Exploring Backorder Processing

The following short dialogue between Consultant Julia and Fulfillment Manager Efia introduces the concept of backorder processing (BOP). Through their exchange, the challenges of fluctuating supply conditions and the benefits of dynamic, rule-based order management are brought to light.

Backorder processing allows you to review and adjust confirmed quantities when the availability situation changes. For example:

• If a high-priority customer places a new order and stock is limited, the system can reallocate stock from lower-priority orders.
• If a production delay affects a material, the system can reconfirm or deconfirm existing orders based on rules you define - such as customer priority, requested delivery date, or order type.
• If new stock becomes available, the system can automatically confirm previously unconfirmed orders.

You can define rules and sorting criteria to control how the system redistributes available quantities - ensuring that the most critical demands are fulfilled first.

Backorder processing is a powerful tool used to manage confirmed orders in situations where supply conditions have changed after order creation.

• Availability Check

  During backorder processing, the system rechecks material availability for selected:

  • Sales orders
  • Stock transfer orders

  These are orders that were previously created and may have already received confirmations.

• Reprioritization & Reallocation

  Based on predefined rules and strategies, the system:

  • Reprioritizes existing requirements
  • Reallocates available stock accordingly

  This ensures that the most critical or high-priority orders are fulfilled first.

• Order Confirmations

  As a result of this process:

  • Orders that were previously confirmed may lose their confirmation
  • Other orders that were unconfirmed may now be confirmed

  This dynamic adjustment reflects the current supply situation and business priorities.

• Goal

  The main objective is to apply intelligent strategies to prioritize certain orders in a limited supply scenario - ensuring that the most important demands are met.

Backorder processing typically runs as a background job. The core task lies in the preparation phase, where you define which orders to include and determine the appropriate strategy for each.

Confirmation strategies determine how each requirement in a Backorder Processing (BOP) run is handled when material availability is limited. During a run, each requirement is assigned one of six predefined confirmation strategies based on system-defined criteria.

These strategies govern how available quantities are distributed according to the priority of each requirement. As a result, already confirmed demand quantities may be:

• Confirmed earlier or later,
• Confirmed only partially, or
• Not confirmed at all.

The assignment criteria are predefined in the system and ensure that the most critical requirements are prioritized appropriately during supply constraints.

The following strategies are available:

• Win

  Requirements are fully confirmed on the requested date (or immediately, if the requested material availability date is in the past).

• Gain

  Requirements retain their current confirmation or improve it, if possible.

• Improve

  Requirements try to retain, at least, their confirmation and if possible, improve. But could also lose their confirmation.

• Redistribute

  Requirements may receive a better, equal, or worse confirmation compared to their current one.

• Fill

  Requirements receive an equal or worse confirmation. They do not gain additional quantity or an earlier confirmation date.

• Loose

  Requirements lose their current confirmation and are not confirmed.

The most important work happens outside the system. You need to carefully analyze the different types of requirements you encounter and decide which strategy should be assigned to each one.

In the following short dialogue, order fulfillment manager Efia and consultant Julia introduce the concept of a segment in backorder processing.

The image below illustrates a possible outcome of segmentation. Later in the course, we’ll implement this example step by step.

Segments of sales orders and stock transfer orders are created with the goal of assigning each segment to a specific strategy. The example below shows what such a segmentation might look like:

Once you've defined your segments with the goal of assigning them to specific strategies, you can proceed to create them in the system.

Watch the following interactive demo to learn how to create backorder processing segments.

Watch the following interactive demo to learn how to create a sort sequence.

We’ve defined our segments, created a custom sort sequence, and assigned it to a segment. What we haven’t done yet is assign each segment to a strategy in the system. Let’s go ahead and do that now.

Watch the following interactive demo to learn how to create a backorder processing variant.

To ensure that backorder processing runs regularly and automatically, you can schedule it as a recurring job in the system.

Watch the following interactive demo to learn how to schedule a backorder processing job.

Watch the following interactive demo to learn how to display the results of a backorder processing run.