What Is Order Management?

By Indeed Editorial Team

Published April 20, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Marketing strategies put tremendous pressure on supply chain logistics to help attract and retain new customers. When these customers are empowered with the latest technology, the logistics processes involved in order management grow even more complex. In such situations, it is important that you understand the order management process and learn how to optimize it for your customers. In this article, we discuss order management, its importance for your business and provide examples for some of the most commonly used OMS tools.

Related: What Is Supply Chain Management?

What is order management?

Order management is the end-to-end process of receiving, fulfilling and tracking an order placed by the customer. The process begins from the moment a customer places an order till they receive their package or services. It also involves the after-sales experience and handling of any relevant returns.

Why is order management important for businesses?

Order management involves multiple processes and workflows. When you have a well-planned order management process, it will give insight into your business's different functions and help you provide a better customer experience. It can save time and money by allowing you to forecast demand, minimize fulfillment errors and make data-driven decisions.

A significant benefit of using an order management process is that it can help you forecast the demand. Predicting your demand will help your business avoid overstocking and understocking because you have a clear idea about the required amount of products to supply to your customers.

All the workflows, from accepting orders and keeping track of them to fulfilling the orders and taking care of the post-sales activity, are part of an order management process. An effective order management process impacts every system and process in the supply chain.

What is the order management lifecycle?

The order management cycle oversees the processes involved in fulfilling every order right when the customer places an order until they receive the package. The process flow can differ based on a company's need, but they typically follow these five stages of the order management cycle:

1. Receiving an order

The first stage of the order management process begins when the customer places an order with your business. Receiving the order involves accepting the order placed by the customer and collecting payment for it. The order details are then sent to the warehouse to get the product ready for shipment.

2. Processing the order

In the second stage, the order will be processed depending on whether you're doing it all in-house or using a third-party service. If you are handling the order processing in-house, orders will need to be manually updated as they move through each of the steps of the fulfillment process. It's essential to educate your team on the ins and outs of your order management system and have processes documented to stay consistent and eliminate the chances of error. However, if you use third-party services for order processing and fulfillment, ensure that they can be integrated into your current CRM, ERP and other relevant systems.

3.Picking and packing the order

This step involves picking and packing the correct items in an order. The packing process consists of choosing the suitable packaging material, weighing the package and labeling its packing slip. This ensures that the resources are utilized effectively and the customers receive the orders in good condition. At this phase, care must be taken to ensure that the right products are sent to the right customers as efficiently as possible. In this part of the process flow, you'll want to implement automation or streamlined processes to improve your speed and accuracy.

4. Shipping and tracking the order

Once the correct item is packaged, the next step would be to ship the order. Each order is assigned a specific tracking number which is also shared with the customer. This allows the customers to track and check the status of their orders. The actual delivery of the product will be handled by shipping carriers that you've priorly selected.

5. After-sales experience

The last stage of the order management cycle is handling the after-sales process. Here, the business follows up with the customer to receive feedback and manage any returns and refunds if applicable. The after-sale experience can help you to build lasting relationships and convert existing customers into repeat customers.

You can provide better post-sale services by following up with customers through surveys or check-in, custom packing and easy returns and refunds.

What is order management software?

An order management software is a software or platform that helps you manage orders from every sales channel and seamlessly coordinates the order fulfillment process across all the customer touchpoints. These software applications are usually integrated within the larger ecosystem of CRM and ERP systems. These tools bring the gap between order acceptance, processing, tracking, accounting and business intelligence. Order management software helps organizations of any size or scale in the digital economy to manage the supply and demand for their products at the right time in the right place. An order management system can help remove bottlenecks for you as your e-commerce store grows.

Examples of order management software

Every company is unique and have their own specific needs, so a one-size-fits-it-all product won't help in most situations. Here are some of the most popular order management solutions available in the market:

NetSuite

NetSuite's SuiteCommmerce is a powerful tool that offers various features, including an order management system that can handle orders from diverse channels, including brick-and-mortar store, online store, or even a kiosk.

Salesforce Commerce Cloud Order Management

Salesforce Commerce Cloud's order management software delivers the end to end shopping experience from buying, servicing to fulfilling with real-time inventory visibility, order lifecycle management, and more powerful features

IBM Sterling Order Management

The IBM Sterling Order Management tool helps your business accelerate the transformation to deliver more innovative omnichannel order fulfillment. This platform provides an intuitive interface with easy-to-use functionality. There are several configurable features such as real-time inventory management, through to fulfillment, powering exceptional customer experiences that grow sales while improving profitability.

Skubana

Skubana is a platform that specializes in helping complex businesses fulfill orders from omnichannel and multiple warehouse locations. It helps to consolidate and bring together all the items for sale into a single place. Skubana also offers in-depth reporting and analytics functionality and allows you to automate several order management processes.

Please note that none of the companies mentioned in this article are affiliated with Indeed.

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