"Almost done" is not a schedule
Writing a China factory purchase order and tracking production - from the must-have clauses to WIP reporting and early warning signals

Hello, this is GreenFrog Seoul.

"When is it shipping?" "Don't worry, it's almost done."
"The PO says 45 days. Why are we on day 60?"
"We agreed the color change over WeChat. Why did you build it in the old color?"
"Materials were late and we're two weeks behind — and I'm hearing about it today for the first time."

Most import disasters are not quality disasters. They are schedule disasters, and when you take them apart the cause sits in the same place every time. Something that should have been on the purchase order was not on it, and across six weeks of production the only information the importer received was one line saying things were going well. The problem always surfaces days before shipment, and by then the only card left to play is air freight.

Today we are on purchase orders and production tracking. What belongs on a PO, why every change needs a new revision and a written reply, how to break a 45-day build into milestones, what the weekly WIP report you should be receiving actually looks like, which signals tell you a delay is coming and what each one means, and — once a delay is confirmed — the order of moves that loses you the least money.

Delivery dates are not kept by the factory; they are managed by the importer. And managing does not mean chasing. It means building the habit of collecting numbers every week. On orders where the numbers come in, a delay is visible three weeks out. On orders where they do not, you find out three days before shipment.

1. A purchase order is a work instruction, not a contract

Mixing the two up is where trouble starts. A contract is the legal frame that decides who is responsible for what when a dispute breaks out. A purchase order is the working document that tells the factory how to build this particular order. Writing "quality shall meet the agreed standard" in a contract is perfectly normal. Writing it on a PO means nothing at all. On the PO, that "agreed standard" has to be pinned down as a drawing number and a revision.

Deal structure and the legal clauses themselves were covered in Episode 12 on OEM and ODM contracts, so I will not repeat them here. What we are looking at today is the working instruction that sits on top of that: one page a factory's production planner can read and act on directly.

Look at the POs actually moving between importers and factories and you will find a great many that carry four lines — item, quantity, unit price, delivery date. Four lines will not prevent a dispute. When you say "we asked for that specification" and the factory answers "we were never told that," the conversation ends right there.

What a China factory PO must carry

Every line in that table comes from a real dispute. Three of them in particular get skipped often and cost a lot.

Defining the delivery reference date. Write "delivery: October 20" and the factory reads it as the day goods leave its warehouse while you read it as the day the container lands in Busan. Sitting between those two readings are 2-3 days of trucking, 3-7 days waiting on a booking, and 5-12 days at sea. Nail it down on the PO in one line: "Delivery date means the date of completed ex-works dispatch from the factory."

The liquidated damages (LD) clause. Rates are usually set at 0.3-0.5% of order value per day of delay, capped at 5-10%. Collecting that money in practice is hard. The reason to include it anyway is different. From the factory owner's chair, when an order with a price on delay sits next to an order without one, the priced one moves first. LD is less a clause for recovering damages than a clause for buying priority on the production line.

Tooling and leftover material ownership. Even when you paid for the mold, if ownership is not written into the PO or contract the factory will call it factory property. Leftover raw materials work the same way. When 500 pieces of a buyer-supplied component are left over, if you have not written down whose they are and how they get handled, the answer next order will simply be "those were already consumed."

2. PO numbering and revision control

A purchase order is a living document. Quantities change, colors get added, delivery dates move. If you overwrite the original file each time and resend it saying "updated," a few weeks later nobody knows which version is final.

The rule is simple. The PO number never changes; every change just increments the revision. GF-2609-01 stays GF-2609-01 and goes Rev.0 → Rev.1 → Rev.2. Put a one-line note on the first page saying what changed, and tracing the history later becomes far easier.

Why verbal agreements carry no weight

Work with Chinese factories long enough and a lot of the negotiating happens over WeChat voice notes and phone calls. It is fast and convenient, which is why it happens — the problem is that those agreements have no force later.

There are several reasons layered on top of each other. Conversations run through an interpreter always lose nuance, and what you heard as "by next Tuesday" lands with the other side as "sometime next week." When the contact person changes, the handover happens on paper only, so verbal agreements evaporate wholesale. Above all, inside a Chinese factory organization, anything a sales contact tells you without sign-off from the owner or production manager is not binding internally. Being told "yes, that's fine" while no instruction was ever issued inside the plant is a genuinely common outcome.

Which is why you collect a PO Acknowledgement. The format does not need to be elaborate. The factory prints the PO you sent, applies the company chop (公章), has the responsible person sign it, and scans it back. With that one page, "we didn't know those were the terms" stops being available.

One practical habit. If you agree something over WeChat, immediately post it back into the chat: "Here is a summary of what we agreed today. Please reply 'confirmed' if this is correct" — written in both Chinese and English. Even a two-character "确认" turns the chat log into evidence. Issue the revision after that.

3. Break the production schedule into milestones

"It takes 45 days" is not something you can manage. It means there is nothing to verify for 45 days. The structure guarantees you hear "going well" through day 44 and get told on day 45 that two more weeks are needed.

Break the block up and it becomes manageable. Production generally splits into the seven stages below, and each stage produces something you can actually look at.

Splitting a 45-day lead time this way makes the control points obvious. The most important cell in the table is the material receipt rate at D+15. If only 60% of materials are in at that point, mass production starts late, and there is almost no room to compress the later stages, so the delay carries straight through to your delivery date. Catch it there instead and you still have 30 days and several ways out.

Do not skip the pilot run. It means running 1-3% of the total quantity through the actual production line first. Problems caught here cost you a few days; problems missed here cost you a full rework of 3,000 units. Factories usually push back with "the sample is approved, let's just go" — but an approved sample was hand-built by a skilled worker and a pilot unit came off the line, and they do not come out the same.

4. WIP tracking - collect numbers once a week

"Almost done" (差不多了) is not data. It gets said when production is 90% complete and it gets said when materials have not arrived and nothing has started. Planning your logistics and your sales calendar around an unverifiable sentence is where the trouble begins.

The alternative is simple. Receive numbers in a fixed format on a fixed day every week. With the fields locked, filling it in takes five minutes, and lining the weeks up side by side shows you the trend.

Weekly production progress format

What you read in this table is not the absolute figures but the changes. If W2 holds the completion date at 10/16 while adding a material delay comment, ask whether the factory intends to absorb the delay or simply has not reflected it yet. If W3 pushes completion to 10/18, find out where those two days came from and whether later stages can recover them. Two days is nothing on its own, but two days a week the same way puts you eight days behind after four weeks, and by then it is too late.

There is a reason to collect defect and rework counts alongside output. Look only at units completed and everything seems fine, but if the defect rate is climbing week over week, that is advance notice of a mass failure at inspection. Moving from 18 units in W3 (4.3%) to 41 in W4 (5.6%) can signal that the material lot changed or the operators were swapped out.

5. The signals that warn you a delay is coming

Delivery delays never arrive out of nowhere. They send signals for weeks beforehand; people just do not recognize them as signals. Here are the ones that come up over and over in consultations.

The heaviest item in that table is the change of background in pilot photos. The floor color, walls, lighting and bench layout you saw on your factory visit do not change easily. If the background in the photos you receive is different, your goods are being made somewhere else. Capacity ran short and the work was subcontracted — to a plant you have never vetted. How to verify factory capacity before you place the order is covered in Episode 98 on capacity assessment.

Response speed is a more accurate indicator than you would expect. When a contact who normally replies within two hours starts taking two days, it is usually because there is no progress to report. People put off bad news everywhere. Which is why, in this industry specifically, I read "no news is good news" as meaning precisely the opposite.

6. What to do once a delay is confirmed

You can catch every signal and still get delayed. What matters then is following the order. Lead with anger and information dries up; once information dries up your judgment goes with it.

Step 1 — Establish the facts

Before "why are you late," ask "exactly how far along are you right now." Get units completed, material receipt status, remaining processes and headcount as numbers, and verify with photos. Bring emotion into this step and the factory answers defensively and inflates the figures. It is better not to raise the question of blame until you have the facts locked down.

Step 2 — Recalculate the size of the delay

The factory's "just one more week" is usually optimism. Divide the remaining quantity by the actual daily output yourself, then add inspection and dispatch time. 1,800 units remaining at 200 per day is 9 days; add 3 days packing, 2 days inspection and 2 days dispatch and you get 16. The conversation starts from the gap between the factory's 7 days and your 16.

Step 3 — Price partial shipment against air freight

Once you know the size of the delay, convert the options into money. The test in the end is which side loses less.

The math goes like this. If air freight costs you 8 million won, work out what that 8 million won is protecting. Miss a booked home shopping slot or a retail launch date and the penalties plus dead inventory can exceed it easily, in which case air is right. If pushing the on-sale date back two weeks costs you around 1 million won, there is no reason to spend eight. Remember too that partial shipment is only a card you can play if the PO already permits it. Without that clause you have to negotiate the permission first, right when your leverage is lowest.

Step 4 — Applying LD and negotiating in practice

Even with an LD clause, collecting cash from a Chinese factory is difficult. Several approaches do work in practice. Offsetting against the balance payment is the most reliable; you can also convert it into a unit price reduction on the next order, or split the air freight cost with the factory. Whichever route you take, close it out by issuing the agreement as a revision and collecting a signature.

Step 5 — Redesign the lead time

Fail to feed what you learned from this delay into the next order and the same thing happens again. Record which milestone slipped and by how many days, and build more slack into that stretch on the next PO. If material receipt ran 5 days late, order materials 5 days earlier next time, or tie completion of material receipt to a payment milestone. If Chinese New Year or National Day falls inside the window the math changes again — for that, read this alongside Episode 44 on Chinese holiday production schedules.

7. A backward-planning calendar from your on-sale date

The most common way importers decide when to order is "stock is running low, let's place an order." That is always late. Flip the sequence and count backwards from the day you have to be selling.

To be selling on March 1, the math says order discussions have to start at the end of November. That is more than a month earlier than most importers instinctively feel it should be. Add a risk buffer and it moves earlier still.

Put the buffer in two places: 7-10 days on the production stage and 5-7 days on the logistics stage. Logistics needs a buffer because the variables you cannot control — space shortages, port congestion — are concentrated there. With buffers included, order discussions in the example above move up to mid-November.

8. Tie payment terms to milestones

More than the percentages themselves, what you attach each payment to is what gives you control. In the common 30/70 structure, if the 70% balance goes out before shipment, a problem at inspection leaves you holding nothing.

The best-balanced structure in practice is 30 / 60 / 10. Making the inspection pass a condition of the balance makes rework negotiations far easier when it fails, and tying the last 10% to receipt of shipping documents cuts down on late B/Ls and certificates of origin. How to design the inspection itself is set out in Episode 100 on pre-shipment inspection.

If the factory finds this structure hard to swallow, there is room to negotiate. On a first order you can raise the deposit a little — say 40/50/10 — while holding on to the inspection linkage, and terms improve naturally as the trading history builds. If you had to pick one thing not to concede, it is this: do not let the bulk of the money leave before the inspection passes.

9. Common mistakes

These come up again and again in ordering and tracking consultations.

• Putting only item, quantity, unit price and delivery date on the PO and leaving off the drawing number and revision
• Not defining the delivery reference date, so dispatch date and arrival date are understood differently by each side
• Wiring the deposit before receiving a signed and stamped PO acknowledgement
• Agreeing changes over WeChat only and never issuing a revision
• Leaving a 45-day lead time as one block with no checkpoints in the middle
• Skipping the pilot run and going straight into mass production
• Substituting "how's it going?" for an actual progress report
• Taking the report numbers without cross-checking them against photos
• Not reconfirming prior agreements in writing after the contact person changes
• Leaving partial shipment permission off the PO and starting that negotiation once the delay hits
• Paying the full balance before the inspection pass and giving up your leverage
• Not recording the delay history, so the same stretch slips again on the next order

10. Ordering and tracking checklist

Before ordering

• Drawing number, revision and approved sample number are stated on the PO
• Pack quantity, inner and master carton specs and label placement are written down
• AQL levels, who inspects and what happens on a fail are stated
• The delivery reference date is defined as dispatch, shipped on board, or arrival
• LD rate, cap and start date are included
• Partial shipment permission and minimum lot are decided
• Payment terms are tied to the inspection pass milestone
• Buyer-supplied material list, arrival dates and leftover ownership are written down
• Tooling and jig ownership and release conditions are stated
• The deposit was wired only after the signed and stamped PO came back

During production

• The factory filled in and returned the seven-stage milestone schedule itself
• The weekly reporting day and format are agreed
• Three to five site photos arrive with the report every week
• The 100% material receipt point was actually verified
• Pilot samples were received and approved in writing
• Every slip in the estimated completion date came with a written cause and recovery plan
• All changes were issued as new revisions and acknowledged
• The latest revision and agreements were resent when the contact person changed

Before dispatch

• The inspection is booked 3-5 days before dispatch and confirmed with the factory
• The balance was settled only after receiving the inspection pass report
• Packing list quantities and weights match the final progress report figures
• Stuffing photos and the seal number are on file
• Actual days taken per milestone on this order are recorded

Closing: a schedule nobody manages is a schedule nobody keeps

When a factory misses a delivery date it is usually not bad faith. Several orders overlap, materials run late, people leave, and in the middle of all that the goods for the customer who pushes hardest go out first. What you can do is put your order near the front of that queue, and the way to do it is not to raise your voice but to become the customer who asks for numbers every week.

It comes down to two things. Put every instruction and standard into your first document, the PO, and get it signed. Then collect verifiable numbers on a weekly cycle while production runs. Get just those two in place and most delays become visible three weeks out — and with three weeks in hand you have several cards to play besides air freight.

GreenFrog Seoul works with importers manufacturing in China to control specification and schedule from a single purchase order, secure weekly numbers off the production floor, and respond to delays before they grow. For matters involving the legal force of contract clauses or international dispute procedure, have a specialist in that field review them alongside us.