Partial Shipments

Need some advise...
I own a small machine shop. Over the past couple of years, one of my long time customers has been constantly asking for a partial shipment, on almost every order that comes thru the door. The usual "please help, we are late, need the first 2-pieces rush, rush, rush". I don't mind doing this once in a while, but as of late, it seems to happen every single time. I end up packaging & shipping a batch of parts twice, rather than just once. That adds up.
Any suggestions? Or am I out of line on this?

When they ask for the rush partial shipment, tell them that you will have to send a revised quote and get a revised PO to cover the cost to expedite a partial. No reason not to get paid extra for extra work. Make it worth your while to do double setups if that is what it takes, plus the hassle to re arrange scheduling of other jobs if that's what it takes. Be up front with the costs rather than after the fact. They may be crying wolf if there are no consequences. If you know they want a partial when you are initially quoting, just add the extra cost into the quote.

HuskyNut said:

Need some advise...
I own a small machine shop. Over the past couple of years, one of my long time customers has been constantly asking for a partial shipment, on almost every order that comes thru the door. The usual "please help, we are late, need the first 2-pieces rush, rush, rush". I don't mind doing this once in a while, but as of late, it seems to happen every single time. I end up packaging & shipping a batch of parts twice, rather than just once. That adds up.
Any suggestions? Or am I out of line on this?

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Happens to us from one of our customers all the time, sometimes we let it slide, other times we ask them to split the order into 2 lines on the purchase order, and ask for price change on the rush line to reflect qty shipped eg,. (say they order 6pcs, we ship 2 early at the 2pc$ & the remaining are shipped at the 4pc or 6pc$). Sometimes you gotta give and take with a customer, ill give you it this time but next time we charge full price, etc.

Some places have an expedite fee. Usually a couple hundred bucks.
For my customers I tell them "Sure, I can have them to you by XX date" and give enough time to run the whole order. Then I deliver the rush parts and let the rest sit before I deliver them.

Usually this customer has multiple line items per PO and doesn't like me to deliver until the whole PO is complete.

HuskyNut said:

Need some advise...
I own a small machine shop. Over the past couple of years, one of my long time customers has been constantly asking for a partial shipment, on almost every order that comes thru the door. The usual "please help, we are late, need the first 2-pieces rush, rush, rush". I don't mind doing this once in a while, but as of late, it seems to happen every single time. I end up packaging & shipping a batch of parts twice, rather than just once. That adds up.
Any suggestions? Or am I out of line on this?

Click to expand...

Unless it's really inconveniant, I would let it slide. your a small shop, economy is slowing, there's plenty of competition, whatever it takes to keep the customer you should try and do.

Only you know how it effects you, none of us do as we are in your shoes.

There's certainly no harm in having a conversation with the customer explaining how it effects your work flow etc etc. Some customers will understand, some don't, some don't care. I have customers who fit into all three of those categories. The ones who don't care get a little extra mustard on the pricing i give them.

RJT said:

When they ask for the rush partial shipment, tell them that you will have to send a revised quote and get a revised PO to cover the cost to expedite a partial. No reason not to get paid extra for extra work. Make it worth your while to do double setups if that is what it takes, plus the hassle to re arrange scheduling of other jobs if that's what it takes. Be up front with the costs rather than after the fact. They may be crying wolf if there are no consequences. If you know they want a partial when you are initially quoting, just add the extra cost into the quote.

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You could always tag another line item for optional expedite.

We used to charge a “job takedown” fee for when we had to push jobs for a rush.

We have to setup for that other customer twice now and it’s not their responsibility to pay that

Booze Daily said:

For my customers I tell them "Sure, I can have them to you by XX date" and give enough time to run the whole order. Then I deliver the rush parts and let the rest sit before I deliver them.

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I sometimes do this but then tell the customer something like "I decided to work on and get the lot finished so I could deliver all at once". Happens to me quite a lot though. Customer wants me to rush one or two through out of an order of 5 parts or so. Usually it would take longer in setup time if I've got to tear down an op1 setup for op 2 and even if I'm getting paid for it I can't afford the additional time due to other commitments.

On the couple of occasions I've gone back to the customer and said sure, I can do it but it means working nights for £xxx extra they usually decide they're happy to wait an extra day or two for me to get everything done in one. It did come back to bite me once when I offered that and they took me up on it. Felt good when the invoice went out but working a full day then straight into a full night wasn't fun!

I learned a long time ago, if they have to wait til Wed. for parts instead of me working all weekend to deliver on Mon. my customer won't go out of business.
Neither will I.

As other's have said, add an expedite fee that's not exorbitant.

Are these repeat jobs? If so, maybe an opportunity for some "sleight of hand": Make a couple/few extra next order, have those on the shelf ready for the next time.

In our shop we accommodate partial shipments when we can, for the same reasons you've described. Customer is in a jam, full order is still 8 weeks out, but can we ship a few sooner?. Customer's appreciate when you flex their way when it's possible and they are in a spot.

Good luck to you.

Unfortunately I ask for this on a regular basis.

One thing the shops supplying me have started doing is asking up front on all rush orders “Will you want the first X parts as a partial shipment?” This lets them know before they quote. Obviously this works a lot better when 1 button press equals one part, and a lot less well when the last step is heat treatment.

The thing I do is often ask the shop to write the quote as X price per part and Y expedite fee. When I say “$500/part” I get “that shop is expensive.” When I say “$200/part, $4000 expedite fee” it makes it more clear that this is our own fault due to poor planning. Obviously the latter should be used carefully as it clearly puts blame in the customer’s hands.

HuskyNut said:

Need some advise...
I own a small machine shop. Over the past couple of years, one of my long time customers has been constantly asking for a partial shipment, on almost every order that comes thru the door. The usual "please help, we are late, need the first 2-pieces rush, rush, rush". I don't mind doing this once in a while, but as of late, it seems to happen every single time. I end up packaging & shipping a batch of parts twice, rather than just once. That adds up.
Any suggestions? Or am I out of line on this?

Click to expand...

I used to do that now and then but stopped I also did it with new customers to get a foot in the door. I found that it was just not a great idea, better to charge what you need to charge, your goal is to make money not to make a purchasing agent look good. If I am asked to do a rush job or a partial I tell my customer I am happy to do it but a price revision is required, I have never lost a job due to this. The purchasing agent if he has any experience at all knows full well this costs you money and many times are just fishing for savings. I will say this, none of my long term customers that I have a good working relationship will EVER ask me to do this. As for the ones that used to ask for this a lot let's just say we don't do much for them anymore. If you are busting your ass and taking all the risk you need to be paid for it, what good is a customer you are losing money on even if it is a small amount of money.

Many times a partial shipment only requires a second shipment.
Meaning - just the logistics is about the only extra expense.
This should not be a deal breaker in most cases.


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Think Snow Eh!
Ox

I ship partials all the time.................if'n I'm in the middle of runnin a 2000 pc order I'll send off a few hondo to keep my customer in parts. They had to get packaged regardless. But they know if it's ever an inconvenience to me, I'll charge them for it.

There’s an important distinction here. If it’s a case of 10 parts where all parts go through the first OP, then all through the second OP, etc. it might be really inconvenient. If it’s 1000 parts falling finished off a Swiss it’s a lot easier.

joecrs said:

As for the ones that used to ask for this a lot let's just say we don't do much for them anymore. If you are busting your ass and taking all the risk you need to be paid for it, what good is a customer you are losing money on even if it is a small amount of money.

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Yes, you aren't just losing the money on that job, but also the time and money you could be making on a more profitable job.

Lots of good comments, imho, ime.
I agree with most-all.

Most large suppliers accept an expedite-fee, if You want something from them faster or partial shipments.

I would do the same, with or preferably 1. without tear-down costs or quotes.
(1) This depends on the customer, the parts, your manufacturing, value of the parts, qty, how easy it is to get made elsewhere, many things.

Charging a 2123 $ expedite free for partial shipment may be totally painless to the customer.
It might be written off internally as shipping expenses, logistics, or whatever.
2000$ looks like a charge. 2123 $ looks like "costs".
So it would not show up as cost of parts, necessarily, typically, for them, leading to competitive sourcing.
Like the silly "fuel surcharge".

With larger parts, a 65.140€ expedite fee might be the same or less than the shipping costs, again a total non-issue.

jccaclimber said:

There’s an important distinction here. If it’s a case of 10 parts where all parts go through the first OP, then all through the second OP, etc. it might be really inconvenient. If it’s 1000 parts falling finished off a Swiss it’s a lot easier.

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Yes. No. Depends.

Often better service in 10 pc lots lets You charge 200$ per part, where 1000 lot ends up at 30$ each.
Often the customer makes more money in peacemeal lots, per month.
Even at parts 6x the cost.

It IS NOT necessary or desirable to be cheaper than someone else.
It is desirable to make the customer think they make more money with you, per unit.
This is often possible with much higher supply prices than anyone thinks.

You are just taking out the part that amazon, distributors, banks, financiers, usually charge.
This is often 3/4 of the total retail value of the part, or 4x - 8x your sales price.

hanermo said:

Yes. No. Depends.

Often better service in 10 pc lots lets You charge 200$ per part, where 1000 lot ends up at 30$ each.
Often the customer makes more money in peacemeal lots, per month.
Even at parts 6x the cost.

It IS NOT necessary or desirable to be cheaper than someone else.
It is desirable to make the customer think they make more money with you, per unit.
This is often possible with much higher supply prices than anyone thinks.

You are just taking out the part that amazon, distributors, banks, financiers, usually charge.
This is often 3/4 of the total retail value of the part, or 4x - 8x your sales price.

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Very interesting. I had never thought about it like that.

The $2000 vs $2123 thing is brilliant. Was this something you discovered as a purchasing agent or vendor?

There is a valid point Hanermo's post. I have a part right now that I buy from production shop A for $X. They can get me prototypes, but it takes 3 weeks from order to delivered part.
I occasionally buy from shop B for 15X because they will do small quantity in 2 weeks. I recently bought a pile from shop C (at the recommendation of shop B) and paid 45X my long term price because they could get me the first parts in 2-3 days with the remainder by the end of the week. Sometimes you get yourself into an emergency and are willing to pay someone else to help get you out of it.

Freedommachine said:

Very interesting. I had never thought about it like that.

The $2000 vs $2123 thing is brilliant. Was this something you discovered as a purchasing agent or vendor?

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Both purchasing and selling.
Lots of my friends have discovered similar things.

A price both buying and selling is often very fungible, with some commodity issues.
The customer wants to feel good, both buying and selling.

1.
You can often sell Yourself as a better company, provider, selling a similar product slightly more polished or packaged, but as a premium vendor who pays more attention to Your client.

Many, most, clients will sometimes choose You, at a significantly higher price point.
Because most other sellers are lazy, undisciplined, constrained by their boss/rules/etc. Not all, but most.
Because someone is also selling the same thing at a 270% markup - and doing a bad job.

You dont need to be better than the best (flextronics contracts apart) - you just need to be better than the guy next to You.

You then *need* to provide ongoing attention to that premium client - and sometimes help them at a loss to You.
THAT is the cheapest best advertising You will ever get.

3000$ in free goods, and installation/packaging/delivery/whatever ... when it was THEIR fault ...
Can often net You 20k$/month in extra sales or even margin, forever, with the client singing Your praises to everyone they know.

If You are a premium provider then You MUST provide premium attention and service.

2.
If You DO provide premium service You are NOT cheating the client.
The client buys premium concierge service, curbside, and gets it, and You charge whatever is needed to make sure You REALLY want to serve that client excellently.
About 30% of clients don´t want to pay .. ideally You want to get rid of them. Sometimes you can, sometimes not.
About 40% of clients, 20% easier, actually want to pay for premium service.

But they often think they probably wont get much of it, since almost-all of their experiences have shown them higher prices do not really get much better products or services.
Bootlicking and polish, yes, reality, no. Mostly.

3.
Many cases also call for downgrading the clients expectations.
They state the 50k quote is expensive.
You state yes, it´s very expensive, and lkely to rise 17-35.000$, depending.

Since You did not provide proper details "a..b..c.." I really think it´s risky.
You should, as well.

And of course You need to provide such details.. if You want it firmed up a bit.
So did You want Your thingy in the near term, with the 35k extra, or more, in the near term or never, as we are firming up our schedules ..