Backorder

Definition

An ordered line the house could not ship complete, owed to the customer until stock arrives.

Why It Matters

A backorder is a promise made with somebody else's schedule, and it is the point where a supply house's service reputation is actually decided. It also distorts the revenue picture, because an order booked is not an order shipped and a house under stress can carry a growing backorder while its sales look flat. Ask for the open backorder report, its age, and how much of it depends on one manufacturer, since a single allocation problem upstream can hold a quarter of the book.