Well judging from what I've seen a few things could happen. The first is that you notify them and try and fix the problem. If they're slow to respond then you would start looking into other vendors. I assume that there would be other options that were looked at during the selection process. Those would be the first options. You are dependent on those vendors according to your situation. You can't prevent delays from happening, you can only change the length of the delay.

Agreed, at this point it will not be possible to not delay the project, unless the quality of the product is sacrificed, which is the last thing any company would want to do. So as for minimizing the delay caused by receiving a high quantity of defects in a shipment form a vendor, the most viable option would be to immediately contact your current vendor, and ask for an expedited replacement shipment. If they are not accommodating with this, then it is time to contact other sellers, and determine which one would minimize the delay and cost. Scenarios like this are not common, but they do happen, and knowing how to deal with them are imperative for success.

Since we are already at the validation phase, I would try to fix the issue with the primary vendor first. I would consult with the primary vendor about the amount of defeats in the packaging provided. Then, I would have the vendor visit the site to survey the amount of damage and poor quality, or take pictures for the vendor to evaluate. We will also discuss the shipping methods used to ship the replacement packaging, since the product may have been damaged due to a poor shipping carrier. In order to minimize delay, I would agree to pay for the expedited shipping if they agree to provide the replacements free of charge. I would contact other vendors if the primary vendor is not able to answer and get the replacements to me in time.

From our most recent lecture we learned that requesting seller responses and selecting vendors is part of directing and managing project execution. During this phase you are obtaining quotes from approved vendors and verifying them with quality systems depending on the components critical impact to your product. The company has done their due diligence in composing the list of approved vendors, taking into account their track record of success and quality. Ideally an issue with quality of product coming from a vendor shouldn't happen, but in the real world it is always possible so I think, depending on your time constraints, you should let the vendor correct their manufacturing issue via their own internal root cause analysis and give them a deadline for expedited delivery, if its possible to visit the facility then you should consider it. Maybe even try to get a discount to compensate for lost time, at the threat of losing you as a client and missing out on all of your future production needs. I would think that switching vendors is also a viable option, but depending of the severity of the defects and if the vendor was able to correct them, it is a good idea to work out a deal that makes up for lost time in the form of a discount on future bulk production.

If a vendor is providing a medical device project with defective equipment/packaging, then they need to be made aware of it immediately so that they can either address it, or at least prevent it from happening to other clients. Whether or not there will be any resulting delays in a project is based on how the contracted vendor handles the situation. The worst-case scenario at that point would be to readdress the terms to how you came about choosing that vendor so that reconsideration can be made in the future. Selecting a vendor is actually known to have phases that are aimed at directing a project to its most ideal supplier. An online source that specializes in project management states that there are five essential phases when contracting a vendor:

Phase 1 is pre-solicitation planning where it is determined whether or not a vendor is needed followed by each prospective vendor drafting a request for proposal (RFP) that shows that the vendor is interested in partnering up with the project company and is aware of the consumer's needs and will adhere to the conditions set.

Phase 2 is where the optimal vendor is selected from the provided list of RFPs. The vendor selected in this step is usually one who provides the best quality materials at the lowest cost.

Phase 3 is to meet up with the desired vendor and award them the contract with your company. This step revolves around ensuring that the selected vendor is aware of expectations by providing them with a brief orientation of your company's values.

Phase 4 is to contract management of both companies which allows for monitoring and control over the project's workflow and permits the client to audit the vendor's facility should the need arise.

Phase 5 is the contract closure in which the buyer and vendor have fulfilled their sides of the contract and final payments and closure documents are carried out.

The entire process of selecting a vendor seems to require a lot of in-person meet ups. Is it possible to apply emotional intelligence as either a PM or a vendor in order to acquire a desired contract? What happens if a PM notices too many faults at a contracted vendor's facility during an audit? Will the contract be re-negotiated or altered? If a vendor is satisfactory and their contract is renewed, how might this new contract differ from the original one assuming there will be any changes at all?

References:
"The 5 Phases of the Vendor Selection Process" project-management website

As ih37 described, it is critical to clearly establish your customer needs and expectations in your relationship with the vendor. When the packaging provided by the vendor is arriving with defects, they are not meeting their contractual agreement. Well before considering finding a new vendor, the detected defects must be directly discussed with the vendor in question. Considering that the vendor was previously audited and validated by your company, the vendor has a track record to be trusted and should be given the opportunity to resolve the issue. However, given how much this failure delays the project, an agreement must be settled with the vendor that will allow you to get back on schedule and minimize the costs. Their ability to recover from the failure will determine the future of your relationship with the vendor. That is, expectations should be set in the vendor's failure recovery, and if the vendor fails in meeting the expectations, the relationship should be placed under reconsideration.

As most responses in this thread indicate, talking to the vendor directly to let them know the issue would be the simplest way of dealing with any problems in regards to the product they are providing. In the original example given where there is an unusual amount of defects in the packaging, the best course of action would be to call the vendor, and ask them plainly what happened? Discuss what went wrong, and how it should be corrected. As a PM it is your responsibility to make sure everything goes smoothly throughout the duration of the project. If the vendor is reluctant to fix the problem either because they refuse to or possibly cannot, then it is time to consider weighing your options. You could do a risk assessment of the defective packaging; which would entail testing the packaging to see if it would still do what it needs too. If not then it is more than likely time to start looking for a new, more reliable, vendor. Someone who can make the proper packaging without any issues. This may cause for a delay in time, but its better to be accurate than to create a faulty product. All in all the fix for an issue with a vendor can be as simple as calling them. Mistakes are bound to happen, as humans it is what we do, and they are fixed most easily by being pointed out and corrected.

In case of vendors, the project manager should have multiple options for vendor and should select the best. In this case, if a vendor provides a defective material, before delivery, the project manager should check the sample of the material.

The project manager should look at the track record of the primary vendor and if it is not satisfactory he/she should be on a lookout for another vendor who has a better track record with other companies getting similar kind of material you are getting. This vendor should be identified and should be taken on board as soon as possible. One needs to be professional at whatever he/she is doing so as to go a long way.
For the current question, I would say we need to check the package on arrival and if there is defect it should be conveyed to the vendor ASAP so that he could send a replacement also vendor should know that the timeline is affected because of this. Steps need to be taken if the material delivered every time is defective/damage.

I would hold a meeting regarding the situation with all vendors and project departments involve and devise a plan to resolve as quick as it can. The first plan would be testing each part of the product in order to determine what is the cause of the defect and making sure that during inspection process nothing has defected the product. Once the source is detected, find a way to fix the product for example, going back to the manufacture company making sure that the package is being done properly without anything that can influence the defect or change inspection process. This will reduce the amount of time but however if it doesn't fix the problem, there has to be a change in the product.

The project manager should look at other vendors in a timely manner and contact them for a quote. He should also look at the all their track records and only contact the ones with a clean record. He could also host a meeting with project team members and ask their thoughts. He could host a vote amongst members. One of the most important things is to have consensus on the team before a decision is made. It is possible that the damage is fixable and the vendor will just take a price cut. Another option is to discuss it with the vendor and see if he could deliver another batch in time.

A couple of things should happen at once. The project manager should begin looking into other vendors and get quotes from them. At the same time, an audit should begin on the vendor to determine if the problems are from their manufacturing side. And also, the company's packaging procedure should be reviewed and updated to avoid these types of failures. If the results of the vendor's audits were that they were using unqualified procedures, then you have a couple of options of keeping a relationship with them or severing it in favor of a new vendor. If their packagings were manufactured properly and there is no problem from the vendor's end, then you know that you will have needed to have updated your procedures anyways.

In order to avoid such a delay issue, a project manager should initially contact multiple vendors, and get all the information he/she needs for the product. This would give flexibility on time and flexibility to switch to any other alternative solution. Another thing to consider is to allow an extra time period during the planning phase as a precaution time in which if any delay occurs the overall final plan would not be affected. A backup plan is always essential and that should be discussed by the team member and PM.

I agree with previous posts to contact the vendor to identify the problem and a solution. However, this is not an unusual issue and typically the way that companies control these problems is by establishing specifications for which the vendor must produce against and quality agreements that vendors agree to. This way the vendors have testing to ensure their packaging meets specifications established with your company before they ship the product. Any product that fails the specification would not be shipped and would be at the vendor’s expense. So it is in the vendor’s best interest to fix any issues and ensure the product meets the specifications.