, in this industry, one who watches your back and cares just as much about your orders as you do, is a safer bet. 

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