When inventory can’t cover every order at once, distributors have to make choices about where it goes first.
You may have orders from a long-standing, highly profitable account, a customer with an urgent need, and several other customers all waiting for the same product. Deciding which orders take priority may depend on customer relationships, profitability, urgency, contractual commitments, or other business factors.
If your system doesn’t account for those factors, inventory may be committed based on order timing or existing reservations instead.
With SalesPad for Business Central, distributors can use customer and order data to create inventory reservation and fulfillment rules that reflect those priorities and protect important customer relationships.
Why first come, first served doesn’t always work
Microsoft Dynamics 365 Business Central provides distributors with a strong ERP foundation, but its standard inventory reservation process doesn’t always account for the nuances of a distribution business.
Inventory may be reserved as orders arrive without considering the relative importance of the customers behind those orders. That works when supply is sufficient. But consider what happens when 100 units are available and you need 150 to meet customer needs.
A first-come, first-served approach answers: Which order got here first? It doesn’t answer several other questions that may matter just as much, if not more, to the business:
- Which customers generate the most profit?
- Is an important customer at risk of leaving?
- Which orders have the most urgent ship dates?
- Has inventory already been set aside for a strategic customer or buying group?
When inventory is limited, those factors can help determine where it goes first.
Customer priority also doesn’t have to be one-dimensional. A distributor might prioritize its most profitable customers, then use requested ship date to determine which of those orders comes first. Another might give additional priority to customers with elevated churn risk when inventory is constrained. Others may have contractual commitments or specific customer cohorts like buying groups that take precedence.
You don’t need to create one universal definition of a priority order; instead, define what priority means for your business.
Revenue doesn’t tell you which customers are most profitable
Prioritizing your best customers also requires knowing who they are. Revenue alone doesn’t tell the whole story. A high-volume account may also have a history of aggressive discounts, frequent expedited shipments, special handling, returns, or significant service resources. A smaller customer may ultimately contribute more profit.
That’s where Customer IQ for SalesPad adds another layer. Instead of judging an account only by how much it buys, teams can see which relationships contribute the most financially and which may need attention.
That information can then become actionable inside the order process.
Automate inventory allocation based on customer priority
Without an automated process, someone has to notice that you don’t have enough inventory, identify the competing orders for that inventory, recognize which customers should take priority, and decide what to do.
That leaves an important customer experience decision to someone seeing the situation at the right time.
SalesPad for BC’s Mission Control allows distributors to incorporate those priorities into their order workflows instead.
Mission Control evaluates information from the customer and the sales order and uses predefined conditions to determine where an order goes next. A distributor could create a workflow that recognizes an “A” customer (an account that contributes to the top 75% of total profit), a customer with elevated churn risk, a particular customer group, or another attribute and routes the order accordingly.
For example, you have limited inventory of a popular item and two orders competing for the remaining stock.
Customer B orders first. The account is less profitable and doesn’t currently show significant relationship risk.
Customer A places an order shortly afterward. Customer A has historically been one of your most profitable accounts. Customer IQ identifies the account as an “A” customer, while recent behavior indicates a high risk of churn.
If inventory is allocated strictly according to order timing, Customer B may receive the available stock because its order arrived first. But the distributor may have already determined that an A customer with elevated churn risk should receive priority when inventory is constrained.
With SalesPad for BC, those customer attributes can become conditions within the workflow. Customer A’s order could be identified and routed for expedited handling. Inventory reservation policies and workflow rules can then help operations execute according to the priorities the business has established.
Customer intelligence becomes part of the fulfillment process rather than information someone has to remember to check.
Put your inventory where it matters most
Inventory is one of a distributor’s largest investments. When supply is constrained, how that inventory is allocated can directly affect customer relationships and profitability. Treating every order identically may feel fair, but it doesn’t always reflect the priorities of the business.
The goal is to define those priorities before limited inventory forces employees to make the decision on the fly.
With the right customer data and automated workflows, you’ve already made the decision. And your order process knows what to do with it.
Learn how SalesPad for BC helps distributors automate order workflows and prioritize fulfillment based on the factors that matter most to your business.
