The efficiency of the entire supply chain hinges on a single process: order management. The order management process is a series of events that kick off every time a customer places an order.
It doesn’t matter whether you are well-versed in the concept or still find order management and fulfillment processes to be mysterious. This introductory guide will tell you all you need to know.
Order management involves receiving, tracking, and fulfilling customer shipments. Typically, order management begins when a customer orders and ends when the buyer gets their load. However, return processes and post-delivery customer service functions also fall under the order management umbrella.
Think about the last time you purchased something online. That item didn’t spontaneously jump off the shelf, pack itself, and arrive at your doorstep. There is a structured process in place that ensures everything runs smoothly from the moment you click “Buy” to the time you receive your order.
The order management process has many steps, ranging from taking and processing orders to ensuring those orders make it to the right customers. In other words, it is your formalized, repeatable strategy for managing new orders. Some of the critical stages of order management include:
Let’s consider a real-world example of the typical order management process. In our scenario, a customer, “Anna,” finds a beautiful pair of shoes on your website. Thanks to your strategic use of sales channels and commitment to providing a great customer experience, she is primed to make a purchase and gladly clicks the “Buy” button. Here’s what happens next:
As you can see, a lot goes into providing your customers with a frictionless experience. That’s why you need dynamic order management processes.
An order management software solution is a platform designed to orchestrate all of your order-processing workflows. An OMS functions like a maestro that ensures each element of the order-processing orchestra works in harmony with all the other components.
Order management software ranges from standalone solutions to enterprise resource planning (ERP) platforms equipped with warehouse, transportation, and order management applications. The latest generation of OMS platforms includes automation tools, reporting capabilities, and other advanced features designed to save you time and money.
A well-designed OMS represents a valuable asset to your business. It gives you an arsenal of tools like:
Order management software is a do-it-all platform that helps you streamline your order management processes.
Order management solutions can positively impact every step of your workflow, from warehousing to delivery to communications. They provide a dynamic assortment of benefits, including:
The real-time tracking capabilities of order management software support just-in-time ordering. This means that you only have to stock what you need. You can make stockouts a thing of the past while minimizing resource waste and keeping your storage costs in check.
Whether you manage your own warehouse or outsource this responsibility to a third party, OMS technology sets the stage for significant short- and long-term cost savings.
For organizations managing multiple warehouses, an OMS is a dream come true. You can use this powerful platform to ensure stock is balanced and rotated efficiently.
Additionally, you can obtain granular insights into the purchasing habits of customers in each region and manage your stock levels accordingly. By looking more closely at regional distribution needs, you can also expedite shipping times and keep your network of warehouses on the same page.
Faster processing leads to faster delivery. You can quickly receive orders, relay information to warehouse employees, and coordinate with carriers to get goods on their way to customers.
An order management and processing solution will help you pinpoint inefficiencies in your delivery workflows and deliver a better customer experience. If there’s one certainty in life—and in business—it’s that people want to get their orders fast. With an OMS, you can deliver for your customers and exceed their expectations.
When you’re managing your order processing workflows with disjointed applications, running analytics is challenging. Even if you have a robust analytics solution, it can’t provide a full picture of your order management process because it doesn’t have access to a consolidated source of data.
With an OMS, you can unify your data and obtain eye-opening insights into your order management processes. Then trim the fat from your operations, optimize processes, and watch your efficiency soar.
When each of your teams operates in a vacuum, they cannot realize their true productivity potential. You need your sales, marketing, and fulfillment teams working in perfect harmony to maximize customer satisfaction and revenue.
The best order management systems include powerful integrations that connect all of your teams and departments. With an OMS, your staff can share information, collaborate, and communicate like never before.
An order management system not only analyzes your data but also includes dynamic reporting tools that you can use to transform your information into digestible insights. Whether you need to keep stakeholders in the loop or inform your decision-making, you can do it all in a cloud-based OMS.
The reporting capabilities of an OMS will also help you with compliance and end-of-year tax preparation. As a result, you won’t have to waste hours generating reports or hunting for documents. Everything will be in one place.
Predictive analytics and real-time stock updates ensure that top products are always available. If stock levels begin to dwindle, you can reorder to avoid a stockout and keep your customers happy.
On a broader scale, you can identify recurring stock issues with vendors and determine when it’s time to diversify your partner network. If a vendor isn’t living up to their end of your agreement, you can move on before they impact your bottom line.
Microservices are an organizational and architectural approach to software development. Under this model, software is composed of loosely coupled, independent services that complement one another’s functionality.
Many order management systems are composed of or augmented by these tiny processes and applications. This approach yields a modular OMS that is scalable, efficient, and customizable to your unique needs. Furthermore, if one microservice fails, the remaining ones continue functioning due to their loosely coupled nature.
Microservices offer a cost-effective means of expanding the capabilities of your OMS and getting a stronger return on investment. If you are in the market for an OMS, make sure microservices are part of the equation.
Several exciting trends are reshaping order management strategies and empowering businesses to tap into unprecedented efficiency. Some of the most notable trends include:
Everyone is talking about artificial intelligence these days, including retailers, fulfillment centers, and other critical cogs in the supply chain. Order management and AI have already started to converge, which has led to some exciting developments in the OMS space. AI-powered OMS platforms can analyze customer behavior, support decision-making, deliver personalized product recommendations, and much more.
Manufacturers, retailers, and other members of the supply chain have tracked key metrics for decades. However, this data was often days or even weeks old. Recent advancements in analytics technologies have enabled businesses to track metrics in real time and adjust to meet productivity goals.
Staffing shortages, talent deficiencies, and a wide array of employee-related hurdles have exposed the flaws in manual order management. Businesses are responding by replacing those manual processes with automated alternatives. From installing robots at packing stations to streamlining workflows through AI, businesses are doing all they can to reduce the burden on their staff.
Order management systems are not a new invention. However, legacy OMS solutions are typically run on-premise and are quite limited in scope. Integrating traditional on-premise order management systems is expensive and time-consuming, as is scaling such a platform.
Most modern order management software solutions leverage a cloud-based deployment model and offer several complementary modules. As such, they allow businesses to converge their data, applications, and software stacks to create a unified solution. The result is a more efficient platform, better data visibility, and reduced long-term costs.
There are numerous order management systems out there, which can make it tough to cut through the noise and identify which is the right platform for your business. To help, we’ve outlined five factors to consider when choosing an order management solution.
When analyzing the cost of an OMS, look beyond the price tag and consider what you are actually getting for your investment. Also, be wary of hidden fees, as some software vendors have complex billing processes that make it difficult to determine precisely what you are going to pay.
Find out what factors impact your bill, and be mindful of long-term maintenance. Knowing these details helps you make sure you are comfortable with the cumulative cost of ownership.
Is the software easy to implement? Does the vendor offer personalized deployment support, or are you on your own? These are two questions you need answered before settling on an order management platform.
Implementing any OMS will likely involve some level of difficulty. However, certain systems are better suited for certain kinds of businesses.
For instance, some platforms are more efficient for small to mid-market businesses, whereas others are enterprise-grade solutions meant for large organizations. Choose a platform that aligns with the needs and size of your business to ensure a smoother implementation.
Cloud-based OMS platforms offer far better scalability than on-premise solutions. However, there are instances where the latter will be the better approach for your business. Consider your short- and long-term needs so that you can find a solution that grows with your business.
It doesn’t matter how powerful an OMS is if it is a headache to use. Whenever possible, schedule a demo of a platform and invite some of your line- and mid-level staff to attend. Who better to provide feedback on the user experience than those who will actually be using it every day?
Is the platform solely an order management system, or does it include other modules as well? Most businesses would be better served by an ERP platform that includes an order management module, such as Microsoft Dynamics 365.
Order management is one of your most important business processes. Shouldn’t you use the very best tools to streamline your order management cycle?
We think so, too, which is why Cavallo empowers you to maintain dynamic order management and sales tools using Microsoft Dynamics. If your organization is already running Microsoft Dynamics or is considering making the switch, our solutions help you get the most bang for your technology buck.
Don’t just take our word for it. Book a free demo, and you’ll see how updating your Microsoft order management software with us can help you bring your business to the next level.