The email from planning is short. The build is moving out eight weeks.
Everyone adjusts. The line gets rescheduled, the customer gets a new date, the team moves on. But somewhere in a warehouse, the parts you ordered for the old date are still coming. They don’t read planning emails.
Most purchase orders assume the build happens when it was supposed to. When it doesn’t, the stock you committed to has nowhere to go but your shelf. Here’s what that costs, and how to set things up so your parts move when your schedule does.
What happens by default
When a build slips, three things tend to happen at once.
The cash goes out early. Parts arrive on the original date and the invoice follows. You’re now paying for components weeks or months before they earn anything.
The stock has to live somewhere. Shelf space, handling, tracking, and for some parts, storage conditions you now have to manage for longer than planned.
The reverse hurts more. Schedules don’t only slip. When a customer pulls a build in, the parts you planned to buy later may not be there. In a tight market, the second half of an order is the part most at risk.
None of this is anyone’s fault. It’s what happens when a fixed purchase meets a schedule that isn’t fixed.
Three ways buyers handle it
Keep a buffer and absorb the cost. Buy ahead, hold the extra yourself, accept the cash and floor space it takes. Simple, and expensive.
Split the order into releases. Commit to the full quantity, take delivery in pieces. This helps with cash. But if later releases depend on future availability, a tightening market can leave them short or late, exactly when you need them.
Secure it once, release it as you build. The full quantity is bought and held now. Deliveries are released to match your production schedule, and when the schedule moves, the releases move with it.
Here’s what that last one looks like. Say your build needs 12,000 pieces over six months. All 12,000 are secured up front, held, and released at 2,000 a month. If planning pushes the build out, the next release waits. If demand jumps, a release comes early. The stock exists either way. Only the delivery date changes.
Five things to settle before the PO
- Who holds the stock between purchase and delivery, and where?
- How much notice does it take to move a release out?
- Can releases be pulled in when demand jumps, and how fast?
- What happens if the program is cancelled with stock still held?
- When do you pay: at purchase, or as parts are released?
If a supplier can’t answer these, you already know where the risk sits. It sits with you.
If the build doesn’t happen at all
Sometimes the schedule doesn’t slip. It disappears. A program gets cancelled and the parts are already bought.
That stock still has value, but it drops the longer it sits. You can sell the lot outright for speed, or consign it and share the revenue for a better recovery. We wrote about how consignment works once stock leaves your building.
Where we come in
This is how our scheduled delivery works. We secure your full quantity once, hold it, and release it around your build, with room to pull deliveries in when demand jumps and financing terms built around your cash flow. If the program ends, NexCess helps you recover value on what’s left.
Send us your build schedule. We’ll show you how to cover it. Start here, or find us at electronica this week: Hall C3, Booth 431, 10–13 November. Book a time with the team.
It’s not a part. It’s a partnership.