For any eCommerce retailer, the value of strong order management procedures cannot be overstated. Arguably nothing is more important or impacts as many different areas of a merchant’s business.
Maximizing order management is not something that happens overnight, however. Many growing brands struggle with ongoing issues that run the gamut from overwhelmed and outdated software to fulfillment processes rife with human errors.
Nobody said it was going to be easy.
There is light at the end of the tunnel, though, and solutions do exist. Once merchants identify where the breakdowns are occurring, the labor can begin developing order management processes that do exactly what is needed to correct them.
At SkuNexus, we work with each eCommerce business to create an order management system (OMS) for their wants and needs. No two are the same. Every merchant has unique challenges and so requires a unique solution.
That said, regardless of the merchant or the issues faced, the ultimate value created from these solutions can be very similar. Optimized and efficient eCommerce order management will have a profound influence and here we’d like to share with you some powerful examples of that.
As a merchant’s sales channels and order volume increase, everything needs to happen more quickly.
The first step is aggregating orders within the OMS - immediately collecting and organizing them into a single, cohesive place. By then routing orders to the optimal locations (proximity to customer, in-stock inventory) automatically, delays related to manual decision-making or restocks are eliminated.
Any slowdown or mistake in any area can have a ripple effect that creates impediments elsewhere in the order fulfillment process. For example:
- Manual recording at receiving postpones putaway which means items reflected in inventory are not where they need to be for picking.
- Lack of synchronization between disparate software systems causes orders to be sent to the wrong fulfillment location.
- A disorganized packing station creates a logjam of orders and delays shipping.
By the same token, the correction of errors via implementation of good order management procedures will yield fulfillment operations that function much more efficiently.
- Items are scanned into inventory at receiving. Directed putaway is controlled by the warehouse management component of the OMS. An integrated inventory management system knows exactly where items are located and picking is carried out efficiently.
- Total synchronization between seamlessly integrated systems means orders are routed correctly and immediately once a customer places an order.
- An organized packing station knows what is needed for each order, packs it accurately, applies a shipping label, and sends it out on a carrier.
All backend operations that comprise fulfillment benefit from proper order management and, in turn, will be accomplished more quickly. This increased speed can only serve to help a business as it evolves and grows going forward.
We spend so much time thinking about and addressing the issues of our clients that it’s easy to overlook the extended value of the solutions. For one, the benefits of optimized order management can have an enormous impact on your customers - their experience, their satisfaction and their ultimate relationship with your brand.
This can be achieved in any number of ways.
- Fulfillment Speed: Few things delight a customer more than quickly receiving their online purchase, or better yet, being notified of an earlier-than-expected delivery date.
- Order Status Updates: Accurate notifications provide reassurance about the stage of a customer’s order. These can be automated or from a brand’s customer service team.
- Order Accuracy: An organized system reduces errors in processing and ensures the customer receives precisely what was ordered.
- Customer Loyalty/CRM: The ability of an OMS to aggregate order data provides additional opportunities for merchants to engage with customers during the process.
Going further, a full range of other options is now considered a de rigeur part of maintaining customer satisfaction and providing customer service. Offering BOPIS, guaranteeing 2-Day shipping, or even creating a personalized unboxing experience demands an eCommerce business has the fulfillment organization in place to make good on the promise. Such performance is only possible with an order management system flexible and customizable enough to accommodate and execute at this high level.
While reducing errors is always a goal of any business, the accuracy and control afforded by an OMS make this very achievable.
It begins with order routing. Orders will be routed to the proper warehouse with the item in stock. Some orders may need to be sourced and fulfilled across multiple locations, and can even require 3PLs or dropshipping. In the absence of well-defined parameters and “waterfall” decision-making rules to check inventory in multiple locations and route the order accordingly, the risk of human error is huge.
During fulfillment, increased speed is highly desirable, however speed without accuracy will only lead to faster errors. The direction an OMS provides through pick/pack/ship can virtually eliminate errors in order processing.
- Order line items automatically flow into controlled pick lists and must have the proper items selected to proceed.
- Highly-detailed product information and barcode scanning during picking ensure the right items will be picked for the order.
- Automated order-specific determinations re: parcel, insulating materials, and documentation will be made, and directions provided to the packer, during this stage of the process.
- Shipping decisions will be made, and shipping labels printed, automatically. The customer’s shipping address is already associated in the system. Once the order is packed, the label can be applied and the parcel is ready to ship.
All of these functions are the benefits of having information collected electronically from the beginning of the order process and then distributed into a comprehensive fulfillment software.
In the midst of chaos, there may indeed be opportunity, however nothing will be accomplished long-term if that chaos remains unresolved. This concept applies quite well to order management and an eCommerce merchant’s employees.
The potential for backend disarray only increases as a business starts to grow, and the implementation of an OMS to rein it in will yield dividends with workers throughout the enterprise.
- Manual order routing decisions are eliminated.
- Orders are easily viewable and organized in a grid format. This allows for editing, filtering, and tagging as an order moves through the fulfillment process.
- Individual orders may be selected for immediate picking, packing, and shipping by the proper fulfillment method.
- Overall OMS ease-of-use and organization improve job satisfaction.
Another critical component of employee performance is having clearly defined roles, goals, and responsibilities, and this is also a key element of order management. By eliminating vague, confusing, or irrelevant information, the OMS provides employees with clarity about exactly what is expected of them.
Contentment in the workplace is a function of many different factors, not the least of which is stress. Confident workers in a largely error-free fulfillment center will have less tension, disagreements, and strife-filled situations.
A well-disciplined workplace inspires workers’ physical confidence, as well. Employees prefer environments that are not only organized and free-from-conflict, but also safe. This cannot be ignored. A warehouse full of people, vehicles, loaders, lifts, etc., can provide many opportunities for accidents. Without a management system directing the movements and flow, the potential for mishaps increases significantly.
Reduced Business Costs
It should come as no surprise that a strong order management system will save money in the long run. Any model that increases efficiency and employee productivity will reduce business costs, by definition. However, it can also impact the bottom line in other ways.
Inventory carrying costs can typically amount to 20-30% of the total value of stored goods. Global supply chain issues have certainly made projecting and planning in this area a challenge and created even more need for inventory accuracy.
As part of an OMS, strong inventory management can help merchants maintain as little inventory as necessary as well as automate re-ordering to avoid the potential for manual error.
In addition, depending on the items in question, a retailer may wish to hold no inventory whatsoever and instead outsource fulfillment entirely to a dropshipper. The OMS can help make decisions and execute these orders automatically.
Error reduction during fulfillment can have a profound impact on costs, as well. While order returns are inevitable, the accuracy an OMS provides will drastically reduce those items returned due to mistakes made at the warehouse.
At SkuNexus, we build comprehensive software solutions to address the full range of eCommerce challenges. This was the 2nd of a 5-part series on order management and up next will be multiple articles on both inventory and warehouse management.
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