Let’s say you order a birthday gift for a loved one. Yet shipping delays occur, and the present doesn’t arrive until after the birthday has already passed—leaving you (and your loved one) disappointed.
Does that sound familiar? Not only has something like this likely happened to you, more times than not it’s happened to your target ecommerce customers. And these experiences have shifted their loyalties to companies that can provide more reliable shipping options.
With greater consumer demands placed on your fulfillment capabilities, it’s crucial for your company to properly manage any supply chain backlog to maintain satisfied, loyal customers.
Defining a Supply Chain Backlog: The Good and The Bad
When you think of a “backlog,” it’s often in a negative context. Yet a supply chain backlog can actually be a good thing for your business! With a supply chain backlog, you have an active list of orders waiting to be fulfilled—and customers consistently ordering your products. When your business manages its supply chain backlog well, you can keep up with demand and deliver your orders on schedule.
Yet when your supply chain backlog is mismanaged, you end up with backorders on your hands. With backorders, you can’t fulfill your orders on time. If orders don’t arrive when promised, your customers get frustrated and may even cancel their purchases. Not only do you lose money in this situation, your company’s reputation takes a hit. And with higher customer expectations than ever, this is risky to your brand. Customers don’t want to support organizations that regularly ship later than planned, so they’ll likely switch to one of your competitors.
Four Tips for Successfully Managing Your Supply Chain Backlog
A supply chain backlog is inevitable when you have inventory and a steady stream of customers placing orders. So what can you do to manage it well and keep it from negatively impacting your business? Here are four tips we’d recommend to get started:
1. Utilize an Inventory Management System
To stay on top of your supply chain backlog, you need access to real-time inventory data at all times. To do this well, you need to implement a reliable inventory management system into your supply chain.
Inventory management technology can help you understand what products are selling and how quickly they’re getting into the hands of your customers. As a result, you can maintain better control and higher accuracy over your inventory, enabling you to prevent supply chain backorders.
2. Plan for the Unexpected
Take a look at the past few years. A global pandemic, material shortages, and a lack of workers have disrupted supply chains all over the world. Unforeseen events can occur anytime, negatively affecting your company’s supply chain. Yet your customers still expect you to keep up with their demands.
That’s why it’s essential to develop a contingency plan to acquire and manage your inventory when the unexpected happens. Whether it’s additional demand or dealing with excess inventory, having a concrete plan can help you steadily manage your supply chain backlog and maintain revenue goals.
3. Diversify Your Suppliers
If you depend solely on one primary supplier, you’re leaving yourself vulnerable to shipping delays and backorders. Just think about it: if your supplier faces disruptions of any kind, your own supply chain will also be impacted. It’s a painful domino effect.
Developing a diverse portfolio of suppliers will help you pivot quickly to the next available supplier. Supplier diversity reduces risk and helps ensure your supply chain backlog doesn’t get out of hand. And, with more supplier relationships, you’ll have the flexibility and leverage to potentially shift to a better, more affordable supplier in the long run.
4. Partner with a 3PL
Of all the tips listed, this may be the most important one. While properly managing your supply chain backlog is crucial to your company’s success, you may not have the bandwidth to do it yourself. When you partner with a third-party logistics provider, or 3PL, you’re not only saving time to devote to other areas of business; you’re placing your supply chain backlog into the hands of trusted professionals.
A 3PL can help with a variety of logistics needs, including inventory management, warehousing, shipping and receiving, picking and packaging, and more. Some of the benefits of this partnership include:
- Lower cost of goods
- Greater logistics control
- Supplier flexibility
- Faster supply chain backlog fulfillment
Yet all 3PLs aren’t the same. That’s why working with an experienced 3PL with a proven track record of success is important.
Your Supply Chain Backlog Experts
At Smart Warehousing, we’ve helped companies like yours manage their supply chain backlogs for decades. As a 3PL, we offer industry-leading fulfillment solutions nationwide so you can stay on top of your customers’ growing demands and ship your orders with reliable accuracy.
Say hello to supply chain backlog peace of mind. Contact Smart Warehousing today to get started.