Hold stock when the order is saved
Trouble with short stock usually starts before the stock runs out: two salespeople promise the same 50 cartons to two customers. Holding stock against each order as it is saved stops that. What is held is no longer free to promise, so the next order sees the truth.
The figure to promise from is what is on hand less what is already held, not what sits on the shelf.
TipWhen a customer asks whether you can deliver tomorrow, answer from stock not yet held, never from the shelf count.
Decide who gets scarce stock
When stock is short, someone waits. Decide the rule before the shortage, not during it, or it becomes whichever customer shouts loudest. The simplest fair rule is first ordered, first served: when stock comes in it goes to the oldest waiting order.
Some distributors protect a few key accounts, but every exception should be a decision someone owns, made openly, not a favour done on the phone.
TipCall the customer at the back of the queue first; they are the one who will be let down.
Ship what you have, or wait for the rest
Partial shipping keeps shops stocked, but every extra shipment costs a delivery. Ask each customer once, when the account is opened, whether they accept part shipments, and keep the answer on file. A shop that sells the item every day wants 80 cartons today; a buyer fitting out a new branch may want everything at once.
Weigh the margin you keep by shipping now against the cost of the second trip.
- Ship in part when the customer sells the item every day
- Ship in part when the rest is days away, not hours
- Ship in part when the order can carry a second delivery
- Wait when the customer needs the whole order together
- Wait when the rest arrives in time for the next route
Invoice only what left the warehouse
Invoice what was shipped, not what was ordered. A customer billed for 120 cartons who received 80 will hold the whole payment until the difference is sorted out, and your collection slows for a reason that is entirely yours.
Draw each invoice from the goods that actually went, so the bill and the delivery note always agree. Each later shipment gets its own invoice, and the order stays open until everything that went out has been billed.
TipNever close an order while delivered goods are still unbilled; that is margin given away by forgetting.
Keep the customer told
A backorder the customer does not know about is a broken promise. Tell them, at the time of shipping, what is on its way, what is still waiting and roughly when it will come. Base the date on the vendor’s confirmed delivery, not on hope.
Ask whether they still want the rest. A customer who has bought it elsewhere should have the remaining quantity cancelled, so the stock goes to the next order in line instead of sitting held for a sale that will never happen.
- Confirm what was shipped and what is still waiting
- Give an expected date from the purchase order
- Ask whether the rest is still wanted
- Cancel what is no longer wanted
- Ship the rest as soon as stock is in
Fix the shortage, not just the order
Review backorders every week by item. An item that is always waiting is a buying problem: an order point set too low, a lead time longer than you assumed, or a vendor who often ships short. Fix that, and the backorders stop.
Watch how long lines wait and how often customers cancel what is left. Every cancelled backorder is a sale that went to a competitor, and a customer who has learned to buy that item somewhere else.
TipRaise the purchase order for a backordered item the day the backorder appears, not at the next weekly buying round.
Checklist: Before stock runs short again
- Hold stock against each order as it is saved
- Promise from stock not yet held, not from the shelf
- Agree a fair rule for who gets scarce stock
- Ask each customer whether part shipments are fine
- Invoice only what was shipped
- Tell the customer what is still waiting
- Cancel backorders the customer no longer wants
- Review items that are often on backorder