Accepting orders without material on hand

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Indiana_Parrothead

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In a resent thread in the "Cheers & Jeers" there was a lot of debate about if it is acceptable to take orders without having all the needed materials on hand and giving a reasonable delivery date to get the materials in and make the product.

I have done this in the past but not very often. When working with a supplier that you use often you tend to get a good idea of how they will respond to your order and what you can expect. Some suppliers you know that if the item you need is in stock and you order before a certain time of day that the order will be shipped that day and take X amount of days to get to you based on how far it has to travel. Not taking delivery issues into account.

In the company that I work for, and I am sure the vast majority of manufacturing plants out there take orders all the time, for product that they don't have the material in stock to produce. For any manufacturing company that is still in business, gone are the days of carrying 30 days of materials and safety stocks. It does not make good business sense to carry millions in inventory. All of the ordering and delivery times are built into the ERP sysem and you know what your available to promise date is as soon as an order is place. We are down to keeping most materials in stock for less than a week, and in the auto industry they are down to hours with their suppliers.

I personally have no problems taking an order for items that I know my supplier of choice has in stock and it can be delivered in X number of days.

What are others opinions?

Mike
 
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I just did this... but I also let the customer know the situation. I called the vendor explained the situation and they went above and beyond by using a shipping method they don't normally offer (overnight) and rushed the order through for me too. I started to write a cheer, but I wasn't sure the vendor would want me to if it could lead to others abuse it. Yes they are an active IAP vendor and I believe the only source for the blanks the customer wanted.

I find honesty and openness works well with customers. If you let them know ahead of time, most will work with you. Then if something does go wrong, it isn't like you couldn't deliver as promised.... Under Promise, Over deliver.

When things do go wrong (they do sometimes), fix it as best as you can.
 
If you let the people know ahead of time I dont see a problem..

BUT.. Heres my problem..

About 2 weeks ago I broke a part I use for turning. I ordered one online that showed in stock. Waited a week.. no response to even the paypal or anything. Contacted to make sure they recieved the order. (this was on a sat) and they emailed back saying they are waiting on the items and expect to have them monday. NOW its friday and still no response..
 
I've only sold a few pens so far, and have taken orders for kits that I don't have.

However, in my day job, I'm a programmer for a medical supply company that has a custom procedure tray division. I've spent years maintaining and upgrading our back-end ERP system, so I'm extremely familiar with vendor lead times, partial shipments and shipping errors.

Having a rough idea of my stock levels (kits and blanks) I can usually come up with a guestimate on when I can have a pen finished. If I know the order is for something where I have to order product, I'll usually already have an idea on how that supplier is on shipping (and the costs involved). In any case, communication with my customer is key to prevent surprises.

I haven't had an order yet for a "rush job" but I'd probably try to limit it to what I have on hand, or can get within a few days if they are insistent.
 
It's not a problem if you give the customer a realistic estimate. You have to assume a reasonable worst case. The vendor will be backed up and ship out a day later than you expect. The carrier will hit a snowstorm and deliver a day late. You will eat bad sushi and spend a day in the bathroom instead of the shop. No one will get upset if you beat the estimate.
 
I do it all the time, but I also give myself plenty of leeway when the product will be ready. Usually at least an extra week. Many places say 4-6 weeks for delivery. That is not unreasonable for most people ordering a custom item.
 
I do it all the time, but most of what I sell can either be sourced from several vendors or created on the fly by either myself or a trusted seller (Jonathon, Lyle, Eugene, etc...). I'm also up front with my customers when I don't have something in stock that there may be a delay in obtaining it.

I also have no problem telling someone if I can't meet their deadline because I'd rather them be happy with another vendor who can fill the request than upset with me for misleading them and missing a deadline. I've actually had customers come back to me later who I turned to someone else to meet a deadline.
 
I'm in the specialty chemical business. Our total business is based around the order of chemical that is not on site. Several times, I have had the issue of no raw materials available. What my customer doesn't know won't hurt them so long as they do not run out of chemical! It's a different scenario, but it is common business practice to sell what you do not have in a specialty market.
 
In the other thread (cheers and jeers) the discussion was about time sensitive orders. I interpreted time sensitive to be where the customer set the delivery date, not where the pen maker set the delivery time allowing ample time to gather needed materials. There is a difference. Just saying.
Do a good turn daily!
Don
 
In the twenty-first century, most businesses operate on a 'just-in-time' philosophy. It simply doesn't make sense to have a lot of money tied up in inventory, so the practice is to accept orders for finished product, place orders for raw material hoping that vendors can supply on time, while having contingency plans to address the situations where a critical supplier is also backordered. Contingency plans include lists of alternative vendors and expedited shipping arrangements. Yes, its something of a gamble, but the fact is that most businesses are able to deliver their finished products within reasonable times in spite of the drama that takes place behind the scenes. Of course, the stress level is a bit higher, but that's also part of modern life.
 
Don, I agree with what you are saying that in the other thread he did state that it was a time sensitive order, but he may or may not left enough time to get the order done. I am not here to re-debate that thread.

What I noticed was that about half the people that responded in that thread stated that they never take any orders for materials they don't have on hand and chastised the person for doing so. I just wanted to get a reading on how many people do or don't.

Mike
 
Almost all of my orders are for things I don't have in stock. I show them the catalog (with my prices added over actual costs) and go from there. But I always leave myself plenty of time (unless I procrastinate too much then I end up with a weekend plan like this coming weekend where I will have to be in my shop a minimum of 17 hours to complete everything promised before Christmas).
 
monophoto said:
In the twenty-first century, most businesses operate on a 'just-in-time' philosophy. ...
Click to expand...

That in standard manufacturing, and those companies know that next month they'll likely get x order of widgets. They have x number of products with y variations. They use trends and forecasts, plan promotions, and data mine to make those calls. They standardize parts and have multiple sources of the same part to prevent problems (and yet still have them - BMW ERP switch caused 14,000 backorders for thermostats for MINI Coopers not long ago - prices tripled or more IF anyone could get them. One seller was getting $700 for a $120 part).

We can't. We don't fit the JIT mold. Our products are usually one-offs, and we never know when someone may want something in particular. At noon at a show, I still may not know how the rest of the day will go. Plus we rely on suppliers that most of which wouldn't fit in to JIT stategy themselves. So if we count on a supplier to be able to produce on time EVERY time, you can't run JIT. And that automatically rules out offering anything that's only available from a single seller.

If you were really running JIT, you would go to a show with only the exact inventory that will sell. All of your online listings would be "made to order" and no inventory would be held over. We're simply not in that type of business here.
 
Another thing to think about even if you have everything in stock. What happens if your CA is bad, tool breaks, or anything like that???
 
All I can add is....we don't do it here.

We have it in stock and that is what we have to sell. If someone were to want a 'custom color combo', then that is a completely different situation.




Scott (I don't like waiting, why would I do it to someone else) B
 
Rob, if you look at it from the point of view that we do not build relationships with our vendors to let them know that I will be ordering 10 Aero, 25 Jr's and 50 Zen's next month set them aside for me then you are correct we do not run in a JIT enviroment. But if you look at the root of what JIT is and that is you are producing something for an order and you know how long it will take to make it and how long it will take to get materials in, then you are running in a JIT world.

If you take an order and tell the customer you can have it in two weeks, you know that the item you need is in stock and it will take a week to get to you. That leaves you a week to make it. You know that you can make it in 2 hours, so it gets put in the queue behind your regular job, taking out the trash, sleeping etc. But you get the part you were waiting on, and manage to work it into everything else you have to do and get it made and delivered. Once you gave the customer a delivery date with out having the material that you needed in your hand that becomes just in time. We may work in a time period of weeks and the auto industry works in time buckets of hours but it is still the same thing.

Mike
 
I just took an order at a show this past weekend for a chrome seam ripper in viola madreperlato. I saw Exotics had the blank in stock, and could check on my phone that two different suppliers has the kits. I told the customer it would be about two weeks, but I was dependent on getting the items In on time during the busiest shipping season of the year. She said 2-3 weeks was fine and said it wasn't time sensitive. If she had needed it in under two weeks, I would not have taken the order because I wasn't sure I could get it all to me in time. On the plus side, there is a woodcraft 20 miles from me and they're good for often having what I need (or close to it) in a pinch.
 
In our pen business we take along a very large amount of inventory to every show, but we also end up taking a few custom orders at every show as well. Sometimes we have the components at home to make the custom order, sometimes not. Not having the components ready to use does not stop us from taking an order, they can be found somewhere and I will sometimes order them from 2 or 3 different places, hoping one of them gets to me in time, I can always use the extra components.

In the job I get paid to do during the week we sell air every day. We do custom programming, build sites, develop analytics, and conduct research. Nothing really exists until it is sold, but if I can describe it and sell it, I'm confident we can develop it.
 
I don't do a lot of time critical stuff...med school sucks for fun time! But if someone needs a Sierra and I'm out (lord forbid!) I know I can have kits in less than a week then a day to make unless it's something weird, then ship. So a 12 day time frame isn't out of the question for my situation.
Ed mentioned the other consumables which is a huge thought!! We have a couple places in town, 3 I think, that carry glue, brass tubing, even some kits! Luck prevails in my situation...but a great thing to keep in your fridge or the back or your melon.
 
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Do it all the time. While I have hundreds of kits and blanks in inventory available, should someone request something I would need to order I explain to them my expectations as to when I expect to be able to fulfill their order. If i can't sell them something I do have and the wait doesn't work for them then I politely say sorry and ask that they consider me again at later date.
 
I seer nothing wrong with taking an order for something you do not have the parts to build on hand. It is called "Just in time stocking". Most company's do it these days.

Having said that, by taking such an order, one assumes the responsibility of meeting the agreed upon delivery date and realizes that may include eating overnight shipment costs both from your supplier and to get it to the customer.

Hypothetical, if you were short parts, would you consider posting on this site for a bailout. Extra credit, if that happened, would you be willing to help the poster out?
 
Customer: "Can you make me one of those?"
Me: "Yes I can, however, I am currently out of stock on the materials I need. I would be happy to call my vendor and find out if they have it in stock and will gladly call you back and let you know the status of when I can get them once I have that information. Does that work for you?"
Customer: "Yes"

KEY: I never commit based on past track records, I commit on current situation. Things change. Maybe the vendor is also out of stock.
...
Me: "I called my vendor and can have the materials in ___ days. It will then take me ___ days to make it and ___ days to get it shipped to you. Does that work?"
Customer: "Yes"
Me: "Ok, if there are any problems I will keep you posted"
Customer: "Thank you"
...
KEY: I always build in some extra time for problems which can be many (shipping, family, weather, etc. etc. etc. )

Never missed a deadline even with a few shipping snafu's.
Happy me, Happy customer

J.I.T. = keeps inventory low
J.I.C. = just in case something goes wrong, plan for it
 
We discussing two different situations here. If I get a request for a pen made from materials I don't have on hand or if I have to cast I too will take the order ON MY TIME TERMS. If the customer wants a pen made with materials I do not have on hand or I must cast and they want the pen ON THEIR TIME TERMS then I politely refuse and tell them why. I offer to make the pen on my time terms or send them to someone I think can meet their time window. If a customer needs a pen in a day or two then I will only sell them one I have made or sell them one I have materials on hand to make.
Do a good turn daily!
'Don
 
edicehouse said:
Another thing to think about even if you have everything in stock. What happens if your CA is bad, tool breaks, or anything like that???
Click to expand...

Had that happen on my last big order. 26 Aero pens. My lathe crapped out on the 2nd pen! I didn't have time to get parts in and LEARN how to fix it myself. The only local place that had a repair shop quoted me a month for the fix. So I ended up having to spend my orders deposit on a new lathe. In the end it all worked out but I was sweating for a while.

As for the question in the OP. I would take the order if I knew I could source the materials from multiple vendors. If it were for something like Emperors or a hard to source kit I would definitely give a quote but state that I had to verify that I could find the materials first.
 
mywoodshopca said:
If you let the people know ahead of time I dont see a problem..

BUT.. Heres my problem..

About 2 weeks ago I broke a part I use for turning. I ordered one online that showed in stock. Waited a week.. no response to even the paypal or anything. Contacted to make sure they recieved the order. (this was on a sat) and they emailed back saying they are waiting on the items and expect to have them monday. NOW its friday and still no response..
Click to expand...

So you took an order without having the product materials on-hand, then had to place an order to a company that took your order but didn't have the product materials on-hand. It's a vicious cycle!

I'm kidding. I do this, the key (for me, anyway) is to give yourself enough of lead time to get the materials. I typically tell customers expect 3-4 weeks during slower periods, 4-6 during busy periods (ramping up to the Holidays). There's only so much $$ you can lock up in materials that are waiting to be used.
 
Adillo303 said:
Hypothetical, if you were short parts, would you consider posting on this site for a bailout. Extra credit, if that happened, would you be willing to help the poster out?
Click to expand...

Nothing hypothetical about that . If you watch the forum closely , you will probably see one of those posts every month or two , usually with an urgent need within two or three days . I generally regard them as self inflicted wounds .
 
1080Wayne said:
Adillo303 said:
Hypothetical, if you were short parts, would you consider posting on this site for a bailout. Extra credit, if that happened, would you be willing to help the poster out?
Click to expand...

Nothing hypothetical about that . If you watch the forum closely , you will probably see one of those posts every month or two , usually with an urgent need within two or three days . I generally regard them as self inflicted wounds .
Click to expand...

Interesting. As to the last part of that question, would you help.

Personally, I help anyone I can. I believe that someday, I may be in a bad bind and I hope that someone will throw me a rope. I also believe it works, it has happened for me.

Reduce this to its simplest terms, is the how one got in the soup really important? There are more ways to get there than we can count and not all of them are foreseeable.

Be there for those in need and hope and pray it comes back when you need it.

Ever been driving and gotten lost? Ever do something dumb to find your way or go back to that street you missed. Do you really believe that person honking, cursing our otherwise expressing their anger at you never was in the same situation.
 
1080Wayne said:
Adillo303 said:
Hypothetical, if you were short parts, would you consider posting on this site for a bailout. Extra credit, if that happened, would you be willing to help the poster out?
Click to expand...

Nothing hypothetical about that . If you watch the forum closely , you will probably see one of those posts every month or two , usually with an urgent need within two or three days . I generally regard them as self inflicted wounds .
Click to expand...
I think that one of the greatest things about this forum, other than all of the knowledge is the people that are willing to help each other out. There are people here that post urgent requests for items, pen kits, parts blanks etc. Not every tight spot a person is in is self inflicted, most the time we don't know the reason. But does it really matter, if a person needs something and I got it I am going to help them out. I have done this several times and actually just did it this week for someone needing some Bois de Rose. I haven't needed to post for something I urgently need, but if I did I hope and believe someone would help me.

If I seen a pattern of someone doing this all the time I would have second thoughts of helping out, but I haven't seen requests being abused on here.

Mike
 
Adillo303 said:
Hypothetical, if you were short parts, would you consider posting on this site for a bailout. Extra credit, if that happened, would you be willing to help the poster out?
Click to expand...
Nothing hypothetical about this. I've helped out members short items numerous times and always will if I'm able.
I found myself in this situation a few weeks ago when I needed a Viet Nam service ribbon blank. When I had check the Rockler web site before my show, they were in stock. When I needed the blank a few days later, the site was out and my local store had all the service ribbon blanks in stock except the one I needed. I checked the sites of the two places I knew of that make the lasered blanks but neither had them listed on their site so I posted here asking if anyone knew who made the blanks. Within minutes someone posted who made the blank and also said they had an extra and offered it to me for their cost. Just can't beat the helpfulness that can be had on this site.
 
Just in Time

What Just in Time does for manufacturers, is simply move their inventory to the vendor providing the part, component or whatever. It does not mean the manufacturer can call that vendor anytime of day or night and demand immediate delivery.

Nor does it mean that someone can call that vendor at 8am and get delivery of 10000 widgets before lunch.

If you are placing an order for manufactured goods from the factory, you will need to schedule well in advance, particularily if you are dealing in a job shop environment such as Pen Component Set Vendors deal with.

When you are taking an order for which you do not have components is stock, that is not called Just in Time it's called "I'm feeling lucky." Granted unless you commit to a very specific schedule or are using some specific, know to be hard to get, components you'll probably be alright if you allow enough time to order and get delivery. I just took an order where I didn't have everything on hand myself but told the customer that I would let him know within a day or if I couldn't get exactly what he wanted.
 
Smutty, I really would not call it "I'm feeling lucky". While I agree with everything you said, as one works a particular business for a while, once gets to know their various suppliers and what they will and won't do. Good businesses practice includes multiple suppliers for all materials possible, knowledge of seasonal delays and constant research for alternate suppliers. Sometimes it comes down to looking money with overnight orders, but, meeting a deadline vs talking to the customer, which can also work. Most people are reasonable if you give them the sense that you are keeping them in t he loop.
 
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Short answer:
Yes.
Long answer:
I take orders for items I do not presently have on hand, and will continue to do so. I think it is good business to show the client that you are willing to go the extra mile (such as incurring costs you wouldn't otherwise). I mainly sell calls, a few pens have gone here and there, the key for me is full disclosure. My client is always informed as to what, if anything, I do not have and will need to acquire. I never accept payment on an order until the product in question has been seen and APPROVED by the client... if they decide they'd prefer not to purchase after I've put forth the effort, so be it. I think that's a risk I'll always be willing to take. When you are providing goods or services your name is only as good as the last job you did. I believe every custom work you create is a chance to prove your worth to yourself, the client, and everyone they've ever met (thanks to social media).
 
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