Dynamics 365 Supply Chain – Creating a Backorder Intentionally

Backorders often carry a negative connotation, conjuring images of delays and dissatisfied customers. However, when managed strategically, a backorder can present an opportunity to exceed customer expectations by providing timely solutions. In this post, we’ll explore a scenario where the goal is to deliver the main product to the customer as promptly as possible, even if an accessory or component is delayed. Offering this flexibility can greatly enhance customer satisfaction.

Let’s dive into how Dynamics 365 Supply Chain can help you manage this process efficiently, without the need for manual tracking.

Sales Order Creation

Start by creating a sales order as you normally would, using the released product code for the assembled kit or product. The deviation from the usual process begins if, during the assembly, you discover that a component or accessory is delayed. The key is to ensure that this delay does not impact the delivery of the main product to the customer.

During Production

To handle this, remove the delayed component or accessory from the production order pick list. Complete the production order to add the main product to your inventory. This step ensures that the missing component will not be issued from inventory, thus adjusting the actual cost of the assembled item or kit accordingly.

Updating the Sales Order

Before picking and packing the sales order, update it to include lines for the delayed component or accessory. If the customer agrees to receive the component later, you can set its unit price to $0.00. Adjust the expected ship/delivery dates on these lines to reflect when the component is anticipated to be available. Proceed to pick, pack, and ship the main product as a partial shipment against the sales order.

By adding the component or accessory as a separate sales order line, you effectively replace the demand originally included in the production order pick list. This addition serves as both a placeholder and a reminder to ship the item once it arrives.

Managing Open Lines

The sales order line for the delayed component or accessory will remain open, with an expected delivery date set to when it will be available. This ensures that the component stays part of the net requirements, maintaining its place in your supply chain workflow.

Conclusion

Effectively managing backorders in Dynamics 365 Supply Chain allows you to deliver the main product promptly while ensuring that any delayed components are tracked and delivered as soon as they are available. This approach not only enhances operational efficiency but also improves customer satisfaction by offering transparent and flexible delivery options.