An order management system (OMS) assists businesses in organising and streamlining the order fulfilment process across the omnichannel supply chain. There are both together like hand and glove as it helps smoothen the company’s operations.
In running an online or web-based business, one of the most essential things we need to know with certainty is the mindset of the consumer.
We’ve all been there countless times. All of us are also consumers and the thing that irks us the most as a purchaser is late deliveries.
Now, we look at this issue from the other end of the table. We are now the provider – the one that will potentially incur the wrath of the angry consumer – if we screw up an order.
This is why a fully-functional and seamless order management system (OMS) is the most important thing for an online business. It is in fact the thing that determines the “make or break” nature of the entire business.
What is fulfilment and OMS about?
The order management system (OMS) is a way to manage the lifecycle of an order that’s done digitally. The system tracks all the information and processes including the order entry, inventory management, fulfilment right up to after-sales service.
A good OMS offers visibility to the business and the buyer – the former will have insights into inventory and the latter is able to check when an order will arrive.
In a simple manner of speaking, order management is a lifecycle that starts when a customer places an order and ends once they receive their package or service. With this system the business is able to coordinate the entire fulfilment process — from order collection, inventory and delivery visibility to service availability.
The workflow involved can differ from company to company, but a typically the process will involve these three steps:
Step 1: Placement
Customer places an order (through an automated form) which is checked and confirmed.
Step 2: Fulfilment
The warehouse confirms the shipping details, generates an invoice and fulfils the order — pick, pack and ship.
Step 3: Inventory management
Inventory levels are monitored constantly – they fluctuate according to demands.
Why is order management important?
Just as in digital systems used by online businesses, OMS touches virtually all the processes in the supply chain. This is even more so when companies do not just contain their order management within their organization. These days they involve multiple partners, for example parts and components suppliers, assembly and packaging services or the big distribution centres. In this complex web-like network, it’s easy to lose visibility and ultimately – control of an order. Without a cloud-based OMS, costly manual processes to complete orders may well be incurred. An OMS helps to control costs and generate revenue by automating the processes that were done manually before; eliminating errors.
When OMS runs well, brands look good
Outside of the business, order management directly impacts how the consumer perceives the efficiency of a business. In today’s omnichannel environment, the customer expects their purchasing experience to be nothing less than seamless. For instance, a customer who orders online may have questions and opts to engage customer service through a call centre. On top of that, the customer expects to have access to updates along the process (for example via email updates) Additionally, if a problem crops up, the customer might want to return the product at a physical channel such as a store. For the business, each point is also an opportunity to provide the customer with a great experience and boost his or her retention and hence better revenue.
Ultimately, the omnichannel journey is also where businesses can capitalize on up-sell and cross-sell opportunities.