Backorders can be costly for quite a few reasons. Customers in a web-connected economy demand satisfaction now rather than later, so those customers who are required to wait a week or two for your product to even ship may go somewhere else, costing you potential profits. Secondly, you’ll likely need to pay some staff members overtime to complete the projects in a timely fashion, increasing labor costs. Finally, it costs a great deal of reputation, as your business doesn’t look prepared for the future.
Luckily there are several simple solutions to the backorder problem that can be managed through a proper enterprise resource planning software suite.
Your ERP system should work for you, and work for you ahead of time. Ensuring that you have a system that can automatically order for you and keep on schedule is of the utmost importance if you’re trying to run an operation that is going to excel in the market.
Auto-scheduling eliminates human error from the equation, allowing the system to essentially order for you, rather than requiring someone to keep track of what needs to be ordered on which days. Human error can be costly, leading to duplicate orders, missing orders, and inventory problems, whether surplus or lacking.
Not only does auto-scheduling help your business have enough products to manufacture quickly, it also helps your business reduce inventory costs by reducing redundant orders.
Reassign Order Points
Along with regular orders, your business needs an inventory point at which to order more materials for the items you’re manufacturing. This order point acts essentially as a failsafe, keeping your materials stocked so your manufacturing operation can move forward with no interruption.
Unfortunately, some businesses misstep when it comes to their assigned order points.
If you find yourself frequently running low on products during busy seasons, then you may find it helpful to reassign the order points in your ERP system. This will keep your inventory stocked and ready to go during the busiest of times.
Stock Up on a Few of the Bestselling Items
If all goes well in your business, your bestselling items will kick off a mad dash of people coming to you for that same item. If you’re planning ahead properly, you’ll want to stock up on a few of those products before that occurs so that you can quickly adapt to any increase in sales.
At the same time, if your business is steady, you’ll still want to have a few more ready to go just in case of emergency. You don’t want to be caught off guard in the event of a power outage or a storm that prevents your staff from coming to work for a day.
Always keep a good amount of your best-known items on hand just in case of emergency or in case your business starts booming.
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