We’ve been working on samples for a large order of clothes for over a year now. The clothes are cool, new, fun. But it’s been a very difficult process getting to the end of the road—the start of actual production.
We’ve got the PO signed, the deposit paid and what happens? Factory tells us: “We don’t think that we can do this order. We’re really busy now.” This, of course, was the response to the payment of the deposit. No indications prior to the placing of the order that there would be anything problems. We’ve talked EVERY day in the two weeks preceding the actual transfer of funds and every conversation was great. “Of course we can meet these dates.” “Of course we’ll work with you QC.” “Of course we’ll meet all the QC standards (you’ll never be as strict as our Japanese clients.)”
So we’ve spent the last week just trying to get them to keep the commitments that they agreed too (signed and chopped) in the contract. Every single line in the contract was review with them before they signed it. Every point was agreed to. Dates were confirmed. Qtty’s and time frames agreed to.
And then they got the money and EVERY item that was important (material, quality, times, prices) were all no longer committed to.
We have a negotiator/problem solver that we hired just for situations like this. She worked on the factory for three days before we got back to the point where we were when we made the deposit in the first place. (Side note–this person does the least amount of actual daily punch-the-clock work in the office, but saves us more money than any other single employee other than maybe QC.)
Here is what she reported to me after the order issues had been resolved.
1. They did it on purpose. She said that there are times when there are legitimate concerns and changes and times when it is completely a strategy to get more money. The major difference between real and fake issues include: when you can track changes in material prices, you can see factory capacity already maxed out, or there are differences in the samples and production standards.
2. Fighting about the contract is not nearly as effective as begging. It’s all about face. They know they are wrong but allowing them power can often be as effective as offering them money. The end result of our negotiations is them being in power anyway—they have the deposit, the control the speed for the production line, they monitor the QC, purchase the materials—there is so much that could be sabotaged and be made to look it was just bad luck. So, giving them the face now and admitting that we’re at their mercy is both pleasing to them and the truth. We don’t pay any more (yet) and can still go after them legally if we had too. But at this point they are pretty pleased with themselves and we’re just glad to be back to square one.
3. Thanking them profusely (gifts) is the correct response. A dinner will cost $100 for the manager that told us “we moved other projects back for you.” A shirt or wallet (brand name but from Ross or another US discount store) gives tons of face and costs $20. It fulfills the social obligation we had to the manager for “helping” and it saves us a bundle of money we would have wasted in transferring the order or suing them or fighting and raising the price. I’ve often said that sometimes the best option is paying more to get what you had already agreed to. When it’s a small gift or dinner it’s almost not even painful. Ego is a bit hard to swallow, but that’s about it.
Sometimes you are totally in the right. Sometimes people lie to you. Sometimes there is nothing you can do about it. But the end goal, which is often very very hard to remember, is to get the project done (correctly, on time and on budget). You may not get what you wanted at the originally contracted-for price, but on balance you’re still getting what you want (and it’s still at a savings too!).