Automatic Backordering in Odoo 16 using the Inventory module
Backordering is a business practice in which a customer places an order for a product that is temporarily out of stock or not currently available for immediate delivery. Backordering can be a useful strategy for both businesses and customers.
For Businesses: Backordering allows businesses to continue generating sales and revenue for products that are temporarily unavailable. It can help maintain customer loyalty and prevent customers from seeking alternatives elsewhere.
For Customers: Backordering allows customers to secure products they want, even if they are currently out of stock. This can be especially beneficial for products with high demand or limited availability.
When the products are in high demand, the products need to be delivered to the customer at the earliest to enhance customer satisfaction. Backordering thus ensures that the customer can place an order even when the product is out of stock. They don’t have to wait to order as long as the product is replenished in our stock. It also reduces the inventory costs.
We can create Backorders for Receipts, Delivery orders, manufacturing orders, etc. with the help of the back ordering feature in the ‘Inventory’ application.
Enabling Backordering Feature
Inventory Application => Configuration menu => Settings => Operations section => Picking policy
In this setting, We can select 2 options from the drop-down. It can be either ‘Ship all products at once’ or ‘Ship products as soon as available with back orders’. In the ‘Ship all products at once’ option, the transferring of products happens only when all products are available. By selecting the ‘Ship products as soon as available with back orders’ option, we can transfer products with the available quantity and create backorders for the rest.
There are 3 methods we can use for creating backorders. Let’s see each method and its outcomes in the case of creating backorders for Delivery orders.
Inventory Application => Configuration menu => Operation Types => Delivery Orders.
=> Selecting the ‘Ask’ option in the ‘Create Backorder’ field
This option asks the users whether they want to create a backorder or not when the ordered quantity of products is out of stock. Let’s understand this with an example.
We can select the ‘Ship all products as soon as possible with backorders’ option in the settings.
Creating a Quotation
Sales Application => Orders menu => Quotations => New
Now, make sure that you have selected the shipping policy ‘As soon as possible’ in the ‘Other Info’ tab of the quotation. It is then only the quantity of products that are available in our stock will be delivered to the customer as soon as possible. On confirming the created quotation and going to the Delivery order, we can see that the required quantity of Bloc Screens is not available in stock.
Now, when we ‘Validate’ the quotation, a pop-up window appears.
This pop-up asking whether to create a backorder or not appears because we have selected the ‘Ask’ option for creating a backorder in the Delivery orders.
If you want to create a backorder for the remaining quantity of the product, select the ‘Create Backorder’ option. If you don’t want to create a backorder and would like to proceed with the delivery with only the available quantity of the product in stock, select the ‘No Backorder’ option. Let’s select the ‘Create Backorder’ option as I would like to demonstrate the process of creating backorder. The transfer of the available 6 Bloc screens is created. Now, when we go back to the Sales order, we can see that the ordered quantity is 10 but the delivered quantity is only 6 and there are two delivery orders created for the sales order. The one is for the delivery of the available 6 Bloc screens in stock for which the status will be ‘Done’ and the second is for the delivery of the remaining 4 Bloc screens that are out of stock which will have the status as ‘Waiting’.
On going to the Delivery Order smart button of the sales order, two delivery orders with different statuses can be seen. The status of the newly created backorder is seen as ‘waiting’.
When we go to the newly created delivery order, we can see the reference of the transfer for which the back order is created along with the remaining quantity of Bloc screens as done quantity once it is replenished in our stock. When the done quantity is updated, the status of the transfer is changed from ‘Waiting’ to ‘Ready’ on going back to the transfers of that sales order.
It is also observed that the delivery status of the sales order is updated as ‘Partially Delivered’ on going to the ‘Other Info’ tab in the delivery of the sales order.
=> Selecting the ‘Always’ option in the ‘Create Backorder’ field
In this case, a backorder will be automatically created for the required quantity of products out of stock without the pop-up window appearing and asking to create a backorder or not. Thus, this is the exact case when automatic backordering feature comes into action in the delivery orders.
After selecting the ‘Always’ option in the ‘Create Backorder’ field in the ‘General’ tab of the delivery orders, click on the ‘Save’ button. Now, when we create a sales order and validate the quantities, the pop-up window does not appear as in the previous case and a backorder is automatically created for the unavailable quantity of products in stock.
=> Selecting the ‘Never’ option in the ‘Create Backorder’ field
This is the case when no back ordering is possible for delivery orders. It is therefore that only the quantity of products in stock is delivered and the remaining quantity out of stock is cancelled and will not be delivered. So, only 6 Bloc screens are delivered to the customer out of the 10 Bloc screens ordered.
Thus, users can decide how to create backorders for following the best inventory management practices in a way suitable for your business in Odoo.