Supplier database in Excel, working in several windows at a time as well as manual invoice processing leads to confusion, errors and lost profits. According to The Future of Fulfillment Vision Study, 55% of retailers still use manual processes to manage logistics. The order management system eliminates workflow tasks and reduces error risks.
Order Management System (OMS)
OMS is a platform to track sales, orders, inventory and order fulfillment. It automates the entire cycle of business processes and allows the processing of any order flow in a single window.
Businesses - retailers in particular - use OMS to streamline and automate the sales process and order fulfillment from the point of sale to customer delivery.
Order Management System accumulates the following information:
- order placement;
- payment methods;
- shipping methods;
- returns;
- user order history.
Modern OMS is an interconnected ecosystem allowing retailers to automate internal processes from placing an order to its fulfillment.
OMS system – how it works and what tasks completes
Order management starts when a customer places an order and ends when they receive a delivery. OMS allows a company to coordinate the entire order fulfillment process from order picking, inventory, and delivery control to service availability. The workflow varies and depends on the company's needs, but a typical order management process involves three steps:
- Order placement. The customer places an order via an automated form. A sales person checks the details and confirms the order.
- Order Fulfillment. The warehouse employee confirms the delivery details, generates an invoice and fulfills the order: collects, packs and ships.
- Inventory management. Inventory levels are controlled to meet business needs fluctuations.
OMS allows you to manage an order throughout the entire life cycle, from placement to fulfillment and return. It provides a wide range of functionality that helps you manage people, processes and order fulfillment integrations from any sales channel. Experts, such as the IHL group, see order management systems as central to all merchants trying to achieve unified commerce.
The system helps retailers manage inventory across multiple selling channels. Managing inventory through multiple channels is the third biggest challenge for supply chain leaders. Tracking volume, speed, and omnichannel fulfillment overwhelm your business if the right groundwork for scalable growth is not provided. This solution is designed to help 43% e-commerce brands planning to improve their inventory management process over the next two years.
The OMS system reduces the human factor.
For example, if an employee filled out a certain field incorrectly or did not enter the required data and the order went into processing, configuring validation can be of use here. It automatically checks the changes the user makes. If there is something wrong, the employee is informed.
The OMS-system solves the following:
- workflow automation. For example, the system generates invoices without manual filling reducing the error risks;
- warehouse work improvement. Managers see the current warehouse balances in a single window. This, for example, allows you not to waste time calling warehouse employees to clarify the availability of the goods;
- the order management system combines data about each client into a single profile and helps you see the customer's purchase history and make relevant personalized offers. This increases marketing efficiency and leads to increased profits.
Choosing Best Order Management System
Considering OMS, it could be difficult to make the right choice. Many companies offer various system characteristics and the point is to determine the necessary features, not the minor ones.
We have identified the main areas to keep in mind when choosing a solution:
- Integration opportunities. The OMS system should not only integrate into most online stores with proper order management, but also support the information exchange with other site elements - payment and delivery modules, and others.
- Multichannel. The OMS system should preferably concentrate on various sales channels: websites, marketplaces, social networks, and so on. This feature allows to consolidate all data and make a single trade analysis interface.
- Scalability. The trade business size is rarely stable, especially if it is an online business. The OMS-system should allow processing of a much larger order flow than the current one.
- Forecasting and reporting. A good OMS helps analyze sales and notifies upcoming problems. For example, by tracking the order status dynamics the system forecasts the lack of goods in a certain time frame.
- Automation. The OMS order management system should save time and lead to staff reduction. Automation simplifies complex purchase procedures, analyzes the stock balance and generates regular reports.
- Personalization. The APIs of the OMS system must be available for other site modules integration. Some useful applications should be installed within a month or a year in the online store.
The Leafio Inventory Optimization is designed for order management throughout the entire life cycle. The Leafio implementation results in automatic order quantity calculation, automatic order generation and dispatch, automatic order editing based on the supplier’s feedback and order fulfillment control as well as clear and structured business process workflow with orders that benefit both the Line Manager and the Head. The management process becomes less resource-intensive and more efficient - managers are freed from routine tasks. The goods availability increases, overstocks are reduced and turnover is improved due to the accurate demand calculation.
Summing up
- The order management system is a digital way to manage the order life cycle. It tracks all information and processes, including order adding, inventory management, fulfillment and after-sales service. OMS provides transparency for both the enterprise and the customer.
- OMS is a requisite solution for every company with non-automated or manual goods accounting. Businesses benefit from OMS by streamlining the order fulfillment process. It manages everything from point of sale to delivery. E-commerce merchants especially benefit from OMS leading to automated logistics, shipping, returns, and marketplace interaction, including popular platforms like Amazon, eBay, or AliExpress.
- OMS helps control costs and generate profits by automating manual processes and reducing manual errors.
