2. The demand signal: planning

Purchasing materials based solely on static, optimistic sales forecasts can lead to two difficult outcomes: significant line-down shortages or excessive capital tied up in unused inventory. In modern electronics manufacturing, the supply chain must be driven by structured, validated Demand Signals rather than intuition.

This chapter outlines the mechanics of Material Requirements Planning (MRP) and Master Production Scheduling (MPS). By aligning customer forecasts, committed firm orders, and historical consumption data, we provide the procurement team with deterministic instructions: exactly what to buy, exactly when to buy it, and when to delay or cancel an order. We procure materials because the system data dictates it, avoiding “just in case” purchasing.

2.1 The planning hierarchy
Supply chain execution requires clear, aligned signals to function efficiently. When Sales, Production, and Engineering operate on different assumptions—such as conflicting forecasts, disparate schedu...
2.2 Lead time management
Lead time is not a static data point; it is a dynamic variable that defines the horizon of your physical supply chain. Treating Lead Time (LT) as a "set and forget" field in your ERP's Item Master can...
2.3 Shortage management: the “chase” process
A material shortage is an operational challenge that directly impacts factory utilization and revenue recognition. Shortage management requires a structured, proactive "War Room" approach: daily inter...
2.4 MRP parameter governance
Material Requirements Planning (MRP) is a deterministic engine. It calculates supply execution directly based on the variables configured in the Item Master. If the Minimum Order Quantity (MOQ) is ina...
2.5 A-part control tower: critical parts management
The Pareto Principle applies heavily to the electronics supply chain: a small percentage of components typically generates the majority of operational risk. Managing a high-value, single-sourced FPGA...
2.6 Schedule freeze Windows & change control
An optimized supply chain relies on stability. If the production schedule changes daily, or if Engineering modifies part numbers while procurement is actively managing the existing Bill of Materials (...