Trending Backlog Over Time: A Best Practice for Manufacturers

Backlog is a critical metric for manufacturers, yet many only look at its current value rather than how it trends over time. Tracking backlog trends provides key insights into capacity planning, production efficiency, and revenue forecasting. In this article, I’ll explain why tracking backlog trends is essential and how to do it using Power BI and Power Automate, as well as provide practical examples of its application.

What Is Backlog?

Backlog represents the total value of orders that have been entered into your system but have not yet shipped to customers or been invoiced. Most manufacturers know their backlog value at a given moment—whether from their ERP system, a Power BI dashboard, or another reporting tool. However, looking at a single backlog figure in isolation is like viewing the tip of an iceberg—you may be missing critical insights hidden beneath the surface.

Why Tracking Backlog Trends Matters

Monitoring backlog trends over time is crucial for several reasons:

  • Capacity Planning: If the backlog is increasing significantly, it may indicate that production capacity needs to be adjusted to meet customer demand.
  • Revenue Forecasting: Since backlog represents future revenue, understanding its fluctuations helps in financial planning.
  • Early Problem Detection: A decreasing backlog may signal a slowdown in sales or inefficiencies in order processing, which should be addressed proactively.

Seeing backlog trends graphically over time provides a much clearer picture than looking at static numbers. Trends can reveal seasonal patterns, production bottlenecks, or sudden shifts that require immediate attention.

The Challenge: Many ERP Systems Lack Historical Backlog Data

A common problem is that many ERP systems do not store historical backlog values, making it difficult to analyze trends. If your system only shows today’s backlog without tracking past data, you won’t be able to spot trends or compare current performance to previous periods. Fortunately, this can be solved using Power Automate and Power BI.

How to Track Backlog Trends Using Power Automate and Power BI

To overcome the limitation of ERP systems that don’t store backlog history, we can use Power Automate, Microsoft’s workflow automation tool, to record backlog data at regular intervals and then visualize the trends in Power BI. Here’s how:

  1. Schedule Data Capture: Set Power Automate to run on a recurring schedule—every night, for example.
  2. Extract Backlog Data: Run a query to retrieve backlog values from your ERP or Power BI dashboard.
  3. Store Data for Historical Tracking: Save these values in a simple log file, such as a CSV or Excel file, or a SQL database for more advanced users.
  4. Integrate with Power BI: Load this backlog history into Power BI, allowing users to analyze trends over time.

Visualizing Backlog Trends in Power BI

With backlog history stored, it becomes easy to create insightful visualizations in Power BI:

  • Time-Based Graphs: Display backlog trends over weeks, months, or years to identify patterns.
  • Target Setting: Define desired backlog levels for future months to guide production planning.
  • Decision Support: Provide management and production teams with real-time insights to improve operations.

Example: Identifying Backlog Trends

Using Power BI’s historical data capabilities, we can analyze backlog trends over different timeframes:

  • Quarterly View: Examining a single quarter may reveal regular fluctuations in the backlog.
  • Yearly View: Looking at a full year’s data might uncover seasonal demand shifts.
  • Multi-Year Trends: A three-year view could show a significant shift in business, such as a gradual decline in backlog following an initial spike.

For instance, in one example dataset, backlog showed a steady decline over three years after a large spike. This kind of insight helps businesses understand long-term trends and adjust strategies accordingly.

Taking Action on Backlog Trends

Tracking backlog trends is only valuable if you act on the insights gained. By regularly reviewing and discussing backlog data, companies can:

  • Adjust production schedules to meet demand fluctuations.
  • Optimize staffing and resource allocation based on backlog trends.
  • Address sales or order processing inefficiencies before they become critical issues.

Conclusion

Understanding backlog trends is a best practice that can significantly enhance decision-making in manufacturing. By leveraging Power Automate and Power BI, manufacturers can automate backlog tracking and gain valuable insights that drive efficiency and profitability.

If your company struggles with backlog tracking and would like assistance implementing these solutions, feel free to reach out to us at Chortek. If you found this article helpful, please like and share it with others who may benefit from it. Thanks for reading!