When the Backlog Says Build More

The backlog keeps growing. Here's what that means when your customer asks you to raise the rate.

Factories ended September with $1.62 trillion in unfilled orders for durable goods, up in 26 of the last 27 months.¹ A backlog that keeps growing ends up as a request to your plant: build more, and hold that rate. That request is a production ramp, and it breaks at the weakest link first.

Why It Matters

Orders are outrunning shipments. New orders for durable goods rose 1.8% in September to $345.4 billion, while shipments rose 0.9% to $336.8 billion.¹ That gap is what feeds the backlog.

Aerospace has years of work already ordered. Nondefense aircraft and parts orders rose 28.4% in September. That industry's backlog, $731.6 billion, equals about 44 months of September's $16.7 billion in shipments (our math from the Census figures).¹ Defense aircraft and parts shipments rose 4.4%.¹ Rate increases at the top flow down to every tier that makes a bracket, a casting or a harness.

The cushion is thin. Factory employment was little changed in September (+9,000), and the average factory workweek held at 40.6 hours, with 3.0 hours of overtime.² Orders for primary metals from January through September ran 16.0% above the same months of 2025.¹ Your suppliers' suppliers are feeling the pull too.

Across the Value Chain

Design: an engineering change in the middle of a ramp resets supplier tooling and qualification.
Plan: planning settings built for the old rate carry old lot sizes, lead times and safety stock.
Source & Procure: a supplier that met the old rate may lack the capacity or sub-tier material for the new one.
Make: the constraint moves; the cell that kept up at the old rate can become the bottleneck at the new one.
Fulfill: ship dates assume the new rate holds every week, not just in the first month.
Service: spare and repair parts compete with production for the same capacity, so installed customers can feel a ramp first.

What I'd Do This Week

S&OP is the key: it sets the one rate that drives the other four.

S&OP: call an off-cycle S&OP review this week to agree one confirmed rate, freeze it inside your time fence, and set your own exception thresholds so planners stop chasing every MRP exception and feeding the bullwhip. If they can't agree, the executive who chairs your S&OP review sets the rate by Friday.

Then, against that rate:

Procurement: release POs for your top 20 parts at the rate, so suppliers see one steady signal. If firm orders run out before the supplier's lead time or cross a blanket order's not-to-exceed amount, add releases or amend the order by Friday.
Inventory: if on-hand plus on-order covers less than an A item's replenishment lead time, reset its safety stock once by Friday, then leave it until the next S&OP cycle.
Suppliers: ask each top-20 supplier for a written capacity commitment against the rate. If one won't commit or missed your on-time target over the last 90 days, start qualifying a second source by Friday.
Freight: share lane volumes at the rate with carriers. If tender acceptance falls below contract or spot share of loads rises above last quarter, rebid the lane or lock in a backup carrier by Friday.

The Bottom Line

A growing backlog is good news that arrives as a hard question: can you hold a higher rate, every week, with the suppliers and people you have? Find where your ramp breaks before your customer's forecast finds it for you.

Where would your plant break first if your customer asked for more next quarter? Reply and tell me. It comes straight to me.

John Foley
Founder, Foley Strategic Advisory

Want the next Brief in your inbox? Subscribe on the Weekly Brief page to get every Monday issue.

Subscribe to the Weekly Brief

Sources

U.S. Census Bureau, "Advance Report on Durable Goods Manufacturers' Shipments, Inventories and Orders, September 2026," released October 27, 2026 (advance estimates; revised figures due November 3, 2026). census.gov (opens in a new tab)
U.S. Bureau of Labor Statistics, "The Employment Situation, September 2026," released October 2, 2026. bls.gov (opens in a new tab)