3.2 Process Materials Procurement & Replenishment

A manufacturing line consumes solder paste, flux, and cleaning chemistry just as it consumes electricity. These are not "incidentals"; they are critical dependencies. Running out of a $50 jar of solder paste triggers the exact same Line Down event as missing a $500 FPGA. The difference is that process materials have a "death clock" (shelf life). Procurement must balance the risk of stockout against the certainty of expiration.

The Replenishment Architecture

Do not treat all consumables equally. Segment the strategy based on shelf-life sensitivity and usage velocity.

Strategy A: ERP Min-Max (For Perishables & Criticals)

• Scope: Solder Paste, Flux, Adhesives, Solder Bar.
• Mechanism: Manage strictly within the ERP. Inventory is decremented via backflush or issuance to the floor.
• Logic:
  • Min (Reorder Point): (Daily Usage × Lead Time) + Safety Buffer (5 Days)
  • Max (Cap): (Daily Usage × Shelf Life) × 0.8
  • Constraint: Never set a Max level that exceeds 80% of the shelf life window. You will scrap the excess.

Strategy B: Visual Kanban / 2-Bin (For Shop Floor Consumables)

• Scope: SMT Wipes, Gloves, IPA, Stencil Rolls.
• Mechanism: Physical visual trigger. No ERP transaction for every roll of tape.
• Logic:
  • Two bins on the floor. When Bin 1 is empty, the "Kanban Card" is sent to the Buyer. Production consumes Bin 2 while replenishment arrives.
  • Buy Signal: Receipt of physical card or scan of barcode.

Handling Constraints: The Expiry Trap

The primary failure mode in chemical procurement is buying for price rather than freshness.

If MOQ > Consumption within Shelf Life:

• Then Do not buy the standard MOQ.
• Action: Negotiate a "Scheduled Release" order.
  • Tactics: PO for 100 units (Annual Vol). Vendor ships 10 units/month.
  • Why: Vendor holds the stock (or manufactures fresh); you receive maximum shelf life upon dock receipt.

If Material = Cold Chain (Refrigerated):

• Then Enforce strict shipping logistics on the PO.
  • Ship Method: Overnight / Next Day Air ONLY.
  • Ship Days: Mon – Thu only. (Fri shipments sit in a warm warehouse over the weekend).
  • Packaging: Insulated box with cold packs required.

Buying Cadence: The "Milk Run"

Ad-hoc buying creates chaos. Do not cut POs for solder paste every Tuesday and Thursday. Establish a standard rhythm to minimize freight and administrative overhead.

The Consolidated PO Cycle:

1. Review Day: Every Tuesday @ 10:00.
2. Action: Review all Min-Max levels and Kanban cards collected.
3. Execution: Place consolidated orders by vendor.
4. Result: Fewer shipments, lower freight density, predictable receiving workload.

Pro-Tip: Set the "Safety Stock" for solder paste to exactly 2 jars. If the fridge fails or a jar is dropped, you need immediate backup, not a calculation.

Replenishment Policy Matrix

Map every material class to a specific logic to automate decision-making.

Performance Targets (KPIs)

Measure the health of the replenishment system using these three metrics.

1. Stockout Incidents:
   • Target: 0 per Quarter.
   • Reality: A stockout on consumables is an inexcusable planning failure.
2. Expiry Write-Offs:
   • Target: < 5% of Total Spend.
   • Logic: If you are scrapping >5%, your "Max" levels are too high or your MOQs are not managed.
3. Rush Freight Ratio:
   • Target: < 1% of Shipments.
   • Logic: Relying on overnight shipping for standard wipes indicates a broken reorder point.

Final Checklist