7/31/2009

SCM Metrics – I: Back Orders

Some organizations would not just want to use Dynamics GP for their Financial Reporting purposes. They would also want the Dynamics GP to meet their Operational Reporting needs. Among those Operational reporting needs is the most important chunk, Supply Chain Management (SCM). Dynamics GP offers several reporting features to accomplish these needs. One such feature is Smartlist. I’d discuss several SCM metrics in my upcoming posts and I’ll discuss about Back Orders in this post. 

Back orders: Back order can be defined as an unfulfilled customer order. Back orders are created when a SKU(s) whose current inventory level is insufficient to meet the demand. The more the back orders pile up over a period of time, be it in a manufacturing company or a Trading company, implicates that the company is not able to meet the demand on time with its current available inventory. Tracking backorders efficiently ensures an adequate supply of inventory in time equivalent to the current and future demand of the SKU. So, How should we be tracking it in Dynamics GP is the question.

1.Back orders can be tracked by each customer, division and Total company as a whole.
2. Aged Back orders that went past due the Requested Ship Date

This can be easily achieved in Dynamics GP using the Smart list Builder using Sales Transaction Work Table, adding a restriction to return only back orders as well a Calculated field to return days past due from the current date and Requested Ship Date.

If we need to track the back orders by each SKU, their QTY or value, the same smartlist can be built using Sales Transaction Amounts Work Table. I built two sample smartlists for the same that can be downloaded here.

Remember that the the way backorders are tracked vary from company to company. Some companies might just count items that are not confirmed and past the requested delivery date while some companies may also count those items with inventory confirmed, but past due.

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