Case Study:
Shortage Management
Initial Situation
- Severe shortages of key components due to the global semiconductor crisis
- Overloaded customer order backlog
- Rapid rise in risk of unfulfillable delivery commitments
- Inventory increase due to customer pushouts & cancellations
- Unreliable customer forecasts; risk of duplicate or inflated orders
- Cash flow pressure from growing inventory levels
Actions & Approach
Shortage Management & Escalation Framework
1. Backlog & Forecast Screening
- Systematic assessment and prioritization of open customer orders
- Close coordination with customers to eliminate phantom demand
- Clear communication of “No Cancel / No Reschedule” (NCNR) terms
2. Shortage Steering & Escalation Process
- Established a dedicated “Shortage Board”
- Leveraged global supplier contacts
- Structured evaluation of lead times and confirmed quantities
3. KPI-Based Management & Early Warning Systems
- Developed and launched a backlog dashboard
- Integrated metrics: On-Time Delivery, Purchase order backlog status, Customer requested vs confirmed date ratios
- Defined escalation levels
4. Tight Collaboration with Sales & Customers
- Weekly joint risk reviews with key customers
- Regular analysis of inventory KPIs
- Introduced a “Demand Transparency Framework”
Results & Impact
- Reduced purchase order backlog
- Improved availability for prioritized components
- Restored transparency and credibility with both customers and suppliers
- Established a lasting early warning system
- Defined a scalable escalation process
