Backorder
What is a backorder?
A backorder is an order line (or part of one) that could not be filled because the stock was not there, and is now waiting to be filled when it arrives. The order exists, the demand is recorded, and the shipment will happen later. It becomes expensive when the customer learns about it late or not at all.
What creates backorders
- Reorder points set below real demand, so replenishment always arrives a step behind.
- Stock that exists but is not where picking needs it (miscounted, misput, reserved for someone else).
- Supplier lead times that moved and were never re-planned.
- Allocation: the stock exists and is divided among customers by a rule nobody agreed on.
Handling them well
Split the shipment when it makes sense (send what is here, complete later), give the customer a real date rather than a hope, and track why each backorder happened so the pattern shows up in the replenishment rules. A backorder rate that never moves is a conversation about inventory policy, not about the warehouse's effort.