Turn a sales forecast into a component buying plan
Turn the sales forecast into a dated production plan, expand it through the approved BOM, and apply documented production allowances. Deduct usable, unallocated component stock and confirmed supplies available before production needs them. Buy the remaining shortage against agreed quantities and dates. Cambridge China Bridge can coordinate checks with factories in China.
Start with the quantity you need to make
Split the sales forecast by finished-product variant and required dispatch period. Deduct usable finished goods allocated to that demand, then account for production already scheduled to supply it. Avoid counting customer orders again if they are already included in the forecast. The result is the quantity still to manufacture, with a required completion date.
Record the forecast version, assumptions and buyer approval. Separate planning demand from authorised purchasing commitments; sharing a forecast should not silently authorise component buying. Use supplier forecast and call-off terms to agree what the factory may commit to.
Expand the approved bill of materials
For each product variant, multiply its planned production quantity by the component usage in the approved bill of materials, or BOM. Record the component identifier, specification revision and unit of measure. Convert purchase packs, lengths or weights into the same unit before calculating shortages. Combine shared components only where their specifications and revisions are interchangeable.
Expand subassemblies through their own BOM where you are buying their constituent parts. First deduct usable subassemblies and confirmed subassembly receipts allocated to the plan, so their components are not bought again. Keep alternative parts separate until approved; see factory material and component substitutions.
Document allowances before netting off supply
Ask production to document allowances for component scrap, process loss, setup consumption, destructive testing and replacement parts. Name the affected component or operation, calculation basis, supporting production records and approver. Distinguish extra material consumption from losses of finished output: they affect the calculation differently.
If an allowance is an addition to normal consumption, add the approved extra quantity. If it describes usable output from input, work backwards from the required good output using the documented yield. Check whether the BOM or production quantity already includes that loss. Keep any approved buffer separate, and flag an unknown allowance for approval rather than inventing it.
Calculate shortages by the date of use
For each component and production period, start with BOM demand including approved allowances. Add any separately approved closing buffer, then subtract usable opening stock and confirmed incoming quantities available before use. A surplus means no additional purchase for that period. Carry the projected closing balance into the next period; do not deduct the same stock or receipt again.
Exclude rejected, quarantined, obsolete and already allocated stock. For stock held at a Chinese factory, obtain a dated count showing location, ownership, condition and reservations. For incoming supplies, record the outstanding quantity, matching revision, supplier confirmation and expected usable date, allowing for transport and receiving checks. Flag late or uncertain receipts as shortages at risk.
| Planning field | What to record |
|---|---|
| Demand | Product plan, BOM revision, normal usage and approved allowances |
| Available supply | Usable opening stock and confirmed receipts available before use |
| Net shortage | Uncovered requirement after supply and any approved buffer |
| Purchase proposal | Order quantity, rounding surplus, usable arrival date and release date |
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Turn shortages into controlled purchase releases
Keep the calculated shortage separate from the proposed order quantity. Ask suppliers to confirm pack multiples, MOQ, capacity and delivery dates; show any rounding surplus and obtain approval for it. Work backwards from the component's date of use through receiving checks, transport and supplier production to set the purchase release date. Use MOQs and sampling for supplier quantity discussions.
Send the factory the approved component schedule with quantities, revisions, delivery location and required usable dates. Ask it to flag bottlenecks and purchases needing approval. Cambridge China Bridge's staff in China can coordinate factory stock and supply checks. Keep acceptance arrangements alongside the plan using making bulk production match the sample, and recalculate when demand, receipts, stock or revisions change.
Frequently asked questions
Can I buy components directly from my sales forecast?
First turn sales demand into the quantity still to manufacture, allowing for usable finished goods and scheduled production. Then apply the approved BOM and documented allowances.
Should I deduct all component stock at the factory?
Deduct only stock confirmed as usable, the correct revision and available to your plan. Exclude rejected, quarantined, obsolete or reserved quantities, and confirm ownership and location.
How much extra should I buy for production waste?
Use a documented allowance approved for the component or process. Check its calculation basis and whether it is already included in the BOM or production plan. Flag missing evidence for approval.
Does an incoming order reduce my purchase requirement?
Only count its outstanding confirmed quantity if the matching component will be usable before production needs it. A later arrival cannot cover an earlier shortage.