Understanding Backorder Management

aACE can help you manage backorders when seasonal demands or unexpected surges leave your shipments short due to low inventory. First, you must set up backorder management. Then the system will watch for needed inventory replenishments and automatically create outgoing shipments to fill the waiting backorders.

How Backorder Automation Works

When an order is created, aACE compares the ordered number of inventoried items against the available number in inventory. If a shortage appears, aACE prompts you to mark the line item with a backorder flag. 

When you flag a shipment this way, aACE watches for replenishing inventory to come in. When your inventory levels change (e.g. from new purchases, product returns, or cancelled orders), aACE automatically updates that order. It allots the new inventory, clears the backorder flag, then generates new shipments for the remaining items to be picked and shipped. You can review these changes in the order's record log.

Example

The screenshot below shows that aACME Education Solutions has received an order for 30 copies of a textbook. However, the Invtry field shows that only 25 copies are currently in aACME's inventory. When the user enters 30 in the Quantity field, a dialog box displays, asking if the order should be split by availability:

At this prompt, the user can select:

  • No - aACE marks the Backorder (BO) flag for the entire line. None of the items will be shipped until the total quantity is available.
  • Yes - aACE splits the item into two lines on the same order – one for immediate fulfillment and one with the Backorder flag marked.

Splitting Shipments

Splitting the line item for immediate and backorder fulfillment provides several benefits. It allows the order to continue, it reduces the number of payments to be processed, and it makes it possible to easily apply product that has been returned to your inventory. 

Splitting line items is also affected by the option you select in the Delivery Type field: 

  • Ship Separately - Allows the partial fulfillment to be shipped immediately. 
  • Ship Together - Forces the order to wait for all items to be gathered.

Appending Shipments

When there are existing shipments for a client, aACE will add the new shipment info for backordered items to the existing shipment if:

  1. The existing shipment is in Pending status.
  2. The new shipment is linked to the same order as the existing shipment OR you have the preference set to append a customer's shipments from different orders. (This preference is found at Menu > System Admin > Preferences > Shipping > Append auto-generated items to pending shipments by location.)

Competing Orders and Fulfillment Priority

When an order is opened, aACE immediately updates the system-wide inventory count of the relevant line items. Tracking current demand this way ensures that subsequent orders for these line items can be identified as backorders. 

If two orders require the same inventory items, aACE's default setting will allot inventory to the order entered first. That order will be shipped out first, while the later order will be put on backorder. However, if an important customer makes the later order, you can manually set the fulfillment priority. This setting tells the system to first allot any available inventory to the priority customer. aACE will automatically update the regular orders, removing the allotted inventory and putting those orders into backorder.

If two important clients place orders with the same priority level, aACE again defaults to first in, first out scheduling.

Change an Order's Fulfillment Priority

On the order's detail view, click the Fulfillment section field for Ffmt Priority, then select a higher priority setting. (Note: According to your organization policies, you may also need to adjust the total cost.) 

Backorder Assistance

aACE provides several additional features to help you manage backorders:

  • To review all existing backorders, navigate to Order Management > Details > Order Items, then click the link in the lower-left for Find Back Ordered Items.
  • To review all backorders for a specific inventoried line item, navigate to that LIC's detail view, then click the Inventory section's Goto arrow for Demand.
  • If you have the inventory automation options configured for an inventoried LIC (detail view > Offices tab), aACE will automatically generate purchase orders to replenish your stock.

Backorder Automation Schedules

To view the current automation schedules, navigate to System Admin > Preferences > Automation Schedules > Schedule Setup tab. This scheduling engine helps aACE run smoothly for end users, while still accomplishing tasks on the time-frame best suited to your organization. (Read more about configuring automation schedules.) 

These two schedules determine when aACE automatically checks for and processes backorders:

  • 7792 - Primary Backorder Process - Generates backorder shipments.
  • 8050 - Secondary Backorder Process - Fulfills backorders from the Available balance.