Why is Order Management So Important?
Thursday, September 6, 2018

Why is Order Management Important?

Retailers thinking about starting an omni-channel strategy often start with the e-commerce system. We often see major overhauls. From old custom coded solutions to systems like Salesforce Commerce Cloud, Episerver, BigCommerce, or Shopify Plus. Order management is often a secondary element. Yet being the hub, main co-ordination engine, and center of all integrations makes order management important.

An order management solution is the key element of unified commerce (converged commerce). In fact, it is often the main system of record for customer data. It is key to customer service. It is central to the ordering process. And of course, don’t forget the real-time hub for stock levels feeding inventory visibility to digital channels.

Why is order management important? It brings together all channels into one cohesive brand experience. What makes order management important is the comprehensive tracking, optimized order orchestration and fast order fulfillment. This should not be done manually for chains with more than 20 stores and digital channels. It also cannot be left as an afterthought.

Supply Chain View 

What makes order management important is the comprehensive tracking, optimized order orchestration and fast order fulfillment.

Five core parts of a distributed order management (DOM) system are:

  • Inventory Visibility
  • Order Orchestration (in-store pickup, pick pack lists …)
  • Order Routing (optimal ship-from location following business rules …)
  • Returns Management (basic returns, instant re-inventory …)
  • Advanced Functions (analytics, simulation, pre-orders, ship rate brokering …)

A solid DOM helps a merchant make the best order fulfillment decisions. That means being the central real-time intelligence on all inventory. This goes beyond just showing warehouse inventory. It means knowing and managing pools of goods. The system creates a central point of reference. This with supply information from stores, warehouses (DC), 3PL’s, drop shippers, and inbound & outgoing inventory. It also tracks in-store sales (from POS), product movements, digital sales (online, mobile, voice, text, and social sales), and returned inventory. With all this minute-by-minute information, the DOM routes orders to the ideal fulfillment location. This can be the most efficient, least costly, or fastest delivery option. These based on pre-defined business rules and priorities set by the retailer.


Related: High RSO Ratio Killing Your Retail Efficiency? 

Distributed Order Management

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Is This For Enterprise Retailers Only?

Wow. There is quite a bit of complexity to a DOM. It manages thousands (millions) of moving parts. But, isn’t this just for very large retailers? Simple answer: NO.

All of today’s retailers need to provide an excellent customer experience. If you don’t, someone else will. Part of today’s shopping experience includes omni-channel sales. Customers expect this level of flexibility from retailers. Remember, that’s why you are taking on this project. To do this effectively, even a chain of only 20 stores and an e-commerce site need automation.

Presume you are planning to process only 7,000 or 8,000 orders per month. First, you need a system that can handle this typical volume. Second, you need to be confident it won’t choke on Black Friday. Order volumes can spike 50x typical volumes. Are you ready for this? Third, you need a system that can handle all this complexity, with all the features of the big enterprise retailers. At the end of the day, customers have an expectation of your brand. And, they see all retailers alike, regardless of size.

Will the Real OMS Please Stand Up Whitepaper

OK – So How to Select?

If you are considering improving your omni-channel retail strategy - you cannot do this without an order management systemSelecting an order management system (OMS) from so many vendors is challenging. When choosing, consider several points. First, is your current platform giving you enough flexibility? Is it easy to use, and more importantly easy to change, configure and adjust? If you need to call a coder or consultant for any of these; STOP. You need a better solution.

Thinking about starting or improving your omni-channel strategy? Don’t even think about it without an OMS. Think through the features you will need, before starting your discussion with vendors. Consider ease of integration with your existing technology. Then think about the features that already come with the system. You will definitely want easy-to-adjust order routing business rules. Also think about rule prioritizations, an in-store application for pick-pack and a few other advanced features. If you want to add ship-from-store capabilities, then consider order consolidation as a high priority. After that, additional money saving features like a shipping rate broker – can be a huge asset.

Finally, you DON’T want a system that does magical things, that your people don’t understand. When an order gets routed, you need to be able to get see why an order was shipped from a location. Also closely related, your team needs to be able to change rules and priorities on the fly. It has to be out-of-the-box technology. You definitely want an easy no-coding environment. Look for depth, yet with flexible and configurable (not custom coded) technology.

Why is Order Management Important?

So, is order management important? Yes, it is. It is a reflection of your brand to your customers. It is a background technology. No shopper will ever see a systems administrator screen. But the background functions of quickly and effectively fulfilling orders – reflects on your brand. It reflects your company. It reflects your business capabilities.

If you need help with your selection – please take advantage of our numerous helpful reports, briefs, and articles. You can find all these on our Resources page, and it is all free.

Given that order management is important and can be confusing, we are happy to speak in person. Contact us either for a demo or just to ask a few questions. We are always delighted to speak with retailers and brands thinking about starting their journey.



Author: Charles Dimov, VP of Marketing at OrderDynamics

Charles Dimov is the VP of Marketing at OrderDynamics. Charles has 21+ years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, Director Sales and Category Management for ecommerce and channel goods. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics.