The Golden Rule for Handling POs, Sales Orders, and Customer Relationships: Always Get it in Writing
If you're involved in any facet of Purchase Orders (POs), Sales Orders, Customer Relations, or Quality Control in a manufacturing facility, this article is a must-read. It's a quick guide on why it's crucial to get written confirmations for every change and agreement you make with customers. Failure to do so can not only affect the current transaction but can have long-lasting repercussions on future business opportunities. Let's delve in.
Why Written Confirmations are Non-Negotiable
POs are Contracts
First things first: Purchase Orders are not mere formalities; they are contracts. Even if you have a verbal agreement with a customer, their systems will still operate based on the original written PO. This disparity can lead to a host of issues, including:
- Late Deliveries: Your parts could be tagged as late according to their system.
- Invoicing Conflicts: You may invoice at a different price than what their system expects.
- Quality Disputes: Sending parts that don’t meet the original specifications can lead to disputes and reputational damage.
Even if you manage to sort out these issues, the damage is often done. Systems that evaluate vendor performance will now consider you a risk, affecting your ability to secure new business from existing clients.
When Do You Need Written Confirmation?
Change in PO Information
If a customer wants to change any detail in the PO, such as pushing out a delivery date, insist on receiving a new, updated PO. Don't proceed until you have it in hand.
If you're negotiating a change in price or any other term, wait for the customer to issue a new PO reflecting these changes before you start fulfilling the order.
If a customer agrees to a deviation concerning a quality issue, halt all processes. Do not ship the parts or alter your process until you receive a signed deviation document specifying what is agreed upon in terms of quantity, timeframe, etc.
How to Handle Verbal Agreements
It might feel counterintuitive to halt operations based on a verbal go-ahead from a customer. However, remember that memory is unreliable. When discrepancies arise months later, no one will remember that call, and your On-Time Delivery (OTD) ratings will suffer.
A Quick Fix that Pays Off
If you're constantly firefighting issues around POs, Sales Orders, and Customer Relationships, know that the fix is simple but effective: Do not act on a contract until all details are in writing. This could be in the form of an updated PO or a signed deviation document. It's a small step that can save you a world of hurt down the line.
Getting written confirmations for every change and agreement is not bureaucratic red tape; it’s smart business. The discipline it brings to your operations can be the difference between being seen as a reliable supplier and one that’s too risky to engage. Make it a standard procedure, and you'll find that not only do you minimize risks, but you also open doors for more business opportunities.
By adhering to this golden rule of always getting it in writing, you build a foundation of trust and reliability that customers seek in a long-term partner. It's a win-win situation: you protect your interests, meet customer expectations, and pave the way for future business growth.