1/1/2024 0 Comments Autom back orders![]() ![]() The WMS tracks the levels of available inventory along the various points of the chain and manages flows, making exact predictions about pending orders, depleted SKUs, and low stock levels. To do this, modern installations use warehouse management systems, such as Easy WMS, which integrate with ERPs to coordinate all supply chain processes. This highlights the importance of digitalizing warehouse processes to prioritize orders based on urgency. The nature of the order and number of items pending dispatch will affect the time it takes for the customer to receive the product. The entire process must be streamlined and error-free with the aim of delivering the goods to end customers as soon as possible. However, backorders pose specific challenges in terms of inventory optimization by allowing the system to accept orders of unavailable stock, immediately requesting the item from the corresponding supplier. ![]() How to manage backordersĪ well-managed backorder strategy can constitute a huge competitive advantage. If not, the consequences could be dire for the company’s image. In either case, backorders must be managed efficiently so as not to disappoint customers. So, is it preferable to work with backorders or to avoid them? This should be decided after analyzing certain indicators, such as storage costs and lead times, which can be determined by a WMS. The key is to narrow down the maximum percentage of backorders the company can take on. This increasingly common practice works efficiently when the wait time between product purchases and deliveries is short, even if pending orders are frequent. On the flip side are companies that, due to their business policies, have established a specific percentage of backorders in order to minimize logistics costs and expand their catalogs. Nevertheless, this low level of backorders can also mean that you’re missing out on some sales opportunities. In the case of businesses that don’t generally work with pending orders, having just a few backorders spaced out every now and then is synonymous with a healthy supply chain. This reduces storage costs, and no sales are lost due to lack of stock. This last point is where backorders comes in, as companies can continue to market part of their catalogs without actually having the goods in their inventories. Continue marketing the product as if it were in stock, informing customers that delivery times may be longer than usual.Continue marketing the product and enable a “reserve” option so that the pending order is sent once the merchandise is available again.Stop selling the item until more stock arrives.This can occur due to an unexpected increase in interest in a certain product or to improper planning, in which case the goods have not arrived on time following the reorder point.Īgainst this backdrop, the vendor has various options: That is, product demand has exceeded supply, resulting in a dreaded stockout. There are times when you run out of stock of a product. ![]() We’ll explain the main pros and cons of this practice and explain how to manage pending orders to guarantee efficient logistics operations. In this post, we’ll take you on a deep dive into the concept of backorders. Otherwise, the brand’s image could become tarnished. All companies need to previously define the ideal percentage of backorders and not exceed it. But what are backorders? And how do you pull this off? Backorders are orders placed and processed despite the fact that the products requested aren’t in stock in the warehouse - but with the knowledge that your supplier will be able to respond quickly enough to ensure that the product reaches the customer by the established deadlineīackorder management is one of the main logistics challenges faced by warehouses nowadays, due to both its complexity and potential consequences. More and more, companies are using backorders to cut storage costs and, at the same time, boost their turnover. Backorders: the art of selling without stock. ![]()
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