Blanket Release

A Blanket Release is the authorization to ship and/or produce against a blanket agreement or contract. Such agreements or contracts could contain any number of bills-of-lading, purchase orders, licenses and other documents.

A blanket release is also referred to as an ‘open to buy’. It will be used by a supplier in cases where the goods are not yet known but they want to open up their manufacturing facilities for customer business. The supplier may only commit to producing if it receives an order from the buyer against one of its own sales orders before it has manufactured them. If no sales orders come in, the manufacturer can carry out production work on its own products that would have been covered by the original contract. This arrangement works well when there is flexibility between buyers and suppliers about when deliveries must take place.

A blanket agreement is an agreement between an exporter and a foreign importer to sell goods over a particular period of time on the condition that the importer will provide letters of credit or other financial arrangements to buy goods. This gives the exporter security for his/her business until such time that one or more sales orders are placed by the buyer through their agent.

A blanket order is also called as open order, unconfirmed order and firm commitment. These orders are considered when suppliers do not have detailed information about requirements in advance but they want to be ready if the required quantities materialize after receiving tentative commitments from buyers at some point in time.

This type of letter is written by an exporter to another party whose name has been mentioned “Attn” with a request to confirm whether the party is willing to purchase a number of units as per an order. However, despite mentioning that the scope of work has been agreed upon between the two parties, there is no mention of shipping details and payment terms which may be a subject to change depending upon availability and finalization.

Related Links

Blanket Release Definition – Operations & Supply Chain Dictionary
Blanket order
Blanket Release – SCM Portal – Glosario de la Gestión de la Demanda y de la Cadena de Suministro –
B – The Logistics & Supply Chain Management Society