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Jevara Jackson

Ms. Thompson,

Backorders are often bad, but are not completely unavoidable. There are instances where a sole source is the only provider (goods and services). In such cases, the sole source provider may have limited resources to allocate. It is imperative for entities to develop strategic relationships with their sole source providers. In such relationships, the entity may be afforded privilege information such as pending stock outs. Other benefits for having strategic relationships are having reserved stock allocated and price reductions.

Providers have reduced capacity and revised processes in an attempt to manage reduced revenues. The result has yielded reduced availability of resources. As a supply chain manager, I am tasked with understanding not only my industry, but the industry of my providers’ providers. Having such understanding allows me to mitigate risks. However, all the planning, strategic alignment and communication do not prevent the occasional backorder scenario. Backorders are not friendly, they are just another business challenge that if properly managed can leverage into an opportunity.

Sonia E. Thompson

Thanks for your comment Ms. Jackson! You are right, from a business standpoint, it can be tricky to manage inventory and it is always good when you overcome that challenge in your business and turn it into an opportunity. From the customer's standpoint, that rarely does them any good. They only know that they can't get what they want at the time they want it. And that could have negative ramifications on the customer, especially those who don't have a good understanding of the complex nature of the supply chain. What would be a win win for both business and customers in a backorder situation, would be for the business to give the customer something for their trouble in an effort to make up for the inconvenience that they are experiencing as a result of the backorder. That way, if the backorder situation is something that is truly unavoidable, the company won't will at least be able to hold on to the customer in the meantime. It's all about the customer.

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