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All-in-One Order Management System: The Aha! Moment

Derrick Weiss
December 4, 2018

The technological revolution represented by your phone cannot be underestimated. Think back 20 years and consider how much space it would take to get all the functions of a modern phone into one room:

  • a vacuum tube TV
  • a corded house phone
  • a tape recorder
  • an AM/FM Radio
  • the latest phone book and TV Guide
  • the Encyclopedia Britannica
  • the Oxford English Dictionary (which takes up whole libraries by itself)

And there's a lot more - but you probably get the point.

Order management systems were built for the same reason the smartphone was built - to consolidate hundreds of functions and vast amounts of information.

Think for a moment of your current order management system (OMS).

What does it look like? Even if you’re fortunate enough to have it all reduced to software, what does your desktop look like? How many tabs do you have open? How long does it take each day to organize your files and processes to get to work?

Unless your OMS is completely consolidated, then what comes to mind is probably a lot more like that room full of antiquated devices than a smartphone.


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Vulnerabilities of Standard Order Management Systems

No matter what kind of business you’re in, you have some kind of way to track incoming orders.

Even if you’re a kid with a lemonade stand and you’re keeping track of orders in your head, you still have a method of doing that.

These systems are as old as commerce itself, and have continuously grown in complexity. For that reason, they’re pretty hard to visualize.

Just do a Google image search for order management systems (or click this link) and you will see a lot of lists and flow charts and software - no devices- certainly nothing that you can hold in your hands.

That's because the average OMS is a relatively ephemeral thing - and few business owners put much thought into it until a problem arises.

The purpose of an OMS is threefold:

  • to boost efficiency
  • improve customer satisfaction
  • reduce fraud

These tasks are handled in a variety of ways - often with whole departments dedicated to each. That’s massively inefficient for smaller businesses.

Worse yet, these disparate departments are frequently isolated from one another, each lacking the language or technology to speak to each other about their problems. 

If you have a problem with efficiency, that can have a negative impact on customer satisfaction*.

If your customer satisfaction problem is caused by inefficiency, then you may try to approach the problem from the wrong angle. 

Sluggish order processing times, for example, can be an efficiency problem.

So, if you had a customer who got his package a week late due to an inefficiency, you might try to fix the problem by cracking the whip on your customer service department. This might result in faster deliveries - but it will strain your staff and your system because it addresses the symptoms, not the true problem.

An integrated system, on the other hand, would see the connection between the inefficiency and the slow delivery and fix the problem rather than just treat the symptom.

That’s one of the key reasons an order management system exists.

Building an OMS the Old Fashioned Way

If you’re like most business owners, you assembled your order management system on an as-needed basis.

Starting from a pen and paper, moving on to spreadsheets, possibly to hiring a small team of accounts management people - you deal with your needs as they appear.

This is normal. Necessity is the mother of invention.

However, if your business has been growing, and you’ve carried on expanding your OMS in this ad hoc fashion- chances are you’ve ended up with something that looks a lot like that pile of antiques we described earlier.

For new businesses, those with high revenue/low volume sales, and those with highly specialized or customized products - this is the norm.

Businesses of all kinds can go on for quite a while without running into obvious problems. But when the system finally does get in over its head, it can feel like hitting a wall.

Some of the most common pain points include;

  • order fulfillment becomes excessively time-consuming
  • different employees have different processes for inventory or fulfillment
  • customer satisfaction begins to suffer
  • inventory count errors, back orders, and lost orders start piling up

Any of these common problems can start to build up at low levels of resolution that are hard to detect.

This can lead to sudden breakdowns that trigger the loss of major accounts, or worse. In a worst-case scenario, the result can be catastrophic - damaging your process, your team, capital, and your brand reputation irreparably.

The Integration Solution

The average non-integrated OMS powers 80%* of the mission-critical functions of a business. At present, this is the standard.

The goal of integrated systems is to improve on that. By shedding light on some of the obscured disconnects we mentioned earlier, improvements are inevitable. 

When switching to an integrated OMS solution, your first step is to develop an awareness of your primary pain points. That is to say, know where your process is most hindered.

Is it efficiency, customer satisfaction, or loss prevention?

This pain point will be your primary reason for switching to an integrated system. It will also form the basis on which your new system is designed.

This is where SkuNexus comes in (get a demo here).

Our goal will be to help you identify your primary pain points and work with you to develop a system concept and choose an installation process that meets your needs perfectly.

By designing your integrated OMS around the key vulnerabilities of your business model, you can obtain a system that is fully optimized to improve your process

You should begin by auditing:

  • Accuracy of inventory count
  • Fulfillment functions and processes
  • Warehouse locations (physical warehouses and product locations)
  • If your vendors are integrated with your systems
  • How shipping decisions are made

From there, begin the process of documenting the outcome you want, and any perceived inhibitors to that outcome. Begin conceptualizing the tools you would need to remove those outcome inhibitors.

After that, schedule a demo of our groundbreaking open source order management software, which has helped our clients reach 100% automation of all of their orders.

You can see a case study here >>

*Sources:
https://www.investopedia.com/terms/o/oms.asp
http://smallbusiness.chron.com/effects-bad-inventory-business-20374.html
https://www.forbes.com/sites/stevebanker/2017/05/31/distributed-order-management-solutions-are-not-just-for-retailers/#33785a6360df

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