In a customer's delivery schedule, only the firm part and the authorisations are a commitment
7 November 2026, 08:13
On 2 November Stellantis announced that a shortage of an electronic component for the engine control unit is significantly disrupting production of some Fiat models in Italy, and that the problem could last throughout November and December. The lines at risk of stopping are Pomigliano d'Arco, where the Pandina is built, and Mirafiori, where the 500 is made.
For businesses supplying an assembly line that stops, the question comes at once: who pays for the parts already produced and the materials already bought for that carmaker? The answer lies in a document the supplier receives every week, the delivery schedule, and in what the contract says about each of its parts.
The delivery schedule mixes commitments and forecasts
In continuous supply relationships, such as those in the car industry, the customer does not send an order for every shipment. It signs a framework contract, with prices and terms, and then sends at regular intervals the list of quantities it expects to take in the coming weeks and months.
Those figures do not all carry the same weight. The quantities for the first weeks form the firm part: actual delivery requests, with a date and a number of parts, which the customer undertakes to take. The rest is a forecast, useful to the supplier for its own planning, which the customer can change in the next release without owing anything.
Between the firm part and the forecast, many schedules contain a third part, less well known: authorisations. The German VDA 4905 standard, used by a number of European carmakers to send their schedules, has two dedicated fields: one for the production authorisation, the other for the authorisation to buy materials. With the first, the customer allows the parts to be manufactured up to a certain number; with the second, raw materials and components to be bought for a larger volume. Within those limits, if the schedule is later cut, the risk as a rule stays with the customer, who pays for what it had authorised and no longer takes. Beyond those limits, the risk lies entirely with the supplier.
The typical mistake is buying and producing on the forecast
When an electronic component arrives many months after the order, those who work for a carmaker tend to buy it on the forecast, because running out can cost them the contract. If that quantity exceeds the material authorisation, however, the goods were bought at the supplier's own risk. When the customer's line stops for a few weeks, those goods stay on the shelves and tie up money already paid or still to be paid; if the schedule is cut for good, or the model goes out of production, nobody is obliged to take them.
The same happens to finished parts. To keep machines fully loaded, or to run longer batches, companies sometimes produce beyond what the firm part and the production authorisation cover. As long as the carmaker keeps consuming, the advance goes unnoticed; when it stops, it becomes stock that nobody else can buy, because the part is made to its drawing.
What to look at in the company, and who does it
The first check falls to whoever manages the contract, usually the sales manager together with the accounts department: in the customer's general purchasing terms and in the framework contract they look for how many weeks the firm part covers, whether authorisations exist and how they are calculated, and who pays for materials and parts left within those limits when the schedule falls. If there are no authorisations, everything bought beyond the firm part is a risk for the supplier, and the clause can be requested at renewal.
The second falls to whoever plans production, together with purchasing: item by item, the delivery lead time for materials is set beside the length of the material authorisation. Where the first is longer, every order for those materials is a risk the business takes on, and the decision should rest with management.
The third is measuring how much is at risk. Items made to the customer's drawing have dedicated codes: in the management software the stock of those items and of the materials in their bills of materials is extracted, and the part covered by commitments and authorisations is deducted. The value left is what the business would have to write down if that carmaker cut its schedules for good, a figure that controlling can update periodically for the main customers.
When a stoppage is announced, two things are done at once: purchasing asks suppliers to postpone deliveries of materials that exceed the material authorisation, and the sales manager asks the customer for written confirmation of the quantities authorised up to that day.
A delivery schedule says what the customer expects to buy; only the firm part and the authorisations say what it has committed to pay for.
This article was prompted by a news item published in Reuters on 2 November 2026.