On-Order Inventory
Definition
Stock that has been ordered from suppliers or other facilities but not yet received, represented by open purchase orders, transfer orders, or production orders. It is committed inbound supply.
In Practice
On-order inventory is the pipeline of confirmed future receipts. It includes purchase orders a supplier has not yet shipped as well as goods already in transit, and in internal networks it covers open transfer and production orders. It is a core input to inventory position, ensuring replenishment logic recognizes supply that is already coming.
The quality of on-order data lives and dies on due-date honesty. Open POs with stale, slipped, or fictional due dates poison every downstream calculation: ATP promises against receipts that will not arrive, and reorder logic stays silent while a real shortage develops. A weekly open-order scrub, confirming dates with suppliers and closing dead lines, is unglamorous, high-value planner work.
Example: a planner investigating a near-stockout finds 2,000 units on order, but half sit on a PO the supplier acknowledged for a date three weeks later than the system shows. Correcting the date exposes the true gap and justifies a partial air-freight expedite.
Related Calculators
Related Terms
Inventory that has been ordered or shipped but has not yet arrived at its destination, such as goods in transit between a supplier and a warehouse. It is owned but not yet available to sell.
Inventory PositionThe total stock available to meet future demand, calculated as on-hand inventory plus on-order inventory minus backorders and committed allocations. It is the number replenishment decisions should be based on.
On-Hand InventoryThe physical quantity of stock currently present in a location, regardless of whether it is committed to orders. It is what you would find if you walked out and counted the shelves.
ReplenishmentThe process of restocking inventory to meet ongoing demand, whether by purchasing from suppliers, transferring between locations, or triggering production. It is the execution engine that keeps stock policies real.