If a company supports backorders, especially during times of high or unpredictable demand - such as during holiday shopping or pandemic panic-buying - its software should be able to tell the difference between backorders and stockouts and track each instance appropriately. The difference between backorders and stockouts matters most on the backend. Everything runs like normal in the foreground. If a company fulfills incomplete orders, pickers and packers will treat an order that includes a backordered product like any other. Products that can be backordered typically will live on shelves next to ones that can’t. However, this difference is not as clear for logistics specialists. In the event of a backorder, a product that is currently unavailable can still be ordered. The difference can be clear from a sales and customer perspective. The foundation of a good strategy involves understanding the difference between backorders and stockouts. Know the difference between backorders and stockouts To handle whatever inventory challenges the rest of 2021 brings, start planning now. If you’re starting the process of accepting backorders during the fourth quarter of the year, when your industry segment is experiencing a spike, or in the midst of a pandemic, you’re going to end up with sleepless nights, upset customers and uncertain revenue.
But building a backorder-friendly logistics strategy takes time. The key to backorder success is robust logistics support. However, if things go wrong, order cancellations can mount, along with growing payment processing fees and lost customers. When handled properly, a company earns upfront payment to keep its operations running and ensure demand for resupply. Contractor shall submit a quarterly report of all items that have been substituted.Unprecedented demand for a product can be a boon for any company - unless this demand pushes inventory into backorder territory. The substituted item shall be of equal functionality and quality and shall not exceed the contract price of the back ordered or unavailable item. Product Substitutions Product substitution is not allowable unless pre- approved in writing, by the State or Ordering Agency and only then may the item be shipped. If an item is discontinued, or unavailable, the Contractor shall call the Ordering Agency and given a choice of canceling the order, or a like-for-like alternate. If the Contractor’s system is unable to fill a line, the Contractor’s local purchasing group shall source the backordered item.
The Contractor shall then work to fill the backorder. Contractor’s online catalog/ punch-out provides in- stock/ backorder status. A backordered item(s) shall be annotated on the packing list that the Ordering Agency receives with the order and include the expected delivery date(s). In the event that a product is backordered, partial shipments or shipment is delayed for any reason, the Contractor shall notify the Ordering Agency of such delay in the following ways: A backordered item(s), item number (s), and expected delivery date(s) shall be annotated on the email order confirmation.
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