Vendor Chasing Is Costing You More Than You Think

Every shop does it. Someone — usually the PM, sometimes the owner — spends part of every day calling vendors to check on open purchase orders. "Just checking in on that heat treat job." "Any update on the plating?" "We need those back by Thursday — are we still on track?"

It feels like staying on top of things. It's actually a symptom of a broken process. And it's costing more than the phone bill.

The Hidden Labor Cost of Chasing

Start with the most obvious cost: the time your people spend on it.

A production manager tracking 30 to 50 open outside processing jobs might spend anywhere from one to three hours per day on vendor status calls. That's not an exaggeration — it's what shops report when they actually track the time. Follow-up calls, voicemails, waiting for callbacks, updating the spreadsheet, following up again when the callback never came.

That's $22,500 per year in PM time spent making phone calls. And that's a single person at a mid-size shop. Larger operations, or shops with higher PM salaries, scale that number up fast.

But the labor cost is only part of the picture.

The Opportunity Cost Nobody Tracks

The more expensive problem isn't what your PM is doing — it's what they're not doing.

A PM who spends two hours a day chasing vendors is a PM who spends two hours a day not doing something else. Not quoting. Not scheduling ahead. Not catching the delivery risk three weeks out before it becomes a crisis. Not building the vendor relationship that would get your jobs prioritized when the shop is backed up. Not reviewing work-in-progress for the next bottleneck.

This is the opportunity cost nobody puts a number on because it's invisible. You can't point to the quotes that didn't get written fast enough or the schedule conflict that didn't get resolved early. But they're real, and they accumulate.

Late Deliveries Are the Compounding Cost

Manual follow-up is reactive by design. You call when you think of it, or when the due date is close, or when the customer asks. By then, the window to avoid a late delivery is often already closed.

Consider what a single late delivery actually costs a shop:

• Expedite freight — Next-day air on a job that should have shipped ground because your processing came back two days late. $200 to $800 depending on part size and distance.
• Overtime — Staying late to finish a job that's already behind. Usually unplanned, often unrecoverable in margin.
• Rush processing fees — If you go back to the OSP vendor and ask for expedite service, they charge for it. Expect 25 to 50 percent premium on the processing cost.
• Customer penalty clauses — Some contracts, especially defense and automotive, have liquidated damages provisions for late delivery. A single late shipment against a LD clause can wipe out months of margin on that account.
• Customer attrition — Harder to quantify but probably the most expensive. Customers who have been burned by late deliveries source away quietly. They don't always tell you why.

One late delivery a month, fully costed, is easily $1,000 to $5,000 depending on what's involved. Shops managing dozens of open OSP jobs at any time are having multiple late deliveries per month — and most of them trace back to the same root cause: nobody knew there was a problem until it was already too late to fix it.

What Automation Changes

Automated vendor follow-up doesn't eliminate the need for human judgment. It eliminates the need for humans to do the part that doesn't require judgment — the routine check-in calls, the reminder emails, the "just following up" messages that vendors need to stay on schedule.

When those touchpoints are automated:

• Vendors get contacted on a consistent schedule, not just when someone remembers to call
• Follow-up escalates automatically when a vendor goes quiet near a due date
• Every response is logged, so anyone on the team has visibility without asking the PM
• Late risk surfaces before the due date, when there's still time to act

The PM's job shifts from information gatherer to decision maker. Instead of spending two hours on the phone, they spend 20 minutes reviewing what the system flagged and making calls that actually require their expertise. The shop gets more from the same headcount — or the same output with less headcount as the operation scales.

This is the same principle behind moving off manual tracking and building real visibility into OSP workflows. The labor you're spending on vendor chasing is labor you're choosing not to spend on something better.

Running Your Own Number

If you want to know what vendor chasing costs your shop specifically, the math is simple:

1. Estimate how many hours per week your team spends on vendor follow-up calls across all open POs
2. Multiply by your fully-loaded hourly cost for those people (salary + benefits + overhead, typically 1.25x to 1.5x base salary)
3. Multiply by 50 working weeks
4. Add an estimate for late-delivery costs in the last 12 months

Most shops that go through this exercise land somewhere between $15,000 and $80,000 per year in direct and indirect costs. Some land higher. Very few land lower than $10,000.

That number is the budget for fixing the problem. Whatever automation or process improvement costs less than that number is a return-positive investment — and the better ones pay back in months, not years.