Understanding Backorders in techOMS [Information]

Understanding how backorders are processed is critical for warehouse managers and system administrators alike. techOMS supports two distinct backorder management modes: 

• Managed in WMS
  The Warehouse Management System (WMS) is assumed to have the most up-to-date inventory. techOMS allocates items based on the assumption of adequate stock in the WMS, without real-time verification. Negative inventory values are treated as zero when syncing with sales channels. This mode is ideal for environments where the WMS is the primary system for inventory tracking.
  
  

• Managed in techOMS
  When techOMS manages inventory directly, it calculates stock levels and handles order fulfillment based on its own data. This mode provides direct control over inventory levels and order fulfillment within techOMS.

The rest of this article will focus on how backorders are defined and processed when managed in techOMS.

DEFINITION

A backorder occurs when a line lacks sufficient inventory for fulfillment within an approved order. When this happens, the entire order is marked as containing a backordered line. 

NOTE: Please note that this definition:

• Includes lines that couldn't be allocated during a splitting shipment process, if a specific workflow is configured for it. To learn more about this feature, refer to How to Split Shipments Automatically [Guide] and Rules Conditions and Actions Guide [Information].
• Excludes orders in draft, fulfilling, short shipped, shipped, cancelled requested, and cancelled statuses.

This simple yet effective rule helps automate the order management process by highlighting items that require inventory replenishment.

INVENTORY TRIGGERS AND PROCESSING

When inventory is positively adjusted, techOMS re-evaluates backorders by performing the following steps based on FIFO (First In, First Out) methodology:

• For each backorder:

  • If the inventory becomes sufficient for all the order's items, techOMS automatically allocates them. 

  • If not, the order will remain as backordered until further inventory is received. 

NOTE: To illustrate how this works, consider an order with SKU A and SKU B on backorder. If the inventory for SKU A is positively adjusted, triggering the allocation process, but SKU B still lacks sufficient inventory, the entire order will be skipped. This is because both SKU A and SKU B need to be available for the order to be fulfilled.

Once backorders are processed, any remaining available inventory is adjusted and synced with the connected sales channels.

FINAL CONSIDERATIONS

As a result, the following summarizes the key backorder aspects: 

• Accurate Order Processing: Orders are only fulfilled based on FIFO when inventory is available. This reduces the risk of overselling.

• Streamlined Workflow: Prioritizing backorder processing over new shipments prevents order delays. 

• Improved Visibility: Backorders can be quickly identified for managing inventory shortages.