An order management system typically includes a software application that is accessed by authorized users via a web browser or a desktop application. The application is used to enter data about customer orders, including the items ordered, the quantity of each item, the shipping address and method, etc. The data is stored in a central database, making it easy to access from different locations and by different business users. The order management system can also be integrated with other business applications, such as accounting software, ERP, and various sales channels, to provide a complete view of the business’s operations from a logistical standpoint.
An order management system can provide numerous benefits to businesses, including:
Reduced paperwork and manual labor
It can help to reduce the amount of paperwork associated with customer orders. Orders can be entered into the system electronically and stored in the central database. This eliminates the need for paper copies of customer orders and disjointed Excel spreadsheets that quickly become difficult to manage.
Increased accuracy
Mistakes made in fulfillment are costly and can have an adverse effect on your client satisfaction or even your online reputation, which is critical in today’s retail landscape. Orders are entered into the system using a standard format, which reduces errors, ensures that all data is captured accurately, and enforces a workflow that will improve the quality and efficiency of your operations.
Improved visibility
An order management system provides businesses with improved visibility into their operations. Authorized users can access the central database to view data about customer orders, inventory levels, shipping schedules, etc. This information can be used to make more informed decisions about business operations. This is especially valuable in the current remote work environment when accessing a file stored on someone’s computer is not an option.
Improved customer service
It helps businesses improve the quality of customer service. An OMS can export status updates so that customers can track the status of their orders online using the order management system. They can also receive automatic notifications when their orders have been shipped or delivered. This information can help reduce confusion and improve satisfaction levels.
Reduced costs
An order management system can be helpful for businesses to reduce operational costs associated with manual labor and customer service. The increased accuracy and efficiency of the system can lead to fewer mistakes and less waste. In addition, businesses may be able to negotiate better rates with suppliers thanks to the improved visibility into inventory levels provided by the system.
Order management systems are designed to help online retailers keep everything in one place. The path an order goes through can be tracked and managed in OMS. The stages of this path include:
The key stakeholders in order management are:
They place a new order
Your employees will be notified in real-time when a client places an order on a particular sales channel. As you may guess, the automated order system will quickly become the primary work application for your managers. When they have everything needed in one solution, they will get more control over the order fulfillment process and have more time for setting the connection with customers. And if you already have another back-office system for payment processing and accessing order data, no worries. Your custom solution can communicate with this software via an API (a standard communication protocol between multiple applications), and you won’t need to work on two separate platforms.
Order management in real-time
Order details are stored in the system. It can automatically suggest the nearest warehouse to ensure the fastest delivery possible. The software can also calculate all shipping expenses for a customer and a vendor. OMS can have multi-level management. This means the authority to manage different order fulfillment stages will be passed from one level to another to prevent confusion and mistakes.
Order fulfillment starts. SKU is picked from the stock
The system can print shipping labels for every new order. If an item is in stock, the system notifies warehouses about the new order. The warehouse prepares products for shipping based on the generated data by the system. If an item is out of stock or the number of items is coming to an end, the order management solution can notify you. And if the supplies also have access to the system, it will notify them directly. This reduces inventory audit time and facilitates communication with other stakeholders.
The order is shipped
From the moment clients, purchase orders, and the orders are ready for shipping, your managers will see them in the system. The client will also be notified when the shipping process starts. An extra value of such systems for customers is that they can see the approximate shipping date and expenses to be ready. Many businesses now offer the opportunity to track orders for customers. This allows the latter to see at what stage their order is now and how long it will take to complete the purchase.
Suppose that your product didn’t meet customer expectations. A client received their order, something dissatisfied them, and they want to return it to get their money back. The return and refund functionality can also be a part of your OMS. Once a client requests a refund, the system will automatically proceed with refunding money. Your customer service team will control all stages of a product traveling back to the warehouse. This will positively affect customer relationship management and increase customer satisfaction with your services.
Scalability
Manual management seems easy when you start. Indeed, managing 5-10 clients per week is not such a challenging task to complete. But once you scale, the situation changes. You are overwhelmed by lots of worksheets, files, and messages. If you decide to build an order management solution, your scalability will go with no challenges. Custom order management systems allow for limitless data management. This opens a way for growth.
Integrity
Order management software ensures data integration across different channels and departments. Changes propagate through the system in real-time. This reduces the possibility of errors and the risk of losing a client. With an API, you’ll be able to connect the system to your back-office software.
Automation
Manual work reduces effectiveness. It takes more time for employees to track everything manually. This, in turn, leads to frustration and decreases motivation at work. An order management system (OMS) is a must if you want your team to stay focused and bring new ideas to your business.
Analytics
You should supply items regularly. But what if they won’t be popular among your clients? How to know for sure? One option is to analyze sales and stock manually. But if your business has 20+ clients daily, it will be hard to do. Another option is to take a minute and look at the reports generated by the software. Your sales managers can use this data to detect the products you undersell or oversell and adjust the supply chain accordingly. Moreover, the popularity of some SKUs in a particular region can improve your logistics management. You will know what products to supply to the local warehouses to ensure the fastest delivery.
Unity
If you are an international business or work with global suppliers, this feature works for you. The right order management system can speed up international retail. They ensure fast payment processing and management across states.
An order management system is a powerful tool that offers numerous benefits for businesses. By reducing paperwork, increasing accuracy, improving visibility, and enhancing customer service, an order management system can help businesses operate more efficiently and cost-effectively. If you are looking for ways to improve your business’s operations, an order management system is definitely worth considering.