Case Study:

Shortage Management

Initial Situation

Severe shortages of key components due to the global semiconductor crisis

Overloaded customer order backlog: >70% of orders requested for short-term delivery with no realistic planning basis

Rapid rise in overdue customer backlogs – risk of unfulfillable delivery commitments

Inventory increase due to customer pushouts & cancellations on standard parts, despite critical shortages – due to missing key components and production stops on customer side

Unreliable customer forecasts; risk of duplicate or inflated orders

Cash flow pressure from growing inventory levels and declining turnover

Executive reviewing shortage management dashboard showing component shortages, overdue orders and inventory overload – Nextshift Leadership consulting during semiconductor crisis
"Team reviewing supply chain dashboard with heat map during shortage management meeting – Nextshift Leadership consulting on backlog screening and escalation framework

Actions & Approach

Shortage Management & Escalation Framework

1. Backlog & Forecast Screening

Systematic assessment and prioritization of open customer orders by likelihood of fulfillment

Close coordination with customers to eliminate phantom demand and duplicates

Clear communication of “No Cancel / No Reschedule” (NCNR) supplier terms

2. Shortage Steering & Escalation Process

Established a dedicated “Shortage Board” with daily task force coordination

Leveraged global supplier contacts to redirect critical allocations

Structured evaluation of lead times, confirmed quantities, and supplier responsiveness

3. KPI-Based Management & Early Warning Systems

Developed and launched a backlog dashboard with heat map logic

Integrated metrics: On-Time Delivery, Purchase order backlog status, Customer requested vs confirmed date ratios

Defined escalation levels: regional / central / strategic

4. Tight Collaboration with Sales & Customers

Weekly joint risk reviews with key customers

Regular analysis of inventory KPIs: turn, aging, unallocated stock

Introduced a “Demand Transparency Framework” to improve forecast reliability

Results & Impact

Reduced purchase order backlog by >35% within 4 months

Improved availability for prioritized components (Top 50)

Restored transparency and credibility with both customers and suppliers

Established a lasting early warning system for inventory and supply health

Defined a scalable escalation process for future allocation phases

Executive team reviewing results of shortage management project – 35% purchase order backlog reduction and improved supply chain health KPIs