Order Management is the backbone of any business and it is the starting point of the order-to-cash (OTC) cycle. It is critical for the company that everyone from the sales to supply chain to finance should be on top of the order-to-cash cycle and ensure that the customers are served on-time and in-full (popularly measured as OTIF).
Hence, order management in modern logistics and supply chains is like a complex web that can stretch across continents while still demanding high timeliness and accuracy. When these orders are ready to be shipped, the swiftness of the supply chain is defined by how strong the order management process is in the backend.
Whether your business is a logistics powerhouse or a small business trying to manage the supply chain somehow, this article is for you. We’ll discuss how an efficient OMS can help increase the efficiency of a warehouse.
Understanding the Basics: What is Order Management?
Companies have realized its importance and started focusing on building robust Order Management Systems (OMS). OMS are particularly helpful when the order volumes are high and on-time customer service is critical.
OMS impacts all nodes of the supply chain, including the warehouse. Warehouse efficiency is no longer confined to the simple movement of goods within four walls. It involves activities from inventory management, picking, and packing to the final dispatching goods and sharing the tracking details with the customers.
An inefficient warehouse can lead to stockouts, delays, and increased operational costs in such critical and connected steps. In a marketplace where customer loyalty is hard-won but easily lost, such inefficiencies can risk an organization’s reputation and bottom line.
This is where the OMS is critical for every company. At its core, order management is about overseeing and orchestrating the entire OTC cycle. OMS is the unsung hero of the logistics world, toiling in the background, keeping sales in sync with the supply chain, and ensuring that the right product reaches the right customer at the right time.
Order management is the administration of business processes related to orders for goods or services. Whenever a customer wants to buy something from your company, he’ll place an order.
This order can be placed through any channel, like online or by calling your salesperson. The system that manages this order from start to fulfillment is called the Order Management System (OMS).
The significance of order management cannot be overstated. Think of the numerous steps the order must go through – registration, processing, inventory allocation, tracking, and fulfillment.
This lifecycle directly influences customer satisfaction, brand reputation, and revenue generation for the business.
OMS vs. WMS
When looking at OMS from the warehouse perspective, it’s crucial to differentiate an Order Management System (OMS) from a Warehouse Management System (WMS).
While both are pivotal to the company’s logistics and supply chain, their functionalities broadly differ.
A Warehouse Management System primarily focuses on operations within the four walls of a warehouse – managing warehouse resources and inventory levels, optimizing storage solutions, and overseeing the pick, pack, and ship processes.
On the other hand, an order management system operates on a broader spectrum. It integrates various touchpoints – from sales channels inventory to customer service – ensuring that orders are processed efficiently across the board.
One way to look at it is to think of WMS as the partner for OMS that keeps things in the warehouse ready when needed.
The Role of an Order Management System (OMS) in a Warehouse
Within the vast ecosystem of a warehouse, the OMS acts as the central hub that connects various functionalities. Its role is analogous to a skilled orchestra conductor, harmoniously blending the individual efforts of multiple instruments (or, in this case, warehouse processes) to produce a melodious outcome – seamless order fulfillment.
An efficient OMS effortlessly interfaces with multiple sales channels. Whether orders come from an e-commerce website, a physical storefront, or a mobile app, OMS centralizes them for consistent processing. Doing so prevents common problems such as overselling or stockouts and helps build a base for solid data analytics.
Also, OMS complements inventory management by providing real-time updates about stock levels.
With an integrated OMS, the days of manual stocktaking and the resultant human errors are gone. It gives an accurate picture of available inventory, fast-moving items, and dormant items. Such insights can be invaluable for procurement decisions and demand forecasting.
With OMS system, order processing is more streamlined and error-free. From verifying the product availability and reserving it for the customer to initiating the picking process – every step is automated, ensuring quicker and more accurate fulfillment.
Streamlining Operations with Order Management Software
Order Management Software is designed to reduce manual interventions and errors and speed up the supply chain response to the customer’s orders.
Consider a scenario where a product is available in limited quantities across multiple warehouses.
An intelligent order management solution can determine the best warehouse to ship from based on proximity to the customer, shipping costs, and delivery timelines.
It can also split the order quantities if needed. Such automation optimizes shipping and ensures on-time delivery – a critical factor in ensuring customer satisfaction.
With the increasing emphasis on omnichannel retailing, order management software provides a unified view of inventory across all channels.
This ensures consistent brand experiences, accurate inventory counts, and the ability to fulfill orders from any sales channel.
3 Benefits of Integrating Order Management Solutions in Warehouses
Warehouses are the heartbeats of today’s supply chain. Hence, warehouse efficiency gains can significantly improve a company’s bottom line and customer satisfaction. Integrating order management solutions offers several such advantages:
Efficient Inventory Management
Inventory management is a tricky balancing act. Tip too far in one direction, and you’re sitting on costly overstock. Swing too far the other way, and stockouts can leave customers disappointed.
Here, an OMS acts as the fulcrum that brings balance. These systems can provide insights into inventory movement patterns by maintaining real-time track of sales and stock levels. Predictive analytics systems on top of OMS can further assist in better demand forecasting, ensuring optimal inventory levels.
Seamless Order Processing
In a traditional setup, order processing involves many manual tasks – checking stock levels, assigning pickers, and managing shipping.
These, when done manually, are prone to errors. With the integration of an OMS, these processes become automated. As orders stream in, the system automatically assesses inventory, assigns picking, and streamlines the shipping process.
The result? Orders are processed much faster, without any errors.
Enhanced Customer Satisfaction
It’s an age-old saying – “Happy customers lead to a thriving business.” Efficient order management is a catalyst for customer happiness. When orders are processed swiftly and accurately, delivery times are shortened.
And when customers are informed of their order status at every step and receive their orders on or before the promised time, their trust in the brand deepens. Efficient order management, thus, leads to faster deliveries, fewer errors, and ultimately, happier customers.
3 Features to Look for in an Order Management System
With the benefits of integrating an OMS into warehouse operations, the next focus is the proper OMS selection. But how does one filter through so many options in the market? Here are some key features to prioritize:
Real-time Analytics
Decisions based on stale data can be detrimental in the ever-fluctuating logistics landscape. Hence, a robust OMS should provide real-time analytics. Such analytics offer insights into many patterns, like sales, inventory levels, and potential bottlenecks, empowering businesses to make informed decisions on the go.
Multi-channel Support
Modern consumers shop through online stores, marketplaces, physical stores, and even social media. A competent OMS should seamlessly integrate with all these channels, offering a unified view of orders and inventory.
Integrations with Other Software and Systems
An isolated OMS is like a fancy car without fuel. For OMS to function optimally, it needs to integrate with other systems like the Warehouse Management System (WMS), Enterprise Resource Planning (ERP) software, and Customer Relationship Management (CRM) tools. Seamless integrations ensure that data flows unhindered across systems, optimizing operations.
3 Future Trends of Order Management in Warehousing
In a world where technological advances reshape industries overnight, staying abreast of the latest developments is paramount.
In warehousing, the next frontier is defined by more intelligent, integrated, and dynamic order management systems.
Following are the 3 future solid trends for the OMS:
AI-Driven OMS
AI is getting practical implementation in all business areas now. The same will happen to modern supply chains and procurement. The next-gen OMS will harness the power of AI for an array of functions.
From predicting demand spikes and potential supply chain disruptions to forecasting warehouse workloads and initiating predictive picking, OMS will enable a new dimension for businesses.
Augmented Reality (AR) Assisted Picking
AR tech in warehousing is more accessible than ever, and its integration into OMS will revolutionize picking processes. Warehouse staff, guided by AR visuals, can expedite the picking and packing process, reducing errors.
OMS and IoT devices integration
The Internet of Things (IoT) devices connect to allow for real-time information. Integrated within OMS, it can provide instantaneous updates on the location, condition, and estimated arrival times of shipments, ensuring complete visibility.
Final Thoughts
Warehousing has undergone seismic shifts over the years, with order management emerging as its epicenter — from ensuring timely deliveries to optimizing inventory and enhancing customer satisfaction.
But it’s not just about adopting any OMS but about investing in an adaptive, forward-looking, and robust, future-ready solution.
For businesses that really want to stand out, an investment in a top-tier order management solution promises a warehousing operation that’s not just streamlined but genuinely transformative.
Not only does it offer all the features we discussed above, but its user-friendly interface, investments for the future, and robust support make it a go-to choice for warehouses aiming to elevate their efficiency.
