Is your retail/ecommerce business or brand considering an order management system but is unsure which OMS features to look for?
These top 5 capabilities included in modern OMS software can instantly extend your reach to multichannel shoppers while delivering ultimate consistency, control, transparency, and profitability to your process.:
- Automated order fulfillment
- Drop shipping
- Right inventory by channel
- Automatic order routing
- Pre-ordering (pre-selling) inventory
Let’s deep-dive into these top OMS features.
Automated order fulfillment
What manual decisions should I automate to empower workers?
Why it matters
As many as 80% of customers will pay more for a better customer service experience. Meanwhile, 75% of customers have stopped using an organization’s services because of a poor one. Not empowering the correct staff, such as customer service or warehouse employees, to make key decisions leads to customer frustration. Not to mention the loss of labor, which is difficult and costly to replace.
Automated, real-time visibility into customer orders creates a consistent and seamless shopping experience, faster fulfillment times, and smarter labor management. That’s because there’s no need to manually review each customer order.
What to do about it
Enable workflows that empower staff to make decisions based on interactions with customers. The proper staff must be able to take manual action, when necessary, to ensure that orders are correctly reviewed and validated.
Automated order fulfillment features in OMS use business rules to handle the heavy lifting of evaluating customer orders as they come in. This accelerates fulfillment times, reduces shipping costs and errors, and redeploys labor investments toward more strategic activities that speed up value for customers.
For example, staff can configure automated rules to determine the optimal order fulfillment method. Armed with the right data at the right time, employees can play an active role in offering multiple fulfillment options – such as buy online ship direct, buy online pick up in-store (BOPIS), buy online return in-store (BORIS), exchanges and returns – pleasing both customers and your bottom line. Related:
Drop shipping
How do I start drop-shipping orders?
Why this matters
Drop shipping is one of the best OMS features. Without an OMS in place to maintain drop-ship partner data, you must depend on user-driven manual processes. These include tasks like emailing drop-ship partners or third-party logistics (3PL) partners, to determine if an item can be drop-shipped and from which partner.
Communicating with drop-ship partners typically takes place via email, a process way too slow for today’s omnichannel consumer standards. As a result, you may carry more inventory, pay higher shipping prices, or see slower fulfillment times because your visibility into additional options is limited.
What to do about it
Real-time order fulfillment data in the cloud is critical to enabling the drop-shipping OMS feature. Staff can quickly compare drop shipping options (what products can be drop shipped, when, and from what partner) and determine the best method.
The OMS system then sends products straight to the consumer from the manufacturer, distributor, or supplier.
Connecting drop shippers with an OMS through an EDI connection provides inventory visibility into additional fulfillment options. This automatically validates all options and dramatically improves order fulfillment.
For example, let’s say an item can be fulfilled by 3 different drop-ship partners. The OMS feature automatically shows which partner offers the cheapest or fastest shipping. If an item is in stock at a store, it may be better to fulfill the order from there.
The OMS may also divide multi-item orders amongst stores, DCs, warehouses, or suppliers automatically to ensure the best possible cost and speed.
Right inventory by channel
How do I make sure I have the right inventory represented by channel?
Why this matters
Processes that were traditionally set up for wholesale operations must now be re-examined to handle Direct-to-Consumer (DTC) workflows.
Maintaining available inventory across different channels is extremely difficult because each channel’s inventory needs to be maintained individually. Legacy order fulfillment and ERP workflows keep your staff in spreadsheets all day, while still turning up errors and poor decisions. Plus, these processes only offer visibility at a CASE level, while today’s consumers often place orders at a single-unit (EACH) level. Get more consumer-direct fulfillment strategies.
Orchestrating orders with a manual, user-driven process will breed inaccuracies, overselling, backorders, and customer frustration. When you consider a BRP report, which found that 63% of consumers are likely to stop shopping for a brand after just ONE unsatisfactory experience, the risk is too costly to ignore this OMS feature.
What to do about it
Automate communications to the sales channel’s commerce system(s) to represent the properly configured available-to-sell inventory levels for every item, from various inventory sources.
See what’s available (at all times)
OMS features facilitate inventory segmentation where available-to-sell quantities can differ between sales channels based on configured rules. They show the most up-to-date available inventory quantities to your customer base, calculating what’s available and pushing that up to the appropriate sales channel(s) via the cloud or your website.
Here’s a great example of how retailer Psycho Bunny built an omnichannel fulfillment network in stores, trimming 3 days from order processing times and increasing available inventory by 20%.
Sell on multiple channels
Inventory segmentation is one of the most important OMS features made possible by the system’s enterprise-wide visibility.
Segmentation allows you to sell on multiple channels like Shopify and Walmart to target allocation of inventory to certain channels.
For example, you could allocate more inventory to the Amazon channel around their Prime Days. Or, allocate to a specific store or geography where sales are higher, to gain a competitive advantage. See an example with Vinyl Me, Please
Automatic order routing
How do I automatically route orders to ensure availability in complex situations, such as alternative fulfillment sources, split orders, and exceptions? Am I routing orders properly?
Why this matters
Without automated order routing, user decisions on where to route an order for fulfillment are driven largely by “tribal knowledge” and subjectivity. There’s no optimal way to confirm inventory availability across all fulfillment sources without manual actions.
Here, exception handling requires legacy communications via email/phone between different teams within the organization, such as customer service and warehouse staff. The more complex your fulfillment network, the harder it will be to properly route orders, and the bigger the impact.
What to do about it
An OMS feature like intelligent order routing unlocks huge bonus points with customers. The ability to fulfill orders from alternative sources, such as retail stores or third-party partners, with centralized and automated communication every step of the way, will become table stakes as you scale.
OMS order routing uses configurable business rules to determine the optimal fulfillment source for the lifecycle of an order, from order placement to shipping.
You can also easily manage order exceptions, such as a price mismatch or inventory discrepancy, to fulfill orders seamlessly by the planned ship date. If an order must be split and shipped from separate sources, events-based order orchestration kicks in to provide visibility and tracking for both shipments, managed as a single customer order.
Best-in-breed OMS features offer coordinated visibility into order routing results. So you can tweak routing rules and keep improving over time.
Pre-ordering and pre-selling inventory
How can I enable the pre-ordering OMS feature to better understand demand early and improve inventory management?
Why this matters
Manually managing pre-orders requires that you handle the availability of pre-ordered items directly within the commerce system(s). Without a clear picture of demand for items before pre-ordering or inventory arrival, it’s nearly impossible to understand demand or get ahead of the promises you make to customers.
On the flip side, having a reliable picture of demand for the item(s) before ordering or inventory arrival allows you to confidently say, “Yes, we can” more often, rather than, “Sorry, we couldn’t”.
What to do about it
Consider pre-ordering or pre-selling OMS features as a great strategy to:
- Generate buzz for new products
- Secure capital early if you are accepting a down payment
- Improve the results of a promotion
- Offer discounts to strengthen customer loyalty
A great example came out of our work with Feature, a Las Vegas-based sneaker and clothing boutique. They were able to mitigate overselling and chargebacks while increasing order accuracy by 125% using advanced order management capabilities.
With pre-ordering capabilities in OMS, you can configure inventory availability so that items without inventory on-hand can still be represented as available to sell. This lets you allocate and fulfill inventory for pre-orders more efficiently upon arrival at the warehouse.