Capability / Fulfilment and customer logistics
Once a design is released the argument moves to cash and to risk. Holding stock at your line removes your carrying cost and puts it on ours; holding it at ours keeps the flexibility and the working capital with you. The six programmes below are the shapes that conversation usually takes, and each one names who owns the stock.
Fulfilment ledger
Every programme in the ledger is a stock question before it is a shipping question. The three lines that matter commercially are the trigger that releases material, who pays to hold it, and where the ownership sits on the balance sheet.
FP-01 / Kanban
The emptiest, cheapest programme to run once the loop size is right. Each bin covers roughly two weeks of consumption, the empty bin is the order, and replenishment is released inside 48 hours of the signal rather than on a forecast.
FP-02 / VMI
We hold the buffer and read the level, using your usage report rather than your purchase orders. Minimum and maximum levels are set from 13 weeks of actual consumption and reviewed quarterly against the forecast.
FP-03 / Consignment
Stock sits in your building and is invoiced only when it is drawn, which removes your inventory from the balance sheet entirely. The trade is a longer commitment on the quantity we hold and an agreed slow-moving exit.
FP-04 / Call-off
A six-month rolling forecast with a four-week frozen window, called off weekly. Material inside the frozen window is committed, so the price is stable and the lead time is short, at the cost of owning the material earlier.
FP-05 / Build to order
Material is bought against a released order, so nothing is held and nothing is at risk except work in progress. It is the right model for a low-volume, long-tail or high-value programme where the carrying cost is smaller than the write-off risk.
FP-06 / Turnkey
We own the BOM, buy the long-lead parts against the forecast and ship finished assemblies. The 3-6 week production lead time after material release is gated by component availability, not by line time, which is why long-lead parts are bought on forecast under this model.
How fulfilment is run
A bin size is set from the weekly consumption rate multiplied by the replenishment lead time plus a safety allowance, and then rounded up to a packaging multiple. On a 3-6 week production lead time that arithmetic normally lands on a two-week bin and a two-bin loop, which holds four weeks of cover in total. If the calculated loop exceeds eight weeks of consumption the model is wrong for that part, and the honest answer is a scheduled call-off or a bonded-store position instead of a kanban that will empty out.
Consignment and VMI move inventory off your books while we carry it, which is worth real money in the quarters where your cash is funding a ramp. The trade is commitment: consignment needs a defined minimum draw and an agreed exit for slow-moving stock, and VMI needs a usage feed we can trust rather than a monthly summary. Build-to-order carries no holding cost at all and is the model most first programmes should start on, because nothing is bought until the revision is frozen.
FOB Penang is the default quote because it separates the freight decision from the manufacturing decision. DDP is quoted whenever a buyer wants one landed number per unit, and that is increasingly the request now that the 800 US dollar de-minimis exemption has ended and every shipment attracts duty and an entry. Section 301 adds 25% on many China-origin goods, so the Penang and Shenzhen routes are priced side by side and the cheaper route is named in the quote rather than left to assumption.
Order parameters
Eleven parameters that decide how an order is placed, frozen, packed and paid for. Where a parameter has an optional position, the optional column is the one to ask about at award rather than after the first shipment.
| Parameter | Standard position | Optional position | Evidence or note |
|---|---|---|---|
| Minimum release | 1 panel on production | Zero MOQ on prototypes, so 1 board is an order | Stated on every quotation |
| NRE per order | $150-500 covering stencil, programming and profile | Waived on a repeat revision that reuses the stencil and program | Billed once per revision |
| Forecast horizon | 6 months rolling with a 4-week frozen window | 12 months where a part carries a 20-week lead time | Frozen window is what triggers material purchase |
| Change-order window | 14 days before material release | 7 days on a bonded-stock programme | Changes inside the window are quoted as a new release |
| Buffer stock agreement | None by default | VMI min-max or a bonded-store bin at the distributor | Level reviewed quarterly against reported consumption |
| Packaging specification | Anti-static bag inside a carton with edge protection | Moisture-barrier bag with desiccant and an indicator card | ANSI/ESD S20.20 for handling, J-STD-033 for MSL parts |
| MSL handling record | Floor-life clock logged per reel from the day the carrier is opened | Bake and re-seal before shipment on MSL 3 and above | Bake at 125 C for 24 hours, then re-sealed with desiccant |
| Incoterms offered | FOB Penang as the default quotation basis | EXW, CIF, DAP and DDP | DDP is the only option where the duty and entry sit with us |
| Freight mode | Express air for prototypes, 3-5 working days door to door | Air freight or sea LCL and FCL for production volumes | Sea is chosen for boxed builds where transit time is not critical |
| Documentation per shipment | Commercial invoice, packing list, certificate of conformance | Panel-linked traceability file, RoHS 3 and REACH declaration, test data | Traceability resolves to the serial number, not to the batch |
| Payment terms | 50% on order and 50% on shipment for a new programme | Net-30 after three completed orders | Terms are restated on every order acknowledgement |
Packaging and ESD
Eight checks are completed at packing. Each one exists because a board that leaves the building clean and dry can still arrive contaminated, discharged or cracked.
Assemblies carrying a moisture-sensitive part go into a barrier bag with desiccant, heat sealed or vacuum sealed. The floor-life clock is reset at the seal, so the recipient starts from a known point rather than from an unknown one.
A card with 10, 20, 30 and 40 percent spots is enclosed and read at packing, and the reading is recorded against the carton. A card that shows a change in transit is the earliest evidence that a bag failed.
Boards are bagged to ANSI/ESD S20.20 practice before they leave the ESD-controlled area, with the bag sealed rather than folded. The shielding bag protects against a discharge from the outside, not against one from the board.
Fine-pitch leads and connectors are supported in conductive foam or in a tray with pockets sized to the package, so a pin cannot take the load of the board above it. Loose boards in a carton are never acceptable.
Every board travels inside a conductive tote or an approved liner, and the tote is closed before it leaves the area. The liner is inspected for tears at packing, because a torn liner is electrically the same as no liner.
Double-wall corrugated with corner boards on any air-freight shipment, sized so the contents cannot shift. Void fill is used to stop movement rather than to fill space, and the carton is strapped rather than taped shut.
A sea container is a humidity chamber for the whole transit, so the barrier bag and desiccant are mandatory rather than optional and the carton is lined. Long sea legs also need the desiccant quantity calculated from the internal volume, not estimated.
Each carton carries the MSL label, the ESD warning label, the part number, the quantity and the serial list, with the indicator-card reading recorded. The packing list, certificate of conformance and traceability file are attached or sent ahead.
Macro record
The empty position is the order. A shelf photographed at the moment of a pull is the clearest evidence that a replenishment signal is physical rather than administrative.
Buyer questions
FOB Penang is the default on a first order because it is the least ambiguous: we clear the goods for export, you take the freight and the import entry, and neither side is guessing at the other's broker. EXW suits a buyer who already has a forwarder in Penang. CIF is chosen where you want us to arrange the sea leg. DAP is chosen where you want delivery to your dock without becoming the importer of record. DDP is chosen where you want a single landed number per unit, and it is the only one of the five where the duty and the customs entry sit with us.
Any assembly that carries a moisture-sensitive part goes into a moisture-barrier bag with desiccant and a humidity indicator card, sealed per J-STD-033, and the card is read and recorded at packing so the recipient can see what the bag experienced. For sea freight we treat the container as a humidity chamber: the barrier bag is mandatory rather than optional, and the carton is double wall with corner protection. Boards travel in ESD totes inside an anti-static bag to ANSI/ESD S20.20, and every carton carries the MSL label, the ESD warning label and the serial list.
The 800 US dollar per-shipment duty-free exemption is gone under Executive Order 14324, implemented at 90 FR 42418, and it was suspended for all countries rather than for one origin. A prototype shipment that used to clear without duty now attracts it, plus a formal or informal entry, so the fixed cost of a small shipment has risen more than the duty itself. Section 301 adds 25% on many China-origin lines. The practical response is to consolidate shipments, to quote FOB or DDP deliberately rather than by habit, and to compare the Penang and Shenzhen sourcing routes for the same line before the order is placed.
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