A customer calls looking for five cases of nitrile gloves. Your system says you only have three cases available.
The problem? There are eight cases sitting in the warehouse. Five are reserved for an order that isn’t scheduled to ship for another three weeks.
Now the customer service team must determine whether that inventory can be freed up, and if it can, find the order holding the reservation, make the adjustment, and get the new order moving.
This is a false stockout. For distributors using Microsoft Dynamics 365 Business Central, it can create unnecessary work while making available inventory harder to sell.
What Is a False Stockout?
Business Central can automatically reserve available inventory as orders come in. But a first-in, first-out approach doesn’t always account for when the inventory is needed.
Let’s say a manufacturer customer places a high-volume order that won’t ship for another 90 days. Because the order comes in first, available inventory is reserved against it in the system.
The next day, a contractor places a smaller order for the same product that needs to ship for a project tomorrow. The inventory is on the shelf, but the system shows it as unavailable because it is already committed to the manufacturer’s future order.
The distributor hasn’t run out of product. It has run out of unreserved product. The inventory physically exists but isn’t available to fulfill a current order because it has already been reserved for another one.
Future-dated orders aren’t the only way false stockouts can happen. Inventory can also remain tied to orders that are delayed, on hold, partially fulfilled, or otherwise unlikely to ship in the near term.
Without a process for continually reevaluating those reservations, available stock can remain committed even when another order has a more immediate need.
From custom-order workflows with built-in guardrails to smart document management, with SalesPad for BC, you can take complete control of processes that are too complex to manage in ERP.
The Cost of Poor Inventory Reservations
False stockouts create unnecessary work and add real cost to an order.
- The sale may be delayed or lost because it can’t be fulfilled in a timely manner.
- Employee time may be wasted tracking down inventory that is already available.
- Orders may take longer to process or require unnecessary manual intervention.
- Fulfillment costs may increase if the distributor expedites a shipment, transfers inventory from another location, or sources the product elsewhere.
- Customer relationships may suffer if products repeatedly appear unavailable when customers need them.
One SalesPad for BC customer was spending about four hours a day reviewing orders and manually moving inventory reservations around. When a new order couldn’t be reserved, someone had to figure out which existing order was holding the inventory, review when that order was due, and decide whether the stock could safely be reassigned.
False stockouts also distort purchasing decisions. If inventory repeatedly appears unavailable, teams may conclude they need more safety stock or place another purchase order when the better answer is to make more effective use of the inventory they already have.
The result is frustrating: Too much cash is tied up in inventory while customers are being told that products aren’t available.
Inventory for the Customer Who Needs it First
If you’ve committed product to a customer, you need to be confident that it will be available when it’s time to ship. But protecting commitments doesn’t require reserving every unit as soon as an order enters the system.
A better approach is to make reservations responsive to the way your business fulfills orders. For example, a distributor may decide that an order with a requested ship date more than five days away shouldn’t reserve the inventory yet in BC. Instead, the order can remain visible in a future-order queue until it moves inside that five-day window. Then and only then, that inventory is reserved.
That keeps the inventory available for orders that need to ship sooner without losing sight of the original commitment.
Distributors may also want to prioritize inventory according to customer groups, sales channels, profitability, or other criteria. By doing this, employees don’t have to make those decisions manually, order by order.
How SalesPad for BC Automates Inventory Reservations
SalesPad for BC’s Mission Control adds configurable order workflows and reservation management to Business Central. Distributors can build rules that determine how an order should be handled based on information already available in the system.
If an order comes in with a requested ship date several months in the future, a distributor can create a rule that evaluates that date and automatically sends the order to a Future Order Hold queue when it falls outside the defined time fence. Mission Control then automatically removes the inventory reservation, freeing that stock for nearer-term demand. Once the order reaches the appropriate time window, it will put it back into the fulfillment process and reserve the inventory again.
Ship date is only one way to determine which orders should have access to inventory. Mission Control workflows can also evaluate data from the order or customer when deciding what happens next.
For example, SalesPad for BC works with Customer IQ data to identify a highly profitable customer that is at high risk of churn. A distributor could use that information as a workflow condition and route the customer’s order into an expedited process.
Inventory can also be managed around specific customer groups. We have worked with customers that need to reserve inventory for a buying group and then reassign those inventory reservations as actual member orders arrive.
Rather than forcing every distributor into the same reservation logic, the workflow reflects how that distributor sells and fulfills product.
Get More From the Inventory You Already Have
Smarter reservation management keeps inventory aligned with actual demand. It reduces the time employees spend reviewing and reallocating reservations, makes more inventory available for near-term orders, and helps teams respond faster when customers need product.
SalesPad for BC automates those decisions. Mission Control can evaluate factors such as requested ship dates, move future orders into a hold queue, release their reservations, and bring those orders back into the process when the inventory is needed.
False stockouts don’t have to be accepted as just a cost of doing business. Learn how SalesPad for BC Mission Control helps you take back control.
