Join the Exchange
Share your tips and learn from fellow direct marketers as we cover the hottest issues and best practices in fulfillment and operations.
How can I reduce backorders?
The simplest way to reduce your backorders is to increase your inventory level! However, we all know that is not necessarily in the best interest of the company from a use of cash and overall risk perspective. We have had some great success in the past year with lowering our backorders. The key element of success is to know your timelines and key information hand-off dates between functional areas. We instituted a rigorous timeline for product selection and new item sourcing that was built off the supplier lead times and press dates. We rely on a forecasting system that utilizes hundreds of algorithms to predict future demand. For new items, we are able to place back-up purchase orders that are cancelable by a certain time if the order is not needed with most suppliers. In addition, we try to give our suppliers forecasts for our holiday season. We do not guarantee these forecasts, but it does help ensure the stock is available when those items take off.
—Dana S. Gilman, vice president, planning and control, Miles Kimball Company
Communicate! Share information about projected SKU forecasts with your distribution center(s) in advance of the "crunch time." This allows them to do better bin profiling (a best practice no matter what time of year).
—George J. Mollo, Jr., GJM Associates Inc.
Have a plan. You should have an idea of what is likely to move quickly. At the moment of original purchase, negotiate lead times and shipping methods for panic-based rebuying. Ship by air, rather than by container. Negotiate bulk prices for small re-orders. Collect all necessary vendor contact information and record it in a central location. If possible, find a back-up supplier willing to ship smaller quantities. the important key here is to do all this in advance of a predictable crisis.