What does backlog refer to in supply chain management?

Backlog in supply chain management specifically refers to customer orders that have been placed but have not yet been fulfilled or shipped. This concept highlights the gap between customer demand and the ability of a company to meet that demand within a given timeframe. A backlog indicates that there is a queue of orders waiting to be processed, which can affect customer satisfaction and inventory management strategies.

The presence of a backlog can provide valuable insights into demand trends and help organizations plan their production schedules and inventory levels more effectively. By analyzing backlogs, companies can identify potential issues in their supply chain or production capabilities and take corrective actions to improve service levels and operational efficiency. Therefore, understanding backlogs is crucial for managing customer expectations and optimizing supply chain performance.