There is an automatic backorder available for customers from all companies that work with e-Trade and have more than one warehouse.
E.g., your company trades in Moscow and St. Petersburg, so the goods is stored in several warehouses (according to the number of stores). There will always be items that are available in Moscow and unavailable in St. Petersburg and vice versa. With singular expensive items, this situation is economically viable – thus, it’s not very wise to keep some rather pricey plotters ten thousand dollars each at every store’s warehouse, if they only sell about one and a half pieces per month throughout all of the chain’s stores. Nevertheless, you have to keep them for the product range to be complete.

That’s where backorder helps: the customer can see and order ALL products located in ALL warehouses (restrictions, set by the company’s business logic, may apply).
​ While the customer completes their order, the system checks the correlation between the product location and the shipping warehouse.  Items located at the remote warehouses, are grouped into a separate reserve, and the customer is informed of the date and time of their shipment.
Next, orders to transfer the demanded items to the required warehouse are generated automatically within the common inter-warehouse logistics system (that’s why it’s an automatic backorder). The products arrive; the happy customer is notified via email/SMS and comes to pick them up. Or awaits the delivery.

Please note: human participation is not required throughout the whole process, beginning with the order placement and until it’s been received, except, of course, for warehouse handwork. So you can easily dismiss all of your ‘product dispatchers’, ‘assortment managers’ and other useless eaters. Ultimate makes no mistakes, never gets sick or depressed and never asks for a payraise.

Now, Just.ru​ here took it a step further. With our help they virtually connected their suppliers’ warehouses, including them into the e-Trade logistics system. Thus, if the product is available at a supplier’s warehouse, it can be ordered by the end customer just as it can be in the above-mentioned scheme – as if it’s physically stored at their own warehouse.

All business rules are hereby observed – if the website informs the customer that the order has been created, it means that the supplier has created an issue document, we have created a receipt document, the supplier has all the products available at their effective prices and will deliver them within the indicated period. The system tracks suppliers’ price changes in a background mode, and the website displays correct prices, stock, delivery times, etc.

So, relying on the e-Trade capabilities, Just made a few more sure steps to being an ideal trader in the philosophy of lean trading – when the retail company is no more than a technological layer between the producer and the end customer, providing an easy-to-use ordering interface and a logistics pipe for a stream of singular items. The retailer warehouse, which in the Japanese management terms is pure Muda of stock, tends towards zero.

Let’s look closer at the figures.
Implementation of the super-duper-automatic-back-order allowed Just to increase the product range available for sale by 40%, and the warehouse turnover – by 20%. The volume of stock in absolute terms increased by only 2%. Cost of having additional warehouse space, buyers, warehouse personnel, truck drivers, etc. – yes, you guessed it right – 0. Minus zero, that is.

Certainly, a full-scale implementation of the described scheme requires business processes running smoothly (to a high degree) both inside the company and in cooperation with suppliers.
Operational perfection never comes easy, but it’s an absolutely essential condition for transforming a business into a reliable profit generator, rotating with a metronome-like precision.