Gantt charts used to be very effective tools with Asian suppliers.
When there are time certain deadlines for projects, why are proven planning tools ignored when it comes to Chinese sourcing? Is this a generational issue or cultural problem?
I love Gantt charts and my Chinese suppliers are always happy to see a well laid out plan for getting the order out the door. The problem is not getting suppliers to commit to a time line and process flow, that’s easy, especially if a large PO hangs in the balance. The problem is getting suppliers to respect the Gantt and meet more than just the first few project gateways. I don’t think this lack of respect is generation or cultural, I think it is more economical and dependent on the realities of the buyer-seller agreement. Let me illustrate my point by explaining two common headaches I run into in China.
1. The costs of raw materials go up and down, so the supplier tries to play the market and buy his raw materials at a lower cost. If the raw materials keep going up, the supplier may decide to break the contract rather than cut his margin or produce at a loss. As a Westerner used to dealing with Gantt charts and contracts back home that “mean something”, I was totally blown away by this casual attitude in China when I first came here 12 years ago. These days when I place the PO or give a deposit to start the order, I make it real clear to the supplier that I expect him to purchase the raw materials ASAP and I have my team (or 3rd representatives) on site to verify materials have been purchased. In other words “I verify and enforce the Gantt myself at every key gateway” before it gets a chance to run too far off course.
2. You would think the above step would solve things, but….think again. Even after verifying the materials for my order were in the factory, now and again, I would get a call at the 11th hour stating the supplier couldn’t ship and usually some reason was made up like “power outage”, “lack of workers” and the most common fake reason- “equipment or tooling problems”. 9 out of 10 times, when I looked into it, I learned that another more important buyer (in the eyes of the factory) twisted the arm of the supplier to use my stock for their order. If you are buying 10,000 neck ties and Wal-Mart walks in to your supplier with an order for 1 million, you may find the supplier ready and willing to break the terms of your agreement to make more money from somewhere else. That is why I try to find factories that are an appropriate size where my order will get the respect it deserves. Another tool I use is to build a “goodwill piggy bank”. I try to maintain good relations through holiday greetings, frequent visits/ meals and even vacation invitations so that the suppliers get to know me as a good friend rather than just PO #. This goodwill has saved me a few times when my suppliers opted to honor the friendship when the contract alone would not have been persuasive enough.
In short, a Gantt chart is an essential tool of project management. But it takes a project manager to enforce the tool and if the project managers don’t have goodwill or legitimate “carrot and stick” power over the supplier, even the best project manager and most detailed Gantt chart will not always lead to meeting targets for lead time(s), price and quality. Perhaps the most frustrating things about China sourcing is that the buyer (not the supplier) generally ends up doing the project management. This kills a lot of small projects when the buyer doesn’t have the resources or budget to manage the supplier.