Blanket orders in the electronics industry – how to secure component availability and streamline deliveries

Electronics manufacturing requires not only selecting the right components, but also ensuring that they are available when needed. Even a well-planned project can be delayed if a display, touch panel, custom electronics or another component required for final product assembly is unavailable.

Continuity of supply becomes particularly important for components with longer lead times and solutions tailored to the requirements of a specific application. Replacing them quickly with an alternative may be impossible or may require additional integration work, testing and validation.

One way to make the procurement process more structured is to place a blanket order. This allows a specified quantity of products to be ordered and then delivered in batches according to a previously agreed schedule. Such an arrangement can make deliveries more predictable, reduce the risk of production downtime and simplify production planning, without requiring the entire order to be delivered at once.

In this article, we refer to Unisystem’s General Terms and Conditions of Sale (GTCS). This document sets out the key terms of commercial cooperation, including the fulfilment of blanket orders. The current version of the GTCS is available here: https://unisystem.com/general-terms-and-conditions-of-sale.

What is a blanket order?

Under Unisystem’s General Terms and Conditions of Sale, a blanket order allows customers to secure a larger quantity of products and take delivery in batches at later dates. The customer orders the entire agreed quantity, while the schedule for individual deliveries and the final delivery date are established in line with their production plan.

For example, a device manufacturer may order 3,000 displays for an annual production program. Instead of receiving the entire quantity at once, the manufacturer can arrange six deliveries of 500 units, scheduled according to the expected consumption of the component.

A blanket order is binding. It covers a specified quantity of products that the customer undertakes to receive within the agreed timeframe.

Why are blanket orders important in the electronics industry?

Electronic components are not always available at short notice, so deliveries need to be planned well in advance. Before a product reaches the customer, materials may need to be ordered, followed by production and quality control, as well as transport and customs clearance. At the same time, many projects require a specific component configuration to remain unchanged throughout the production period. This is particularly important for displays, where changing even a single element may affect:

• the optical performance of the device,
• how the display is driven,
• the mechanical design,
• the location and design of connectors,
• electromagnetic compatibility,
• touch panel operation,
• software and the user interface,
• the results of tests carried out previously.

For custom solutions, the number of dependencies is even greater. A product may combine a display with a dedicated touch panel, cover glass, a modified FPC, control electronics or mechanical components. Such a configuration usually cannot be replaced with just any component offering a similar screen size and resolution.

A blanket order can therefore serve two purposes. It structures logistics and delivery schedules while also helping secure the availability of the specific product required to maintain production continuity.

How does a blanket order work at Unisystem?

Fulfilling a blanket order requires both the total quantity of products and a delivery schedule to be agreed. Under the GTCS, a blanket order can only be accepted once the delivery schedule and the final date for receiving the entire quantity have been specified.

Determining demand

The first step is to estimate the total demand for the component. The customer should specify:

• the product or solution covered by the order,
• the total quantity,
• the expected consumption in each period,
• the required quantities for individual deliveries,
• the preferred delivery dates,
• the final date for receiving the entire quantity.

Agreeing the delivery schedule

The schedule specifies how the total quantity will be divided into individual deliveries. It may include regular batches delivered monthly, quarterly or every six months, but it can also be tailored to an irregular production plan.

Order confirmation

Unisystem then formalizes the order submitted by the customer in a document specifying the terms of fulfillment, referred to as the order confirmation. It sets out the key terms, including the price, total order value, place and method of delivery, and payment terms. The contract is concluded when the customer receives this document.

Upon receiving the order confirmation, the customer should carefully check the product designation, quantity, price and total order value, delivery schedule, final delivery date, company details, delivery address and payment terms. If any provision differs from the previous arrangements or the information provided in the order, the discrepancy should be reported to the sales representative so that it can be clarified and the correct details confirmed.

Preparing or sourcing the products

The fulfillment process depends on the type of product. For a standard solution, it may involve placing an order with the manufacturer.

For custom solutions, the process may also include:

• ordering base components,
• preparing a dedicated touch panel,
• manufacturing the cover glass,
• modifying the connection cable,
• integrating additional electronic and mechanical components.

In such cases, the delivery schedule should allow for the full lead time required to prepare the solution.

Deliveries according to the agreed schedule

Products covered by a blanket order are delivered according to the agreed schedule. All deliveries should be completed by the specified final delivery date.

It is important to note that the dates stated in the order confirmation are estimates. They may change due to factors such as extended production lead times, limited component availability, or transport delays. If this happens, we inform the customer of the revised estimated delivery date.

What is a blanket order call-off?

A call-off is a customer’s request for products covered by a blanket order to be delivered earlier than scheduled. This option may be used, for example, when production is brought forward, additional demand arises, or component stock is depleted faster than expected.

For a request to be treated as a call-off, it should clearly identify the blanket order to which it relates. The customer should therefore provide the order number, product code or name, required quantity, preferred delivery date and delivery address if it differs from the one agreed previously.

Whether the call-off can be fulfilled as requested depends on product availability. If only part of the requested quantity is currently in stock, the delivery may be limited to the number of units available. If the customer has several open blanket orders, the call-off is fulfilled first against the earliest order. A single delivery may include products from several blanket orders.

What obligations are associated with a blanket order?

A blanket order is binding and covers a specified quantity of products that the customer undertakes to receive. Spreading deliveries over time does not reduce the total quantity ordered. It should therefore not be treated as a demand forecast that can be freely adjusted at a later stage. The order quantity should be determined using the most realistic available data on planned production volumes and component consumption.

Meeting the final date for taking delivery

The final date for taking delivery is specified in the terms of each individual order. How this date is determined may depend, among other factors, on whether the product is available from Unisystem’s stock or must first be sourced or manufactured.

Individual terms may be agreed during commercial negotiations and subsequently included in the quotation and order confirmation. These documents set out the specific terms applicable to the order. Before placing it, the customer should therefore carefully review the delivery schedule and the final date for receiving the entire quantity.

Responsibility for providing accurate information

Before placing an order, the customer should carefully check the product part number, specification and quantity. This is particularly important for components manufactured on the basis of technical documentation provided by the customer.

Under the GTCS, the customer is responsible for the accuracy of the technical information provided. It should therefore be thoroughly reviewed before the order is placed. Unisystem fulfils the order based on the specification received and does not carry out a full technical review of it each time.

Product verification before placing a larger order

If the product has not previously been used in the device concerned, it is advisable to begin by testing samples before ordering a larger quantity. This allows its optical, electrical, mechanical and functional performance to be assessed in the intended application. Once the tests have been completed successfully, the specific part number can be approved for use in series production.

Unisystem’s General Terms and Conditions of Sale also set out the rules applicable to orders placed without samples having been ordered beforehand. These rules apply to orders of at least 10 units. In such cases, the customer should carefully review the product description and technical specification. If the products supplied comply with the information available at the time the order was placed, the customer undertakes to receive the entire quantity ordered.

If the customer decides not to order and test samples beforehand, Unisystem may decline the order, particularly where it is not possible to determine whether the product will be suitable for the intended application without prior verification.

Sample testing is particularly important for customised solutions developed to meet the requirements of a specific project. Before a larger batch is produced, the final configuration must be confirmed and approved for series production.

Blanket orders – benefits, risks and limitations

A blanket order can simplify delivery planning and help secure component availability, but it also involves specific commitments. The table below summarises the main benefits, risks and limitations, taking into account the project stage, the nature of the component, the predictability of demand and the minimum order quantity (MOQ).

Area	Ben­e­fit	Risk or lim­i­ta­tion
De­liv­ery pre­dictabil­i­ty	Defin­ing de­mand in ad­vance makes it eas­i­er to plan pro­cure­ment and sub­se­quent pro­duc­tion runs.	A plan based on in­ac­cu­rate fore­casts may re­sult in com­po­nent short­ages or ex­cess stock.
Pro­duc­tion con­ti­nu­ity	Se­cur­ing a larg­er quan­ti­ty re­duces the risk of a key com­po­nent be­com­ing un­avail­able and caus­ing pro­duc­tion down­time.	A blan­ket order does not elim­i­nate every po­ten­tial delay, in­clud­ing those re­lat­ed to pro­duc­tion or trans­port.
Com­po­nent lead time	This arrange­ment is par­tic­u­lar­ly use­ful for prod­ucts with long or vari­able lead times.	If the com­po­nent is read­i­ly avail­able and can be re­ordered quick­ly, main­tain­ing a larg­er buffer may be less jus­ti­fied.
De­liv­ery sched­ule	The total quan­ti­ty can be di­vid­ed into sev­er­al de­liv­er­ies aligned with ex­pect­ed con­sump­tion and suc­ces­sive pro­duc­tion runs.	The cus­tomer is re­quired to re­ceive the en­tire quan­ti­ty or­dered by the agreed final de­liv­ery date.
Stor­age	Par­tial de­liv­er­ies re­duce the num­ber of com­po­nents that the cus­tomer needs to store at any one time.	De­layed col­lec­tion or re­ceipt of the prod­ucts may re­sult in ad­di­tion­al costs and lo­gis­ti­cal com­pli­ca­tions.
Con­fig­u­ra­tion sta­bil­i­ty	Or­der­ing a larg­er quan­ti­ty makes it eas­i­er to main­tain the same com­po­nent ver­sion, par­tic­u­lar­ly when using an al­ter­na­tive would re­quire de­sign changes or ad­di­tion­al test­ing.	Changes to the de­vice spec­i­fi­ca­tion or de­sign may leave the cus­tomer with un­used stock.
Cus­tom so­lu­tions	A blan­ket order helps se­cure the avail­abil­i­ty of a dis­play or mod­ule de­vel­oped to meet the re­quire­ments of a spe­cif­ic project.	The more close­ly a so­lu­tion is tai­lored to a sin­gle ap­pli­ca­tion, the fewer op­tions there are for using it if the project re­quire­ments change.
In­ven­to­ry fi­nanc­ing	Spread­ing de­liv­er­ies over time al­lows com­po­nent re­ceipt to be bet­ter aligned with the pace of pro­duc­tion.	A bind­ing order may tie up cap­i­tal in prod­ucts that will not be used until a later date.
Op­er­a­tional flex­i­bil­i­ty	If de­mand in­creas­es ear­li­er than ex­pect­ed, the cus­tomer can sub­mit a call-off re­quest.	Whether an ear­li­er de­liv­ery can be made de­pends on cur­rent prod­uct avail­abil­i­ty.
Project stage	This arrange­ment works well for sta­ble se­ries-pro­duc­tion projects in which pro­to­typ­ing has been com­plet­ed and com­po­nent con­sump­tion can be es­ti­mat­ed re­li­ably.	It is less suit­able dur­ing pro­to­typ­ing, be­fore test­ing has been com­plet­ed or while the me­chan­i­cal de­sign is still being fi­nalised.
Prod­uct ver­i­fi­ca­tion	Test­ing sam­ples in ad­vance al­lows the prod­uct to be ap­proved be­fore a larg­er quan­ti­ty is or­dered.	Plac­ing an order be­fore val­i­da­tion has been com­plet­ed in­creas­es the risk of se­lect­ing a com­po­nent that is un­suit­able for the in­tend­ed ap­pli­ca­tion.
Project life cycle	In a sta­ble, long-term project, a buffer can sup­port reg­u­lar pro­duc­tion over suc­ces­sive pe­ri­ods.	Un­cer­tain sales vol­umes, planned prod­uct changes or an un­pre­dictable project life­time in­crease the risk of being left with un­used stock.
MOQ and order quan­ti­ty	A blan­ket order can make it eas­i­er to meet the MOQ, mean­ing the min­i­mum num­ber of units re­quired for a sin­gle order, while al­low­ing the prod­ucts to be de­liv­ered over time.	If de­mand is low or ir­reg­u­lar, the MOQ may re­sult in a larg­er order than the project ac­tu­al­ly re­quires. Stan­dard or­ders for small­er batch­es must also com­ply with the ap­plic­a­ble min­i­mum quan­ti­ty.
Price	A larg­er order may pro­vide ac­cess to more favourable pric­ing and greater pre­dictabil­i­ty of pur­chas­ing costs.	If a price is agreed for the en­tire order, the cus­tomer re­mains bound by the agreed com­mer­cial terms even if the mar­ket price of the com­po­nent de­creas­es at a later date.

How to prepare a realistic delivery schedule

The delivery schedule should be based on actual component consumption rather than solely on a general sales forecast for the final product. The production plan can serve as a starting point, but potential variations and logistical constraints should also be taken into account.

Before agreeing the schedule, it is advisable to analyse:

• historical component consumption,
• planned production run sizes,
• current inventory levels,
• the minimum safety stock,
• the expected lead time for the next order,
• seasonal fluctuations in production and sales,
• available storage capacity,
• the optimal quantity for each delivery,
• the expected project lifetime,
• the risk of design changes.

A simplified demand calculation can provide a useful starting point:

The resulting estimate should then be reviewed against the component lead time, standard pack quantities, production schedule and any anticipated changes to the project.

Safety margin

Every delivery schedule should include a safety margin. Its size depends on factors such as the component lead time, demand variability and the acceptable level of risk.

When determining the buffer quantity, it is important to strike the right balance, as both underestimating and overestimating it may adversely affect the project:

• A buffer that is too small increases the risk of component shortages, which may delay or halt production. This can occur, for example, due to production shortfalls, a sudden increase in demand or transport delays.
• A buffer that is too large may tie up capital and leave the customer with unused stock, particularly if the project is modified, scaled back or completed earlier than expected.

To strike the right balance, it is advisable to consider several possible scenarios, including demand below, in line with and above the forecast. This makes it possible to assess how changes in the pace of production would affect the buffer quantity and delivery schedule. The schedule should then be regularly compared with the current production plan to identify discrepancies at an early stage and discuss possible adjustments with the supplier. However, changes to the production plan do not automatically alter the terms of a confirmed order. Any change to a delivery date or quantity must be agreed in advance.

Common mistakes when planning blanket orders

When planning a blanket order, it is important to consider not only its total quantity, but also the delivery schedule, the project stage and communication with the supplier. The following mistakes are among those most likely to cause problems during order fulfilment:

• Treating the order as a non-binding forecast – a blanket order covers a specified quantity of products. The option to receive them in batches does not allow the customer to cancel the outstanding quantity if actual production is lower than expected.
• Ordering too large a quantity – an excessive buffer may leave the customer with components that cannot be used before the project changes or production of the device ends. The order quantity should reflect realistic demand rather than the most optimistic sales forecast.
• Placing an order before validation – placing a large order before testing the product increases the risk that problems will only become apparent after production has begun. This is particularly relevant to solutions developed to meet individual requirements.
• Failing to account for the final delivery date – spreading deliveries over time does not mean that the products can be stored indefinitely. The schedule must allow the entire quantity to be received by the agreed final delivery date.
• Informing the supplier about changes too late – if the production plan is brought forward or postponed, the supplier should be notified as early as possible. A call-off request can be used to request an earlier delivery, but whether it can be fulfilled depends on product availability.
• Failing to clearly identify a call-off request – a message requesting an earlier delivery should clearly indicate the specific blanket order to which it relates. Otherwise, it may be treated as a new order.
• Failing to account for standard pack quantities – electronic components are often supplied in specified pack quantities. Individual delivery quantities should be aligned with them where possible to simplify logistics and reduce the need to split packs.

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A blanket order can make deliveries more predictable, but it is no substitute for sound planning. Its effectiveness depends on the accuracy of demand forecasts, the stability of the product specification and a well-prepared delivery schedule. This arrangement can be particularly useful for projects involving displays, touch panels and modules tailored to individual requirements, as it reduces reliance on last-minute purchases and makes it easier to coordinate deliveries with successive production runs.

Are you planning series production and looking to secure the availability of displays or other components? Contact our team. Based on the solution specification, expected demand and production plan, we will help you select the most suitable delivery model.