Reduce Risk with Blanket Purchase Orders

A blanket purchase order can help manufacturers keep operations lean and running smoothly by ensuring part availability and stable prices in an otherwise unstable environment.  

What is a blanket purchase order?

A blanket purchase order (BPO) is a purchase order for a fixed amount over a specific period of time. Generally, buyers obtain approval for a blanket amount and continue using that purchase order until the amount is depleted or through the end of the blanket purchase agreement’s timeframe.

What is the difference between a regular purchase order and a blanket purchase order?

The primary difference between a regular purchase order and a blanket purchase order is that a regular PO is for single orders. A blanket PO may be used in anticipation of recurring orders over a longer period of time with a start and end date.

When is a blanket purchase order used?

Blanket Purchase Orders, which can also be referred to as Standing Orders, are used when the same goods are needed on a recurring basis, typically over a specified period.

What are the benefits of using blanket purchase orders?

A proactive supply chain strategy that mitigates the risk of increasing prices and shortages is the use of blanket purchase orders. Blanket POs allow the buyer to keep stable unit prices for the length of the contract.

“There will be no getting these components from another source or crossing them to another manufacturer. The global supply challenges are impacting everyone and the sooner people plan accordingly the more likely they will be to have what they need when they need it,” says Phil Marchese, COO of Automation Distribution.

• Capitalize on current prices
• Reduce lead time and ensure supply when it's needed most
• Reduce stocking requirements
• Eliminate repetitive efforts by streamlining the ordering process
• Pay on an as-needed basis
• Head off unexpected discontinuations and manufacturing closures

If you order the same parts repeatedly and want inventory available to you when you need it at a consistent price, a blanket purchase order is right for you. Contact us today at 215-997-5595 or email us to set up your account.