A backorder is automatically created by Certinia SCM when an order cannot be processed immediately because there is not enough inventory available to fulfill it.
Backorder Creation
A backorder is created automatically in the following situations:
- A sales order is approved and cannot be fulfilled because there is no inventory available for one or more items on the sales order.
- A production order is approved and cannot be fulfilled because there is no inventory available for one or more items on the associated manufactured kit bill of material BOM
Bill of Material. The items that make up a product. For example, if the product is a table, this might include the table top, four legs and a bag of screws..
All backorders are added to a backorder queue. When inventory becomes available the backorders are resolved in the queue order.
The Backorder Process
The backorder process ensures sales and production orders are fulfilled in an appropriate order as inventory becomes available. The backorder process is automatic and starts whenever a new IP Inventory Position. An inventory position is one or more inventory items stored at a particular inventory location, for example a on shelf on a rack in a particular row in a warehouse. A warehouse may contain inventory items at the same location as other IPs. The IP record can be viewed on the Item Master page. is created that can resolve any existing backorders.
When an IP is created, the system first checks to see if that IP can be used to resolve any backorders. If backorders can be resolved, then the backorder process initiates and pre-determined settings establish the order in which the backorders are resolved.
Processing Order
The criteria that influence the order in which backorders are processed are:
- Fill order
- Required date
- Created date
Fill Order
When more than one backorder is waiting for the same item, you can assign each backorder a fill order. The fill order is used to establish the order of fulfillment when an IP for that item is created. The default fill order is 9,999. The default fill order ensures a new backorder isn't prioritized over existing backorders. The fill order can be changed in the Backorder Edit page. If more than one backorder has the same fill order value designated, then the backorders are prioritized by their required date.
Required Date
The required date is used to prioritize backorders waiting for the same item when their fill order values are identical. The required date is derived from the current promise date on a sales order. If more than one backorder has the same required date, the backorders are prioritized by their created date.
Created Date
The created date is derived from the Sales Order Date field on the New Sales order page. The created date is not editable.
Custom Settings
The following custom settings modify the behaviour of the backorder process:
| Custom Setting | Description |
|---|---|
| Prioritize Sales Production Backorders | If selected, and a purchase order that was created from a sales order line or production order line is received, SCM fills backorders associated with those lines. If the inventory position has been created by a production order and this production order is related to a sales order line, this inventory position resolves the backorder related to this sales order line. When this custom setting is deselected, backorders are filled by their fill order and required date. |
| Resolve Backorders Post Reverse Allocate | If selected, the SCM resolves backorders automatically whenever items are made available after a reverse allocate. A reverse allocate undoes the allocation of items that were previously allocated to a sales order or a production order. |
| Partial Shipments | Indicates whether your organization allows partial shipments. If partial shipments are allowed, then any backorders that can be resolved with a partial shipment are included in the backorder queue. Deselect this custom setting checkbox if you prefer to hold sales orders until you have all items available for shipment. |
| Partial Shipments | Indicates whether your organization allows partial shipments. If partial shipments are allowed, inventory that becomes available is used to resolve backorders line by line. The resolved backorder line items can then be shipped immediately to the customer rather than shipping them once all the backorder lines related to the sales order are resolved. |
The following custom settings modify the behaviour of the backorder process:
- Prioritize Sales Production Backorders - If selected, and a purchase order that was created from a sales order line or production order line is received, backorders associated with those lines are filled. If the inventory position has been created by a production order and this production order is related to a sales order line, this inventory position will resolve the backorder related to this sales order line. When this custom setting is cleared, backorders are filled by Fill Order and Required Date.
- Resolve Backorders Post Reverse Allocate - When checked, the system will attempt to resolve backorders automatically whenever items are made available after a Reverse Allocate.
When the Prioritize Sales Production Backorders custom setting is selected, the relationships between objects are as follows:
- Sales order lines
- When a backorder is resolved from a production order, the production order contains a lookup to the sales order line.
- When a backorder is resolved from a purchase order, the purchase order contains a lookup to the sales order line.
- Production order lines
- When a backorder is resolved from a purchase order, the purchase order contains a lookup to the production order line.
Filtering
To maintain system performance, the backorders are filtered.
Backorders are removed from the list that don't satisfy the following criteria:
- Item Master:
- If the backorder is related to a sales order line, the line must have the same item master as the IP.
- If the backorder is related to a production order line, the line must have the same item master as the IP.
- Condition Code:
- If the backorder is related to a sales order line, the line must have the same condition code as the IP.
- If the backorder is related to a production order line, the line must have the same condition code as the IP.
- If the backorder doesn't share the same ownership code as the IP.
- If the backorder doesn't have the same warehouse specified as the IP.
- If the backorder is only related to a production order line that makes up part of a configurable manufactured kit.
Backorders for manufactured kits will be included in the backorder list provided they:
- Share their related sales order line with the production order line.
- The production line is also related to the new IP.
Priority Weighting
A weighting is automatically applied by the Certinia SCM to the backorders after they've been filtered to ensure the highest priority backorder types are processed first. A weight is assigned to each backorder according to the backorder type as follows:
- Partial Shipments - 1
- Production Backorders - 0.25
- Single Lot Fulfillment - 4
Resolving Backorders
When inventory is logged as received in SCM on a purchase order receipt, outstanding back orders are fulfilled depending on the configuration options your administrator has selected.
When an inventory position is received from a purchase order, the SCM fills sales order line or a production order lines associated with that purchase order.
If the inventory position has been created by a production order and this production order is related to a sales order line, this inventory position will resolve the backorder related to this sales order line.
If a sales order line doesn't have an associated backorder, for instance if it has already been allocated and the production order is completed, the inventory created is used to resolve any outstanding backorders.
Running the Backorder Process Manually
The Run Backorder Process button enables you to initiate the backorder process from the Backorders page. This button can be used to resolve sales and production order backorders. The button is not on the backorder layout by default and is independent of the Resolve Backorders Post Reverse Allocate custom setting.
If the Resolve Backorders Post Reverse Allocate custom setting is deselected, backorders can be resolved manually. If you want to allocate items that have become available from the reverse allocation of a sales order, you can manually start the backorder process using the Run Backorder Process button. When this process is running, no other backorder process can be started until the process is complete.
Inventory positions created after the backorder process has started are added to the backorder queue. When a running backorder process completes, SCM checks the backorder queue for any additional inventory positions. Inventory positions that can be used to resolve outstanding backorders and runs the backorder process again as required.