How importers can protect themselves from costly manufacturing delays

Rule Number One of calculating lead time is — Be realistic, not optimistic.

This article was originally published on www.sourcingallies.com

Preventable and non-preventable delays

Preventable delays include incorrect HS code labels on shipments, which can lead to products being pulled aside for customs inspections. In China, one preventable delay is Chinese New Year festivities, during which factories across the country shut for at least a week as workers head to their hometowns to celebrate the festival. Experienced importers usually do not plan any major orders around this lunar new year celebration, which usually falls in February

How to protect yourself from delays

It is natural for manufacturers who want your business to promise to deliver your goods within your preferred lead time. But you will protect yourself from costly delays in delivery if you make your desired lead time clear to your supplier from the very beginning, and also incorporate it into your manufacturing contract. This contract, which will legally bind your supplier to deliver the goods to you by the mutually agreed upon time frame, could also have a clause that defines penalties for delayed or late shipments. When suppliers know that lead time will be incorporated into contracts, they are more likely to quote a realistic lead time to you, which will help you plan your inventory better.

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