Purpose of the lesson

Compare actual customer orders with the approved order schedule, identify variances, allocate available-to-promise stock according to customer priorities and realign delivery commitments.

Practical outcome

By the end of this lesson, you must be able to:

• Prepare an updated customer-order schedule.
• Compare actual orders with scheduled demand.
• Identify and record order variances.
• Confirm available-to-promise stock.
• Allocate limited stock according to approved customer priorities.
• Realign customer orders and delivery schedules.
• Create and monitor back orders.
• Communicate approved schedule changes.

1. Gather the required information

Obtain:

• Approved customer-order schedule
• Actual customer orders on hand
• Current stock-on-hand report
• Existing stock allocations
• Confirmed replenishment or production receipts
• Customer-priority list
• Requested delivery dates
• Warehouse capacity
• Transport and delivery constraints
• Order cut-off times
• Product and SKU information
• Back-order report
• Customer-service policies

Use information from the same reporting date and planning period.

2. Prepare the current customer-order schedule

Record every actual customer order.

Confirm:

• Customer and delivery location
• Order reference
• SKU and quantity
• Customer priority
• Requested delivery date
• Special handling requirements
• Order status
• Any incomplete or disputed information

3. Compare actual orders with the planned schedule

Compare the actual orders with the quantities and dates originally scheduled.

Use:

Quantity variance = Actual order quantity − Scheduled quantity

Example:

• Scheduled quantity: 400 units
• Actual order quantity: 500 units

Quantity variance = 500 − 400 = 100 units

A positive variance means actual demand is higher than planned. A negative variance means it is lower.

Also compare:

• Number of orders
• Customer mix
• SKU mix
• Order dates
• Delivery dates
• Priority requirements
• Delivery destinations

4. Create a variance register

Record every significant difference.

Classify variances as:

• Quantity variance
• Product-mix variance
• Date variance
• Customer variance
• Priority variance
• Cancellation
• New order
• Back order
• Location change

Confirm the source of each variance before changing the operational schedule.

5. Determine available-to-promise stock

Available-to-Promise (ATP) is the uncommitted stock that can still be promised to customers.

Use:

ATP = Usable stock + Confirmed receipts − Existing confirmed allocations

Example:

• Usable stock: 1,000 units
• Confirmed receipt before delivery: 400 units
• Existing allocations: 900 units

ATP = 1,000 + 400 − 900 = 500 units

Do not include:

• Damaged stock
• Quarantined stock
• Unconfirmed receipts
• Stock reserved for another approved purpose
• Inventory arriving after the required delivery date

ATP schedule

6. Apply customer priorities

Where stock cannot satisfy all orders, apply the organisation’s approved priority rules.

Priorities may consider:

• Contractual service levels
• Critical customer requirements
• Order date
• Customer classification
• Public or safety-critical need
• Product availability
• Penalty exposure
• Strategic importance
• Fair allocation requirements

Do not allocate stock according to personal preference. Record the rule used and obtain approval where required.

Priority-allocation example

Available stock: 700 units

Where business rules permit, a proportionate allocation may be used instead of allocating all available stock to the highest-priority customer.

7. Identify short supply

Calculate:

Short supply = Confirmed order quantity − Allocated quantity

If a customer orders 500 units and receives an allocation of 350:

Short supply = 500 − 350 = 150 units

Record:

• Customer
• Order
• SKU
• Quantity ordered
• Quantity allocated
• Short quantity
• Expected availability date
• Required customer action
• Responsible employee

8. Create back orders

Create a back order for the quantity that cannot be supplied on the original delivery date.

A back-order record should include:

Link the back order to the original customer order to prevent duplication or loss of demand.

9. Assess delivery and warehouse constraints

Before realigning orders, confirm:

• Picking and packing capacity
• Loading-bay availability
• Vehicle capacity
• Route availability
• Customer receiving windows
• Stock-receipt dates
• Production completion dates
• Product-handling restrictions
• Employee and equipment availability

A stock allocation is not achievable if the warehouse or transport operation cannot process and deliver it within the promised time.

10. Realign customer orders

Use the confirmed stock allocation and operational constraints to update:

• Order quantities
• Picking dates
• Dispatch dates
• Delivery dates
• Route allocations
• Back-order dates
• Customer commitments

Possible actions include:

• Split the order.
• Move the delivery date.
• Allocate an approved substitute.
• Transfer stock from another facility.
• Prioritise part of the order.
• Combine the back order with a later delivery.
• Cancel an item with authorised customer approval.

Realigned order schedule

11. Coordinate with affected functions

Communicate approved changes to:

• Customer service
• Sales
• Inventory control
• Warehouse
• Production
• Procurement
• Transport
• Finance
• Customer or end user

State:

• What changed
• Why it changed
• Orders affected
• Revised quantities and dates
• Required action
• Responsible person
• Escalation requirements

Use the approved communication channel and retain evidence.

12. Obtain customer confirmation

Where a delivery commitment changes:

1. Explain the constraint clearly.
2. Provide available options.
3. Confirm the agreed solution.
4. Record the authorised customer response.
5. Update the order and delivery schedule.
6. Notify affected operational teams.

Do not record a revised date as customer-approved without confirmation.

13. Monitor the realigned schedule

Track:

• Stock receipts
• Production completion
• Order allocation
• Picking and dispatch
• Back-order quantities
• Revised delivery dates
• Customer communication
• Proof of delivery
• Outstanding exceptions

Update the back-order register until every outstanding quantity has been delivered, cancelled or otherwise resolved.

14. Validate the final schedule

Before release:

1. Confirm all actual orders are included.
2. Verify customer and SKU information.
3. Recheck variance calculations.
4. Confirm available-to-promise quantities.
5. Verify priority rules.
6. Reconcile allocations with available stock.
7. Confirm warehouse and delivery feasibility.
8. Record every short supply and back order.
9. Confirm revised dates with affected customers.
10. Obtain approval and distribute the final schedule.

Practical task

You are provided with actual customer orders, the approved order schedule, customer-service priorities, stock shortages and warehouse and delivery constraints.

Complete the following:

1. Prepare an updated customer-order schedule.
2. Compare actual orders with the original schedule.
3. Create a complete variance register.
4. Calculate available-to-promise stock by SKU.
5. Allocate available stock using approved customer priorities.
6. Calculate short-supply quantities.
7. Create back orders for outstanding quantities.
8. Realign customer orders and delivery dates.
9. Record the required communication with affected parties.
10. Submit the approved schedule and supporting evidence.

Required evidence

Include the following in your Portfolio of Evidence:

• Original customer-order schedule
• Actual customer-order list
• Updated customer-order schedule
• Variance calculations and register
• ATP calculations by SKU
• Customer-priority allocation
• Short-supply calculations
• Back-order register
• Realigned delivery schedule
• Evidence of customer and internal communication
• Evidence of approval
• Completed observation checklist
• Learner declaration of authenticity

Competence checklist

Lesson Summary

To coordinate demand-execution schedules, compare actual customer orders with the approved plan and record all quantity, product, date and priority variances. Calculate available-to-promise stock and allocate it according to approved customer priorities. Record short supply as traceable back orders, then realign quantities and delivery dates around stock, warehouse and transport constraints. Communicate approved changes to customers and affected operational teams, monitor outstanding commitments and retain the schedules, calculations and communication records as practical evidence.