Managing Product Order Backlog

Since the global outbreak in early 2020, COVID-19 has changed the landscape of global procurement and logistics; while the New Year 2020 began with a lot of hope and expectation for product companies, it quickly faded due to an unexpected global health crisis caused by Covid-19. A strict lockdown was imposed by major countries, with no indication of when it would be lifted. This had an effect not only on end-users' financial purchasing power, but also on production capacity, which was hampered by labour shortages, raw material shortages, finished component logistical issues, and many other factors.

Product companies experienced a high number of order cancellations from customers across industry segments, while many Tier-1 and Tier-2 manufacturers, on the other hand, have shifted their focus and capacity to address current opportunities in the health sector by producing essential and emergency products. However, the situation has changed since then, and there are signs of economic revitalization, with massive demand across all sectors, which has culminated in another situation in which product companies are experiencing order backlog.

This paper highlights the order backlog challenge, the root cause, and potential workaround solutions and strategies to mitigate the impact in the short term while planning for the long term to protect the business from future disruptions.